Economic Outlook of Estonia - Essay Sample

Introduction

Macroeconomic variables control the macro economy of Estonia. The economic thriving of South Korea, China, and India, that was considered to be a Third world country 15-20 years ago, are now thriving in the international economy. The enhanced macroeconomic variables have driven the economy of Estonia. Even though there is a huge discrepancy in wealth between developing and developed nation, remarkable progress is made to balance the economic disparity. The essay will assess the business practices and economic outlook of Estonia.

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Background

Estonia is situated in Northern Europe on the eastern side of the Baltic Sea, thereby lying on the northern section of the temperate region between the continental and maritime climate. The nation attained its independence on 24th February 1918 from its colonial masters, the Soviet Union (Rimfeld et al., 2018). Tallinn is the capital city of Estonia. Kersti Kaljulaid is the present political leader of Estonia (Joe, 2018). He is the fifth president in the history of Estonian politics.

The current political landscape and civic environment have been impacted by the brevity of the democratic culture of the pre-independence, the absence of initiative, and the reduction of exterior cooperation that is inherited from the earlier totalitarianism. The Reform Party is the predominant advocate of the liberal ideology in the country. Hence, the party has been instrumental in embracing this ideology. The Reform Party stress on a liberal environment that is abundant in opportunities, whereby both new and enhanced concepts to advance lives might be reborn (Sikk, 2015). The economic policy is grounded on simple liberal ideas such as personal freedom of choice, the safeguarding of ambitious individuals and proprietors, low taxes and tolerance. The population of Estonia is growing at a steady rate. The present population of Estonia is 1,204, 992 (World Meters, n.d). The population per capita of Estonia is 7583.4. Regarding population size, Estonia is ranked 157th globally (World Meters, n.d). The public offer cheap labor, thereby enhancing the economy.

Business Practices

The business practices in Estonia have eased the way of doing business. Estonian is the national language of Estonia. The nation enjoys an adult literacy rate of 99.89% (Knoema Corporation, 2017). the high literacy level implies that the citizens are educated and can read and write business documents thereby facilitating business transactions. The citizens speak in the Estonian language to conduct business. The normal working week is forty hours with an eight-hour day. However, part-time work relies on the agreed duration. The business hours begin on Monday and end on Friday (Business Culture, n.d.). It is mandatory that the employees should woek from 9.00 am to 6.00pm. Notably, an hour is set aside for the employee to have lunch. The present time zone in Estonia is Eastern European Summer Time. The Estonian currency, Euro (EUR), is exchanged at 1.14 against the American Dollar ($) (Exchange Rates, n.d)

Economic Situation

Estonia enjoys a stable economy since 2009. The nation has an economic freedom score of 76.6 which positions it as the 15th globally. The overall score has decreased by 2.2 points with a substantial reduction in of monetary freedom, the effectiveness of the judiciary, and financial freedom overwhelming a small increase in legal freedom. The country is positioned number 7th in the European area. The overall score of Estonia is above both the regional and world standards. The Gross Domestic Product (GDP) per capita of Estonia was EUR19,973. The growth rate of the GDP is 4.9% (Malkin et al., 2019). The net value of exports and imports is EUR12.8 billion and EUR14.7 billion respectively. In this regard, the balance of deficit that the nation faces is EUR1.9 billion (Malkin et al., 2019). The key trading partners of the nation are Sweden, Finland, Latvia, and Russia.

Conclusion

Evidently, Estonia has a good economy based on the macroeconomic and microeconomic indicators. It is important that the government embrace a political ideology that makes the business environment conducive for the investors. A proper business environment will lure more investors thereby attracting foreign direct investment. Further, the government should improve business practices across the nation.

References

Business Culture. (n.d.). Business etiquette. Retrieved from https://businessculture.org/eastern-europe/estonia/business-etiquette/Exchange Rates. (n.d.). Euro to Dollar Exchange Rate Today, Live 1 EUR to USD = 1.1351 (Convert Euros to Dollars). Retrieved from https://www.exchangerates.org.uk/Euros-to-Dollars-currency-conversion-page.html

Joe, D. H. (2018). Strengthening the Korea-Baltic States Economic Relationship. Retrieved from https://think-asia.org/bitstream/handle/11540/8131/KIEPopinions_no129.pdf?sequence=1

Knoema Corporation. (2017, June 14). Estonia Adult literacy rate, 1970-2018 - knoema.com. Retrieved from https://knoema.com/atlas/Estonia/topics/Education/Literacy/Adult-literacy-rate

Malkin, S. J., Russel-Szymczyk, M., Liidemann, G., Volke, V., & Hunt, B. (2019). Once-Weekly Semaglutide Versus Once-Daily Liraglutide for the Treatment of Type 2 Diabetes: A Long-Term Cost-Effectiveness Analysis in Estonia. Diabetes Therapy, 1-18. Retrieved from https://link.springer.com/content/pdf/10.1007%2Fs13300-018-0542-x.pdf

Rimfeld, K., Krapohl, E., Trzaskowski, M., Coleman, J. R., Selzam, S., Dale, P. S., ... & Plomin, R. (2018). Genetic influence on social outcomes during and after the Soviet era in Estonia. Nature human behaviour, 1. Retrieved from https://www.researchgate.net/profile/Philip_Dale/publication/324415189_Genetic_influence_on_social_outcomes_during_and_after_the_Soviet_era_in_Estonia/links/5ad4bb4ea6fdcc2935808cc3/Genetic-influence-on-social-outcomes-during-and-after-the-Soviet-era-in-Estonia.pdf

Sikk, A. (2015). Estonia. European Journal of Political Research Political Data Yearbook, 54(1), 94-100. Retrieved from https://onlinelibrary.wiley.com/doi/pdf/10.1111/2047-8852.12084

World Meters. (n.d.). Estonia Population (2019) - Worldometers. Retrieved from http://www.worldometers.info/world-population/estonia-population/