Address by the Foreign Minister of the Republic of Estonia Kristiina Ojuland to the Egyptian Council of Foreign Affairs
Cairo, Egypt 25 January 2005
Ladies and Gentlemen,
There are many reasons for me to be here today. For one thing, I wanted to get to know a country that is, in many ways, the heart and mind of the Arab world — as well as the political centre of Arab cooperation. Egypt plays a crucial geopolitical role. I have also come here to show that we, a European Union Member States in Northern Europe, acknowledge the vital significance of a strong EU-Egyptian partnership, despite the fact that our bilateral relations and foreign policy have so far been focused mainly upon countries closer to us.
Egypt is one of the most influential players in the Middle East, and is a prominent partner for the EU and Estonia in the region. Egypt has played a crucial role in the Arab-Israeli peace process. This is important for the EU, and it has been one of the main subjects of the discussions that I have been having with my Egyptian colleague.
But Egypt’s role in the international arena goes far beyond than the solving of Middle Eastern issues. Egypt, for instance, plays an important role in helping to solve cultural conflicts and misunderstandings that have become common because of globalization, and the revolution that is taking place in the information and communication sphere. Also, Egypt has always played an outstanding role in the United Nations and its various organs, especially when dealing with matters concerning political, socio-economic world security, and peace-keeping issues. One of the reasons for my visit to Cairo was to discuss all these issues with the leaders of your country.
I’m also here today, among you, since I’m convinced that one of the best ways for creating a common future is to develop intercultural dialogue. I would like to use this opportunity to introduce Estonia.
Allow me to start, by taking a brief look back at my nation’s history. Estonia is a small country in Northern Europe with only 1.35 million people. The place called Estonia today has been the home of my compatriots for 8000 years. Despite its small size, Estonia has always been an important link in the Baltic Sea region. With its natural harbours and inter-connecting waterways, Estonia was a major transport corridor connecting Northern Europe with the Mediterranean Sea region. Therefore, as long as a thousand years ago, both the Scandinavian Vikings and the people on the eastern shores of the Baltic Sea had trade relations with regions as far away as Byzantium and the Arab world.
Hundred of Arabic coins have been found during archeological excavations in Estonia which gives evidence of that trade relations existed already at that time. During the Middle Ages, the Hanseatic League – consisting of 70 Baltic Sea cities, including the Estonian capital of Tallinn, then Reval - formed the most dynamic trading bloc in the world.
After the demise of the Livonian Confederacy, established by the crusading knights of the Livonian Order in the 13th century, Estonia was an autonomous part of, first, the Swedish Kingdom, and, later, the Russian Empire. Our oldest institution of higher learning, Tartu University, the academic home of many renowned Egyptologists like Otto Friedrich von Richter, was established, by King Gustav Adolph of Sweden, already in 1632.
Although Estonia was occupied first occupied by Nazi Germany and as a result of WW II by the Soviet Union, the wish to return to Europe and be part of the Free World never died. The Soviet occupation, that lasted half a century finally ended in 1991, leaving us with the need to build up essential state institutions from scratch. The 50 years of being isolated behind the Iron Curtain also meant that it had been extremely difficult, if not outright impossible, to develop relations, or even contacts, with people and countries around the Mediterranean.
Estonia’s rapid development, since 1991, and its subsequent political and economic success have been based upon extensive political and economic reforms, a functioning parliamentary democracy and liberal economy, and free trade policies. Membership in both the European Union and the North Atlantic Treaty Organization were set as the main Estonian foreign policy goals immediately after the country regained its independence.
All Estonian administrations, after the regaining of independence, accepted, as did the majority of the people, the fact that accession to the EU and NATO needed to be our major foreign policy objectives. In November 1995, Estonia submitted its application to become a member of the EU and in 1997. After a national referendum approving EU accession we became members of the EU on 1 May 2004. A month earlier, Estonia had become a member of NATO.
The long-awaited membership in the EU and NATO has given our nation both a sense of achievement and a feeling of security. But EU and NATO accession also means that Estonia must bear considerably bigger responsibilities and commitments than before. The achieving of these priorities was not “the end of history” for Estonian foreign policy, but rather, a new beginning on a completely unaccustomed and much more demanding level.
Estonia totally shares the conviction of the majority of EU Member States, that the European Union’s international role needs to be increased. There exists a great deal of potential for this, considering that the collective opinion and actions of 25 states carry much more weight than the simple sum of the actions of individual states. Having grown in numbers, the EU now enjoys a greater responsibility in the world. The EU of 25 must tackle global issues such as the fight against terrorism, environmental protection, climate change, illegal immigration, and the violation of human rights.
It is clear, that the EU’s foreign policy coordination and leverage must be increased, especially when considering the new threats and challenges to international security. At the same time, I would like to stress, that the most essential guarantee of Europe’s security and stability is a strong transatlantic relationship. Therefore, Estonia regards as extremely essential the durability of the cooperative relationship between the European Union and the United States. For Estonia, one of the most important priorities in the EU’s Common Foreign and Security Policy is the matter of transatlantic relations. Strong transatlantic cooperation between Europe and the United States is of utmost importance not only for the security of Europe, but also for the creation of stability in the broader Middle East.
We, Estonians, see NATO as the only credible guarantee of collective security in Europe. Estonia continues to actively contribute to NATO operations in the Balkans and Afghanistan in accordance with its capabilities and available resources. Estonia welcomes the intensification of NATO’s cooperation with the states of the Mediterranean Dialogue and the Broader Middle East.
The EU of 25 also has a greater responsibility towards its neighbours. Estonia, as a EU border state, realizes, especially clearly, the need for creating and strengthening a zone of social and economic welfare as well as stability in the immediate vicinity of the Union’s external borders.
The South and East Mediterranean along with the Middle East is, of course, an area of vital strategic importance, and a key external relations priority for the EU. Due to Estonia’s geographical location, our attention, in the context of the European Neighbourhood Policy, or ENP, has been mainly concentrated upon cooperation with the Union’s eastern neighbours, including Ukraine, Moldova, and the South Caucasus countries. But in a globalising world all countries are neighbours and we attach increasing importance to the development of the EU’s relations with its southern neighbours, including Egypt. I had the opportunity to discuss this earlier today with my colleague and also with the Secretary General of the Arab League Amr Moussa.
The Barcelona Process, now enhanced by the ENP, has been the main tool for the EU’s partnership, cooperation, and dialogue with the Mediterranean region. The Barcelona Process has made a major contribution towards the process of modernisation and reform generated from within the societies concerned.
In this context, I believe that the renewed Euro-Mediterranean Association Agreement between the EU and Egypt, which came into force on 1 June 2004, creates new opportunities for deepening EU-Egyptian relations, as well as for developing bilateral economic cooperation between Estonia and Egypt. The 10th anniversary of the Barcelona Declaration will be a suitable opportunity for strengthening and re-launching the Euromed process. We are looking forward to the VII Euromed meeting, in May 2005, to review, together with our Mediterranean partners, various ways for further enhancing this process.
Estonia welcomes the fact, that the Anna Lindh Foundation for Dialogue between Cultures has been established as a true partnership between the North and the South. Estonia, right from the beginning, supported the idea of the Foundation's headquarters being located in a partner country. We are pleased, that, earlier this year, the decision was made in favour of Alexandria. I am glad, that my government has decided to support the Foundation financially.
The situation in the Middle East is one of the key questions concerning international security. Estonia sees its contribution to the Middle East peace process through the implementation of the EU’s CFSP. Naturally, an important precondition for lasting peace in the region, as well as for the stabilisation of Iraq, is the finding of a lasting solution for the conflict between Israel and Palestine. It is essential to follow the Roadmap and the goals established by it, which will ensure the creation of an independent Palestinian state next to a secure Israel. As the Roadmap points out, both Israelis and Palestinians must be encouraged to cooperate as closely as possible, especially when dealing with matters concerning security.
We believe, that the peace process, as outlined in the Roadmap, of a negotiated two-state solution resulting in the emergence of an independent, democratic, and viable Palestinian state, living side by side with Israel and its other neighbours, is the only way forward that ensures a lasting peace. We hope that all parties involved will seize this opportunity to accelerate the implementation of the Roadmap and re-launch a meaningful political process.
Estonia welcomes an Israeli withdrawal from the Gaza Strip and part of the northern West Bank as a first step in the overall process. However, all steps taken need to be coordinated and in accordance with the Roadmap. With the January 9 elections, on the Palestinian people have shown their commitment to democracy. The challenge, now, is for the new president to use his mandate to lay the foundation for a future Palestinian state that we would like to see emerging in the context of a mutually beneficial final settlement. We hope, that the new Palestinian leadership gives the peace process a fresh impetus. Peace can only be achieved through meaningful negotiations.
The objective of the EU and Estonian participation in international efforts to stabilize Iraq is to ensure the peaceful and democratic development of this tormented country. A more extensive UN presence in Iraq, just like the European Union’s greater participation, is essential for the success of this process. Estonia supports the ensuring of the UN mission’s security with half a million Estonian kroons. Also, Estonia supports the EU’s aid mission for building up Iraq’s judicial system and law enforcement structure. Our Defence Force personnel, as part of the coalition forces in Iraq, are continuing their highly responsible mission of ensuring security and achieving stability. We hope, that the forthcoming Iraqi elections will be a turning point. In March, Estonia will consider its further participation in the coalition forces there, after seeing the impact of the elections.
The stabilising of the situation in Afghanistan is as essential as before. A worthy contribution to this endeavour is being made by the Estonian Defence Force personnel serving in the NATO mission. The first democratic presidential elections in Afghanistan, on October 9, were greeted throughout the world. Let us hope, that the political processes in Afghanistan will continue in a positive direction, and that the parliamentary elections to be carried out in April, will also be successful.
Let me now turn to economic issues,
Membership in the EU has provided Estonia with new opportunities that the country has never had before. Since 1 May, the internal market of the Union has been, without exceptions, open to Estonian exports. There has been a considerable increase in the interest of foreign firms in the opportunities that our economy can offer and in our favorable investment climate. Accession to the European Union has increased individuals’ opportunities - tourism and student exchange have grown substantially. Membership in the EU gives goods produced in Estonia an access to a market of 480 million people. Membership in the World Trade Organization is giving additional boost to Estonia’s expanding foreign trade.
To be on par with our neighbours, Estonia has transformed itself into a highly motivated and dynamic centre of commerce. The business environment has blossomed, thanks mainly to the stability of the political situation and the sound economic policies of the government.
Being a forerunner in the implementation of economic reforms and in transforming itself into a market economy, Estonia has, during the last five years, had an average annual growth rate of about 5%. The country has received over EUR 5 billion of foreign direct investments, amounting to about 60% of the GDP. I sincerely believe that there are excellent opportunities for increasing bilateral trade and other economic links between our two countries. Already today a significant amount of Estonian timber and paper is exported to Egypt. This country has also become a favourite travelling destination for Estonian tourists. Last year, as many as 10,000 Estonians visited your beautiful country.
According to the World Economic Forum Global Competitiveness Report, in 2003, Estonia ranked 22nd, ahead of most EU Member States. In the 2005 Heritage Foundation /Wall Street Journal Index of Economic Freedom, Estonia ranks fourth, after Hong Kong, Singapore, and Luxembourg, whereas the United States was 12th. As a result, Estonia could, according to some forecasts, attract up to EUR 1 billion of foreign direct investments in 2005. Estonian achievements have been based upon the comprehension of the fact, that quick and stable economic development cannot be achieved with the help of direct state investments in education, technological development, and innovation alone. A strong boost is also needed from the broader institutional environment -- a stimulating tax regime, attractive conditions for the influx of knowledge-intensive foreign investments, and the availability of a qualified labour force.
A similar understanding forms the basis for the European Union’s Lisbon strategy, which has the objective of making the EU into the world’s most knowledge-based and competitive economic region. The creation of greater employment opportunities, increased investment in human resources, and life-long learning are crucial for carrying out such a development process. To secure economic growth, as well as increase Europe’s competitiveness, research and development along with scientific innovations should be prioritised even more. Increased attention has to be paid to the development of information and communication, as well the so-called frontier technologies, biotechnology in particular. In this respect, Estonia is among the successful new EU members, especially concerning the development of information and communication technologies, or ICT. According to the World Economic Forum’s The Global Information Technology Report 2003-2004, for example, Estonia ranks 13th in the use of ICT by the Government, and third in the political and regulatory environment sub-index. In this respect, Estonia has been in the forefront among the new European Union members.
In a short period of time, Estonia has made remarkable achievements in several areas of information and communication technology. We have managed to create a favourable environment for development in this field, and have facilitated close cooperation between the public sector, the business community, and civil society associations in order to create the necessary infrastructure. As an outcome of our efforts, several information society services are now also accessible for Estonian residents of limited financial resources.
According to an assessment by The Economist, in 2004, Estonia was the 26th in the world when it comes to information technology, and holds a leading position among Central and Eastern European countries.
More than half of the Estonian population uses internet services regularly, 38% owns computers and 90% owns mobile phones.. Estonians can communicate both with government and local administrations through the Internet, and use legally binding digital signatures.
I believe, that as a former transition country, Estonia has acquired experiences, which could be very useful for developing countries in the development of their own information and communication technology. Estonia’s potential development aid first of al includes knowledge based counselling. We have already taken some steps in that direction. During the summer of 2002, the Government of Estonia, in cooperation with the United Nations Development Program and the Information Program of the Open Society Institute established the e-Governance Academy in Estonia. The main purpose of this very specific Academy is to improve ICT cooperation between the public and private sectors. The target countries of this joint project have primarily been Central and Eastern European countries, countries of the CIS, and Asian countries. But future plans already involve African countries. The e-Governance Academy has successfully carried out training courses for officials from Kyrgyzstan, Sri Lanka, Albania, Kazakhstan, and other countries.
Let me now say few words about regional cooperation.
The Baltic Sea region and the Mediterranean region share many similarities. Both unite peoples of different cultural traditions and of various welfare levels. Very specifically, Estonia offers foreign companies an ideal entry into the large and fast-growing markets of the Baltic Sea region. An open economy, excellent transportation links, and a central location make Estonia an ideal base for production and distribution, with all the region’s main markets within easy reach.
The modern Baltic Sea region consists of ten countries with a combined population of 90 million people and is considered one of most stable regions in the world. We hope that this might serve as an example for other regions. The region is unique because of the mix of different countries bordering the Baltic Sea - the developed economies of Germany and Scandinavia, and the expanding economies of the Baltic states, Poland, and North-West Russia. All the countries of the region belong to the Council of Baltic Sea States, which promotes regional cooperation.
Differences in cost levels between the Scandinavian countries and the emerging markets of the Baltic states and Poland offer companies an ideal opportunity to combine the advantages of the different parts of the region. The GDP of the Baltic Sea region represents a sizeable market, measuring around 1,160 billion U.S. dollars in 2001.
The countries of the Baltic Sea region have, during the past decade, undergone profound changes. These have not only transformed their economies, but also the mentality of individuals and whole nations. The rather unstable economic conditions characteristic of our countries have been replaced by a relatively stable and predictable economic and social climate. The maturity of our democratic institutions was testified to by the accession of Estonia, Latvia, Lithuania, and Poland to the EU. Now, all the countries around the Baltic Sea, except Russia, are EU members. With Russia, the EU is currently negotiating the establishment of a partnership relationship within the framework of so-called four spaces, which cover all the main fields of mutual cooperation.
Alongside democratic institutions and their consolidation over the years, there are, of course, also other significant factors upon which the generally positive trend of development in the Baltic Sea region rests. Among these, cooperation, which is based upon shared interests and is built up around democratic structures, is the foremost. In the early nineties, cooperation was the euphemistic term often used to define foreign aid. But over the years, cooperation spread to all spheres of common interest – in addition to matters dealing with the economy, cooperation in connection with the environment, education, health, the fight against crime and drug trafficking, etc, has grown in importance and scope. I do believe, that the positive experience of the Baltic Sea region will also help us, in the future, to develop mutually beneficial cooperation between the European Union and our Mediterranean partners.
With these positive reflections I would like to conclude my presentation, and I am now ready to answer your questions.
Ladies and Gentlemen,
There are many reasons for me to be here today. For one thing, I wanted to get to know a country that is, in many ways, the heart and mind of the Arab world — as well as the political centre of Arab cooperation. Egypt plays a crucial geopolitical role. I have also come here to show that we, a European Union Member States in Northern Europe, acknowledge the vital significance of a strong EU-Egyptian partnership, despite the fact that our bilateral relations and foreign policy have so far been focused mainly upon countries closer to us.
Egypt is one of the most influential players in the Middle East, and is a prominent partner for the EU and Estonia in the region. Egypt has played a crucial role in the Arab-Israeli peace process. This is important for the EU, and it has been one of the main subjects of the discussions that I have been having with my Egyptian colleague.
But Egypt’s role in the international arena goes far beyond than the solving of Middle Eastern issues. Egypt, for instance, plays an important role in helping to solve cultural conflicts and misunderstandings that have become common because of globalization, and the revolution that is taking place in the information and communication sphere. Also, Egypt has always played an outstanding role in the United Nations and its various organs, especially when dealing with matters concerning political, socio-economic world security, and peace-keeping issues. One of the reasons for my visit to Cairo was to discuss all these issues with the leaders of your country.
I’m also here today, among you, since I’m convinced that one of the best ways for creating a common future is to develop intercultural dialogue. I would like to use this opportunity to introduce Estonia.
Allow me to start, by taking a brief look back at my nation’s history. Estonia is a small country in Northern Europe with only 1.35 million people. The place called Estonia today has been the home of my compatriots for 8000 years. Despite its small size, Estonia has always been an important link in the Baltic Sea region. With its natural harbours and inter-connecting waterways, Estonia was a major transport corridor connecting Northern Europe with the Mediterranean Sea region. Therefore, as long as a thousand years ago, both the Scandinavian Vikings and the people on the eastern shores of the Baltic Sea had trade relations with regions as far away as Byzantium and the Arab world.
Hundred of Arabic coins have been found during archeological excavations in Estonia which gives evidence of that trade relations existed already at that time. During the Middle Ages, the Hanseatic League – consisting of 70 Baltic Sea cities, including the Estonian capital of Tallinn, then Reval - formed the most dynamic trading bloc in the world.
After the demise of the Livonian Confederacy, established by the crusading knights of the Livonian Order in the 13th century, Estonia was an autonomous part of, first, the Swedish Kingdom, and, later, the Russian Empire. Our oldest institution of higher learning, Tartu University, the academic home of many renowned Egyptologists like Otto Friedrich von Richter, was established, by King Gustav Adolph of Sweden, already in 1632.
Although Estonia was occupied first occupied by Nazi Germany and as a result of WW II by the Soviet Union, the wish to return to Europe and be part of the Free World never died. The Soviet occupation, that lasted half a century finally ended in 1991, leaving us with the need to build up essential state institutions from scratch. The 50 years of being isolated behind the Iron Curtain also meant that it had been extremely difficult, if not outright impossible, to develop relations, or even contacts, with people and countries around the Mediterranean.
Estonia’s rapid development, since 1991, and its subsequent political and economic success have been based upon extensive political and economic reforms, a functioning parliamentary democracy and liberal economy, and free trade policies. Membership in both the European Union and the North Atlantic Treaty Organization were set as the main Estonian foreign policy goals immediately after the country regained its independence.
All Estonian administrations, after the regaining of independence, accepted, as did the majority of the people, the fact that accession to the EU and NATO needed to be our major foreign policy objectives. In November 1995, Estonia submitted its application to become a member of the EU and in 1997. After a national referendum approving EU accession we became members of the EU on 1 May 2004. A month earlier, Estonia had become a member of NATO.
The long-awaited membership in the EU and NATO has given our nation both a sense of achievement and a feeling of security. But EU and NATO accession also means that Estonia must bear considerably bigger responsibilities and commitments than before. The achieving of these priorities was not “the end of history” for Estonian foreign policy, but rather, a new beginning on a completely unaccustomed and much more demanding level.
Estonia totally shares the conviction of the majority of EU Member States, that the European Union’s international role needs to be increased. There exists a great deal of potential for this, considering that the collective opinion and actions of 25 states carry much more weight than the simple sum of the actions of individual states. Having grown in numbers, the EU now enjoys a greater responsibility in the world. The EU of 25 must tackle global issues such as the fight against terrorism, environmental protection, climate change, illegal immigration, and the violation of human rights.
It is clear, that the EU’s foreign policy coordination and leverage must be increased, especially when considering the new threats and challenges to international security. At the same time, I would like to stress, that the most essential guarantee of Europe’s security and stability is a strong transatlantic relationship. Therefore, Estonia regards as extremely essential the durability of the cooperative relationship between the European Union and the United States. For Estonia, one of the most important priorities in the EU’s Common Foreign and Security Policy is the matter of transatlantic relations. Strong transatlantic cooperation between Europe and the United States is of utmost importance not only for the security of Europe, but also for the creation of stability in the broader Middle East.
We, Estonians, see NATO as the only credible guarantee of collective security in Europe. Estonia continues to actively contribute to NATO operations in the Balkans and Afghanistan in accordance with its capabilities and available resources. Estonia welcomes the intensification of NATO’s cooperation with the states of the Mediterranean Dialogue and the Broader Middle East.
The EU of 25 also has a greater responsibility towards its neighbours. Estonia, as a EU border state, realizes, especially clearly, the need for creating and strengthening a zone of social and economic welfare as well as stability in the immediate vicinity of the Union’s external borders.
The South and East Mediterranean along with the Middle East is, of course, an area of vital strategic importance, and a key external relations priority for the EU. Due to Estonia’s geographical location, our attention, in the context of the European Neighbourhood Policy, or ENP, has been mainly concentrated upon cooperation with the Union’s eastern neighbours, including Ukraine, Moldova, and the South Caucasus countries. But in a globalising world all countries are neighbours and we attach increasing importance to the development of the EU’s relations with its southern neighbours, including Egypt. I had the opportunity to discuss this earlier today with my colleague and also with the Secretary General of the Arab League Amr Moussa.
The Barcelona Process, now enhanced by the ENP, has been the main tool for the EU’s partnership, cooperation, and dialogue with the Mediterranean region. The Barcelona Process has made a major contribution towards the process of modernisation and reform generated from within the societies concerned.
In this context, I believe that the renewed Euro-Mediterranean Association Agreement between the EU and Egypt, which came into force on 1 June 2004, creates new opportunities for deepening EU-Egyptian relations, as well as for developing bilateral economic cooperation between Estonia and Egypt. The 10th anniversary of the Barcelona Declaration will be a suitable opportunity for strengthening and re-launching the Euromed process. We are looking forward to the VII Euromed meeting, in May 2005, to review, together with our Mediterranean partners, various ways for further enhancing this process.
Estonia welcomes the fact, that the Anna Lindh Foundation for Dialogue between Cultures has been established as a true partnership between the North and the South. Estonia, right from the beginning, supported the idea of the Foundation's headquarters being located in a partner country. We are pleased, that, earlier this year, the decision was made in favour of Alexandria. I am glad, that my government has decided to support the Foundation financially.
The situation in the Middle East is one of the key questions concerning international security. Estonia sees its contribution to the Middle East peace process through the implementation of the EU’s CFSP. Naturally, an important precondition for lasting peace in the region, as well as for the stabilisation of Iraq, is the finding of a lasting solution for the conflict between Israel and Palestine. It is essential to follow the Roadmap and the goals established by it, which will ensure the creation of an independent Palestinian state next to a secure Israel. As the Roadmap points out, both Israelis and Palestinians must be encouraged to cooperate as closely as possible, especially when dealing with matters concerning security.
We believe, that the peace process, as outlined in the Roadmap, of a negotiated two-state solution resulting in the emergence of an independent, democratic, and viable Palestinian state, living side by side with Israel and its other neighbours, is the only way forward that ensures a lasting peace. We hope that all parties involved will seize this opportunity to accelerate the implementation of the Roadmap and re-launch a meaningful political process.
Estonia welcomes an Israeli withdrawal from the Gaza Strip and part of the northern West Bank as a first step in the overall process. However, all steps taken need to be coordinated and in accordance with the Roadmap. With the January 9 elections, on the Palestinian people have shown their commitment to democracy. The challenge, now, is for the new president to use his mandate to lay the foundation for a future Palestinian state that we would like to see emerging in the context of a mutually beneficial final settlement. We hope, that the new Palestinian leadership gives the peace process a fresh impetus. Peace can only be achieved through meaningful negotiations.
The objective of the EU and Estonian participation in international efforts to stabilize Iraq is to ensure the peaceful and democratic development of this tormented country. A more extensive UN presence in Iraq, just like the European Union’s greater participation, is essential for the success of this process. Estonia supports the ensuring of the UN mission’s security with half a million Estonian kroons. Also, Estonia supports the EU’s aid mission for building up Iraq’s judicial system and law enforcement structure. Our Defence Force personnel, as part of the coalition forces in Iraq, are continuing their highly responsible mission of ensuring security and achieving stability. We hope, that the forthcoming Iraqi elections will be a turning point. In March, Estonia will consider its further participation in the coalition forces there, after seeing the impact of the elections.
The stabilising of the situation in Afghanistan is as essential as before. A worthy contribution to this endeavour is being made by the Estonian Defence Force personnel serving in the NATO mission. The first democratic presidential elections in Afghanistan, on October 9, were greeted throughout the world. Let us hope, that the political processes in Afghanistan will continue in a positive direction, and that the parliamentary elections to be carried out in April, will also be successful.
Let me now turn to economic issues,
Membership in the EU has provided Estonia with new opportunities that the country has never had before. Since 1 May, the internal market of the Union has been, without exceptions, open to Estonian exports. There has been a considerable increase in the interest of foreign firms in the opportunities that our economy can offer and in our favorable investment climate. Accession to the European Union has increased individuals’ opportunities - tourism and student exchange have grown substantially. Membership in the EU gives goods produced in Estonia an access to a market of 480 million people. Membership in the World Trade Organization is giving additional boost to Estonia’s expanding foreign trade.
To be on par with our neighbours, Estonia has transformed itself into a highly motivated and dynamic centre of commerce. The business environment has blossomed, thanks mainly to the stability of the political situation and the sound economic policies of the government.
Being a forerunner in the implementation of economic reforms and in transforming itself into a market economy, Estonia has, during the last five years, had an average annual growth rate of about 5%. The country has received over EUR 5 billion of foreign direct investments, amounting to about 60% of the GDP. I sincerely believe that there are excellent opportunities for increasing bilateral trade and other economic links between our two countries. Already today a significant amount of Estonian timber and paper is exported to Egypt. This country has also become a favourite travelling destination for Estonian tourists. Last year, as many as 10,000 Estonians visited your beautiful country.
According to the World Economic Forum Global Competitiveness Report, in 2003, Estonia ranked 22nd, ahead of most EU Member States. In the 2005 Heritage Foundation /Wall Street Journal Index of Economic Freedom, Estonia ranks fourth, after Hong Kong, Singapore, and Luxembourg, whereas the United States was 12th. As a result, Estonia could, according to some forecasts, attract up to EUR 1 billion of foreign direct investments in 2005. Estonian achievements have been based upon the comprehension of the fact, that quick and stable economic development cannot be achieved with the help of direct state investments in education, technological development, and innovation alone. A strong boost is also needed from the broader institutional environment -- a stimulating tax regime, attractive conditions for the influx of knowledge-intensive foreign investments, and the availability of a qualified labour force.
A similar understanding forms the basis for the European Union’s Lisbon strategy, which has the objective of making the EU into the world’s most knowledge-based and competitive economic region. The creation of greater employment opportunities, increased investment in human resources, and life-long learning are crucial for carrying out such a development process. To secure economic growth, as well as increase Europe’s competitiveness, research and development along with scientific innovations should be prioritised even more. Increased attention has to be paid to the development of information and communication, as well the so-called frontier technologies, biotechnology in particular. In this respect, Estonia is among the successful new EU members, especially concerning the development of information and communication technologies, or ICT. According to the World Economic Forum’s The Global Information Technology Report 2003-2004, for example, Estonia ranks 13th in the use of ICT by the Government, and third in the political and regulatory environment sub-index. In this respect, Estonia has been in the forefront among the new European Union members.
In a short period of time, Estonia has made remarkable achievements in several areas of information and communication technology. We have managed to create a favourable environment for development in this field, and have facilitated close cooperation between the public sector, the business community, and civil society associations in order to create the necessary infrastructure. As an outcome of our efforts, several information society services are now also accessible for Estonian residents of limited financial resources.
According to an assessment by The Economist, in 2004, Estonia was the 26th in the world when it comes to information technology, and holds a leading position among Central and Eastern European countries.
More than half of the Estonian population uses internet services regularly, 38% owns computers and 90% owns mobile phones.. Estonians can communicate both with government and local administrations through the Internet, and use legally binding digital signatures.
I believe, that as a former transition country, Estonia has acquired experiences, which could be very useful for developing countries in the development of their own information and communication technology. Estonia’s potential development aid first of al includes knowledge based counselling. We have already taken some steps in that direction. During the summer of 2002, the Government of Estonia, in cooperation with the United Nations Development Program and the Information Program of the Open Society Institute established the e-Governance Academy in Estonia. The main purpose of this very specific Academy is to improve ICT cooperation between the public and private sectors. The target countries of this joint project have primarily been Central and Eastern European countries, countries of the CIS, and Asian countries. But future plans already involve African countries. The e-Governance Academy has successfully carried out training courses for officials from Kyrgyzstan, Sri Lanka, Albania, Kazakhstan, and other countries.
Let me now say few words about regional cooperation.
The Baltic Sea region and the Mediterranean region share many similarities. Both unite peoples of different cultural traditions and of various welfare levels. Very specifically, Estonia offers foreign companies an ideal entry into the large and fast-growing markets of the Baltic Sea region. An open economy, excellent transportation links, and a central location make Estonia an ideal base for production and distribution, with all the region’s main markets within easy reach.
The modern Baltic Sea region consists of ten countries with a combined population of 90 million people and is considered one of most stable regions in the world. We hope that this might serve as an example for other regions. The region is unique because of the mix of different countries bordering the Baltic Sea - the developed economies of Germany and Scandinavia, and the expanding economies of the Baltic states, Poland, and North-West Russia. All the countries of the region belong to the Council of Baltic Sea States, which promotes regional cooperation.
Differences in cost levels between the Scandinavian countries and the emerging markets of the Baltic states and Poland offer companies an ideal opportunity to combine the advantages of the different parts of the region. The GDP of the Baltic Sea region represents a sizeable market, measuring around 1,160 billion U.S. dollars in 2001.
The countries of the Baltic Sea region have, during the past decade, undergone profound changes. These have not only transformed their economies, but also the mentality of individuals and whole nations. The rather unstable economic conditions characteristic of our countries have been replaced by a relatively stable and predictable economic and social climate. The maturity of our democratic institutions was testified to by the accession of Estonia, Latvia, Lithuania, and Poland to the EU. Now, all the countries around the Baltic Sea, except Russia, are EU members. With Russia, the EU is currently negotiating the establishment of a partnership relationship within the framework of so-called four spaces, which cover all the main fields of mutual cooperation.
Alongside democratic institutions and their consolidation over the years, there are, of course, also other significant factors upon which the generally positive trend of development in the Baltic Sea region rests. Among these, cooperation, which is based upon shared interests and is built up around democratic structures, is the foremost. In the early nineties, cooperation was the euphemistic term often used to define foreign aid. But over the years, cooperation spread to all spheres of common interest – in addition to matters dealing with the economy, cooperation in connection with the environment, education, health, the fight against crime and drug trafficking, etc, has grown in importance and scope. I do believe, that the positive experience of the Baltic Sea region will also help us, in the future, to develop mutually beneficial cooperation between the European Union and our Mediterranean partners.
With these positive reflections I would like to conclude my presentation, and I am now ready to answer your questions.
© Estonian Foreign Ministry
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