Europe Short Read

Why Estonia might be the most well prepared country for the coronavirus

In 2018, Forbes named Estonia as one of the most technologically advanced countries in the world. Their e-government provides 99% of state services online. As Richard Davies says in his book Extreme Economies, “the only official things you cannot do online in Estonia are marry, divorce and buy a house.”1 Estonians vote online, see their GPs online and 95% of the population pays taxes online. All this is possible through their e-identity. All the personal information about a person is stored on a single card, allowing the country to have one of the world’s most advanced digital signature systems. Not only is information digital, production is too. The coronavirus crisis presents challenges to countries across the world. However, Estonia could overcome challenges and be presented with opportunities which other countries may not be due to its technological development.

In many ways, Estonia’s response to the COVID-19 crisis has been similar to that of the rest of the EU member countries. It closed its borders, set up a similar wage payment scheme to the UK’s and it has enforced a lockdown. However, Estonians have been finding that life in lockdown hasn’t presented so many challenges for them as it has for the rest of the world. Due to their online schooling system already being in place, many Estonian children are working no differently to how they were at the start of March. Every school in Estonia uses an e-schooling system (normally eKool or Studdium). These platforms work so well that not only is Estonia “Europe’s leading powerhouse”2 in education but they are also offering to share them with other countries. The e-environment has also facilitated and eased the transition into lockdown for the working population. The public has been allowed to declare themselves sick if required, something only doctors are normally allowed to do. Of course, this could lead to people being dishonest and declaring themselves ill without the need to do so. The Estonian president, Kersti Kaljulaid, said, “I am sure there are a bunch of free riders in the system”. This seems a small price to pay to make sure people stay at home. Due to this and the fact that testing kits are widely available in Estonia (they are testing the third most people per 1000 of their population of all countries worldwide3), Estonia has not had a single case of COVID-19 spread within a doctor’s surgery. This combined with the fact that the country was locked down very early means that Estonia has had just 1635 cases with 46 deaths. Furthermore, the Estonian cabinet is very used to working remotely as a result the e-cabinet initiative which was set up in 2000. Cabinet meetings are now paperless, sometimes remote and meeting times have been cut from five hours to, in some cases, thirty minutes. However, it is not all good news for Estonians. The global aviation industry is struggling and this is no different in Estonia. Over 40,000 jobs are at risk due to the tourism sector being hit. International trade will become increasingly difficult in the coming months. Before the pandemic, a growth of 5% was predicted in the country’s aviation industry. This made it one of the fastest-growing sectors. Estonia’s unemployment rate has jumped to 6.2% from where it was at 4.7% in January. The UK’s rate has only risen by 0.3% but that may be due to the job retention scheme in place which allows employers to furlough staff. We may yet see a steep rise in unemployment in the UK later on in the year. Compare unemployment to its neighbours and a similar story to Estonia’s emerges. According to Markku Lehmus, the chief of forecasting at Etla, Finland’s unemployment rate will rise to over 9% later this year having been at 6.5% in February.

Another way in which Estonia is well prepared for a global pandemic like the one we are experiencing is not through policies or innovation, rather the behaviour of Estonians. A study done by the Office of the European Union revealed that Estonians were amongst the least likely people to visit their family at least once a week of EU member countries. As well as Estonia, Poland, Denmark, Latvia and Lithuania also featured in the bottom five with under 35% of their populations making visits to relatives. In the UK, Spain and Italy, three of the countries which have been worst effected by the coronavirus worldwide, people are almost twice as likely to visit their families at least once a week than their Estonian counterparts.

Overall, what’s going to be the effect on productivity for Estonia in comparison to the rest of Europe? Estonia’s productivity has grown ever since its independence from the Soviet Union in 1991. It is 17% higher than it was in 2010 (the UK’s saw a growth of 2.8%). Ahti Heinla, one of the founding developers of Skype, an Estonian start-up, is seeking his next challenge by trying to make the production chain of a product bought online fully automated, from keyboard to doorstep. They have already made large inroads into this process and are now targeting the final and hardest aspect of the chain – the delivery. He aims to have it completed within 20 years. With much of the infrastructure in place to have a sector of the economy as big as manufacturing fully automated would mean a recovery from the coronavirus would be considerably easier in Estonia than a lot of other countries, providing that they are able to trade internationally. According to a study made by the CEPII, the leading French institute for research into international economics, by 2050 Estonia could become the second most productive country in the EU and one of the top five most productive countries in the world. Therefore, due to Estonia being so prepared for the crisis in education, government and manufacturing combined with the good leadership and management which it has experienced during the pandemic, it is probable that these efforts will be reflected in their recovery which should be quicker than both their neighbours and other countries around the world.

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