In super free Estonia, you can start a new company in 20 minutes, online

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By John J. Metzler

UNITED NATIONS — When I first visited Estonia over twenty years ago, the Baltic country had recently regained its independence from the Soviet Union.

Tallinn, the capital and an old Hanseatic trading city, offered an intriguing mix of medieval architecture and shoddy Soviet style construction. Situated on the Gulf of Finland, Estonia, though occupied by Moscow, was deceptively close to the free Nordic countries.

Since regaining its freedom in 1991, Estonia has pursued a fast track to democratic and now digital development. The building blocks involved a revival of the country’s multi-party traditions and an embrace of free markets.

For example, the Washington based think tank Heritage Foundation places Estonia’s economic freedom as #9 globally, just behind Ireland, and ahead of the USA and United Kingdom.

Equally Estonia boasts the freest press/media of any of the former Soviet states.

Estonian Prime Minister Taavi Roivas at the 2014 European Rally Championship. / Alexandre Guillaumot / DPPI
Estonian Prime Minister Taavi Roivas at the 2014 European Rally Championship.
/ Alexandre Guillaumot / DPPI

But while my memories of Estonia are rooted in the country’s rich but turbulent history, I was jolted into the contemporary era by presentations on the country’s leading edge role in the digital age and how this tiny land is harnessing information technology for improved E governance.

Estonia’s dynamic Prime Minister Taavi Roivas, 36, visited the UN to present his nation’s success story to the Economic and Social Council. He underscored Estonia’s role as an example of innovation, digital technology and how public-private partnerships could boost development. Minister Roivas explained how the economy which was in transition just sixteen years ago, “was now one of the most digitally advanced countries.”

Prime Minister Roivas asserted that building an advanced digital government and being the birthplace of Skype had “given Estonia an active start-up scene.” He stressed that digitation had made both the public and private sectors efficient. There’s a strong commitment to economic freedom.

Later during a presentation to the International Peace Institute, Roivas said that the digital government initiatives “provide citizens with a precious resource: time.” Indeed with less bureaucracy and smart and innovative initiatives, the government has streamlined many procedures such as online voting and paying taxes.

“Starting a new company in Estonia is done online too and takes about twenty minutes; it’s all digital and no paperwork,” Roivas advised, adding and then “you have a firm up and running with total European Union access.” Top personal and corporate taxes have been reduced to 20 percent.

As the Prime Minister added, “This is not just tech savvy, and not just cool, but transparent.” A digital policy with ID cards carrying medical and personal information have streamlined services according to officials.

Estonia is one of the world’s least corrupt countries according to Transparency International. The digital presence as not just efficient but transparent. As the Prime Minister jokes, “you can’t bribe a computer.”

Yet vulnerability to cyber warfare, especially from active networks in neighboring Russia, pose a threat as in 2007 when Estonia was hit by a full scale cyber attack. Roivas asserts the importance of cyber defense and adds a digital government is not an end in itself. “In fact the Citizens are Big Brother over the Government.”

Estonia is a member of the Digital Five, a select group of five countries including Israel, New Zealand, South Korea, and the United Kingdom; places with high use of E government.

Illegally annexed by the Soviets in 1940, and ruled as a “Socialist Republic” until 1991, Estonia still hosts a large Russian ethnic population; in the capital Tallinn the population is 38 percent Russian.

Prime Minister Roivas concedes that while there has been “a worrying pattern” of Russia violating sovereignty of Georgia and Ukraine, Estonia’s NATO membership is a valuable safeguard to its sovereignty. Equally Estonia is one of a handful of NATO states which spends 2 percent of GDP on defense the others being the USA, UK, Greece and Poland.

Yet this little Baltic nation, about the size of New Hampshire and Vermont combined, has only 1.3 million people and is geographically on westernmost shoulder of Russia. Its big neighbor gives it the most concern and that is exactly why Estonia is a member of NATO and the EU.

“National security is fundamental for any state,” and indirectly referencing Russia he added, “We should not forget countries in Europe changing state borders by force.”

Roivas asserted warily, “Crises do not come and go, but come and stay.”

John J. Metzler is a United Nations correspondent covering diplomatic and defense issues. He is the author of Divided Dynamism the Diplomacy of Separated Nations: Germany, Korea, China (2014). [See pre-2011 Archives]

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