Estonia stalls in top-lists

Mikk Salu
, reporter
Copy
Please note that the article is more than five years old and belongs to our archive. We do not update the content of the archives, so it may be necessary to consult newer sources.
Photo: Panther Media / Scanpix

Let’s compare Estonia’s business growth strategy for 2014–2020 to that of 2007–2013, let’s compare the goals set, back then, to current reality.

What immediately strikes the eye is that, in some international top-lists, we have backslidden. In the Wold Bank compiled Doing Business list, for instance, Estonia stood 16th in 2006 and sets it as her goal to reach the top 15. In reality, we have dropped to be 21st.

As admitted by economy minister Juhan Parts, he is greatly disturbed by the drop. «Once the results came in, I took an afternoon off, dug deep into it, checked their data, the methodology,» says Mr Parts. According to him, there are three aspects to the drop.

Firstly, in some issues the Wold Bank has simply erred. For instance, while measuring speed and ease of establishing a company, they conclude in Estonia it takes six days. This is just plain wrong. In reality, a company can be established in twenty-some minutes; capital requirements no longer exist; what’s more: signing digitally, one may establish a company while in Estonia, Falkland Islands or Australia.

Secondly – and here Mr Parts agrees with Wold Bank criticism – Estonia is being dragged down the list by all kinds of issues related to licences (building permits, planning permits). For a small states, getting all the permits takes far too long.

Thirdly, World Bank takes into account requirements which, for Estonia, are unavoidably hard to comply with. Such as access to capital. Nothing doing: we’re a small country, we have a small number of banks, fewer funds, fewer venture capitalists.

To sum it all up, Mr Parts admits that many things could still be done and, anyway (if only to market Estonia, internationally) we will have to climb higher in the Doing Business list.

Another thing: one will notice that the business growth strategy does not directly deal with problems of business environment – what to change, what to improve. Thus, the document does not touch upon tax issues, regulation, red tape and legal environment. These are not the goal of this document.

Still, Mr Parts says that, broadly speaking, Estonia has a good tax environment and the direction is towards stability. This may be taken as a promise that no big changes are in the pipeline; rather, Reform Party and IRL are trying to prevent major foolishness.

In details, differing solutions may surely appear. For example: a lot has been said about setting a social tax ceiling. Even so, no money has been found to that end. Therefore, Mr Parts says that in addition to social taxes we might also discuss (as has indeed happened, with future discussions planned), whether something should be changed with taxation of options. This is an example of tax finesses possibly undergoing change.

Comments
Copy
Top