Estonia

B

Language

Estonian is the official language, from the Finno-Ugric language family. It is spoken by the majority of the population. Russian is spoken by almost half of all Estonians, and other languages such as Ukrainian, Finnish, Belorussian, and Latvian are heard.

IV

Economy

In 2004 Estonia’s gross national product (GNP) was US$9,548 million, equivalent to US$11,400 per head (World Bank estimate). Industry is the leading sector of Estonia’s economy. It accounted for 29 per cent of total gross domestic production (GDP) and about 34 per cent of total employment. Engineering and metalworking are the chief industries, followed in importance by the mining of shale. The shale-processing industry produces artificial gas and chemicals. Other manufactures include cement, textiles (cotton, linen, and wool), car components, and leather goods. Forestry provides material for the paper, timber, plywood, and furniture industries.

A

Agriculture

Agriculture and forestry together account for 3 per cent of total GDP and about 5 per cent of total employment. Livestock-raising and dairy farming are the chief agricultural activities. Oats, potatoes, and flax are the leading crops.

B

Manufacturing

Industrial output is highly dependent on a small number of large-scale enterprises, most of which are located in the north. One fifth of all factories account for two thirds of total industrial production. Disruption of trade ties with the former Soviet republics resulted in a 30 per cent decline in industrial production in 1992. Smuggling and reselling underpriced raw materials from Russia has become widespread.

C

Energy

In the early 1990s Estonian economic independence was challenged by energy price demands from Russia. Estonia relies on Russia to fill about half of its energy needs, a smaller proportion than either of the two other Baltic states, Latvia and Lithuania. Nevertheless, the Estonian economy suffered greatly from Russian demands that fossil-fuel shipments be paid for at world prices, and several large factories in Estonia were forced to close. Estonia followed Russia’s example and required hard-currency payment on electricity deliveries to Latvia and Lithuania beginning in 1992.