Estonia country brief

Introduction

Estonia is the smallest and least populous of the three Baltic Republics, covering an area of 45,227 square kilometres with 1.3 million inhabitants (2016). Situated on the north-eastern edge of the Baltic Sea, Estonia borders Latvia to the south and the Russian Federation to the east. The capital of Estonia is Tallinn. Estonia celebrates its National Day on 24 February.

Political overview

System of Government

The Fourth Constitution of the Republic of Estonia, adopted on 28 June 1992, established a democratic system based on a Presidency and a unicameral 101-seat parliament, known as the Riigikogu.

Political Developments

The President of Estonia, Ms Kersti Kaljulaid, was elected on 3 October 2016 for a five-year term. She is Estonia's first female president, replacing Toomas Hendrik Ilves who completed his maximum two terms in August 2016. In the Estonian system, the President is elected indirectly (i.e. by Parliament) and has mainly ceremonial powers. Prior to her election, President Kaljulaid served as Estonia's representative in the European Court of Auditors between 2004 and 2016.

After the March 2015 parliamentary elections, the Estonian Reform Party and the Estonian Social Democrats formed a coalition government with Taavi Rõivas as the new Prime Minister. However, Mr Rõivas lost a parliamentary vote of no confidence in November 2016 that resulted in the breakdown of the governing coalition. President Kaljulaid subsequently invited the main opposition Centre Party to form government, which it did in coalition with the Social Democratic Party and Pro Patria and Res Publica Party. The leader of the Centre Party, Juri Ratas, was sworn in as Prime Minister on 23 November 2016. The next Parliamentary election is due in 2019.

Foreign Policy

Estonia regained its independence on 20 August 1991 following the dissolution of the Soviet Union. It became a member of the United Nations on 17 September 1991 and Baltic Assembly in November 1991. Since then, Estonia has pursued a foreign policy of close cooperation with Western European countries and institutions. Estonia joined the IMF and Council of the Baltic Sea States in 1992, the Partnership for Peace in February 1994, WTO in November 1999, and NATO in April 2004.  Estonia joined the European Union in May 2004, the Schengen Group of European countries in December 2007 and the Eurozone on 1 January 2011. Estonia has developed close ties with the Nordic countries, especially Finland and Sweden. In 1992, Estonia joined the Nordic-Baltic Eight. In 2005, Estonia joined the European Union's Nordic Battle Group. It is keen to become a full member in the Nordic Council.

Economic overview

According to IMF assessments, the Estonian economy has held up well since the global financial crisis. Economic growth is expected to continue to strengthen from 1.5 per cent in 2016 to 2.5 per cent forecast for 2017. Estonia is highly dependent on trade and its banking system is dominated by cross-border banking groups, meaning that its economic fortunes are closely tied to external developments.

Estonia is often described as one of the most ‘wired’ digital-friendly countries in Europe, with significant developments in e-governance and cyber security over the last decade. Estonia was the first country to permit online voting and it has consistently led the way in digital signatures and online transactions since. The country is home to Skype, which revolutionised telecommunications, and hosts NATO’s Cooperative Cyber Defence Centre of Excellence in Tallinn.

Bilateral relationship

Australia was one of the first countries to recognise Estonia's return to independence in August 1991, pushing strongly for the withdrawal of all Russian troops from Estonian territory in the period that followed.

Australia has the sixth-largest expatriate Estonian community after Finland, Russia, Sweden, Canada and the USA. The 2016 census in Australia recorded over 9,500 people who identified as being of Estonian ancestry.

Australia's Ambassador in Stockholm has non-resident accreditation to Estonia. Australia also has a consulate in Tallinn, headed by an Honorary Consul.Estonia is represented in Australia by an embassy in Canberra and honorary consulates in Adelaide, Hobart, Perth and Brisbane. Australia has a Working Holiday Maker arrangement with Estonia, which came into effect in May 2005. In September 2015, Australia and Estonia signed a bilateral Social Security Agreement. The agreement provides improved social security protection to people who live or work in both Australia and Estonia.

High-level visits

The Minister for Foreign Affairs, the Hon Julie Bishop MP, visited Estonia in April 2017. This was followed in June 2017 by visits by Australia's Ambassador for Women and Girls, the Hon Dr Sharman Stone, and Ambassador for Cyber Affairs, Dr Tobias Feakin. Then President of the Australian Senate, Senator John Hogg, visited Estonia in October 2013. Then Minister for Foreign Affairs, the Hon Stephen Smith MP, visited Estonia as part of a Foreign Ministers' Meeting of the International Security Assistance Force in Afghanistan (ISAF), held in Tallinn in April 2010.

Then Estonian Foreign Minister Marina Kaljurand visited Australia to open Estonia's Embassy in Canberra in February 2016. Then Foreign Minister Urmas Paet visited Australia in November 2011.

Bilateral economic and trade relationship

Two-way merchandise trade between Australia and Estonia is small, valued at $83.9 million in 2016. Australia's exports to Estonia totalled $10.7 million, primarily consisting of gold coin and legal tender, and prepared additives for mineral oils. Estonia's exports to Australia for the same period were valued at $73 million and included wood, telecom equipment and parts, computers, and measuring and analysing instruments.

Australian institutions are working to develop education links and student exchange arrangements with Estonia. Monash University in Melbourne has an exchange agreement with the Estonian Business School in Tallinn.

For information on doing business in Estonia, see Austrade's website

Last updated: September 2017

Last Updated: 19 September 2017