ESTONIABy: Dana Wei

Located in Eastern Europe and borders the Baltic Sea and Gulf of Finland, in between

Latvia and Russia.

Capital: Tallinn Type of government: Parliamentary Republic

BACKGROUND

History• Previously ruled by Danish, Swedish, German, and Russian

governments, but finally free to govern itself in 1994

Religion• Estonians are considered the most non-religious people in

the 25-member EU, according to the Eurobarometer Poll 2005

Demographics • Population:1.3 million (July 2010)

67.5% of the population is between15-64 years• Literacy Rate: 99.8%• Urban Population: 73%• Rising middle-class in the last five years- the number of

Estonians who have minimum purchasing power continues to fall

ECONOMIC ENVIRONMENT

PPP-based GDP• $24.53 billion; ranked 114 compared to other countries

Imports• Primary commodities: machinery and electrical equipment,

mineral fuels, chemical products, foodstuffs 6%, plastics, and textiles

• Total Imports: $10 billion (2009)

Fast-growing GDP• 2000–2008: GDP grew at 7% per year

Placed Estonia among the three countries in the EU with the fastest growing real GDP

Estonia took a big jump in the improvement of average standard of living

• In 2010, the annual GDP grew by 3.1% compared to the previous year.

ECONOMIC FREEDOM

Estonia is considered one of the most liberal economies in the world

The Wall Street Journal and Heritage Foundation's Index of Economic Freedom 2011 ranks Estonia 14th out of 183 countries.

Economic Freedom of the World 2010 ranks Estonia12th out of 141 countries

Heritage Foundation’s Economic Freedom Index ranks Estonia 16th

In the late1990s, Estonia's trade regime was so liberal that adoption of EU and WTO standards actually forced Estonia to impose tariffs in certain sectors which had previously been tariff-free (i.e. agriculture)

COMMERCIAL INFRASTRUCTURE Estonia is noted for its advanced use of information technology, which demonstrates its commitment to global competitiveness- 76% of the population are Internet users

Estonia considered to be the leader in Eastern Europe for broadband DSL access. In terms of DSL penetration per telephone line, Estonia presently ranks among the top ten in the world

THE ESTONIAN CONSUMER

In 2000 Estonia had an upper-income class of about 10,000 and a growing middle-class numbering about 60,000- fueling domestic retail demand; this number has seen tremendous growth in the last five years as quality of life continues to improve

Estonians are characterized by economic growth and high consumer confidence, which has contributed to the consumer goods boom

BEVERAGE INDUSTRY

FEW BARRIERS TO ENTRY

Few political, policy or economic risks or barriers exist

Estonia began to adopt free-market policies even before it declared independence

Government sets privatization as a priority

An integral part of Estonia's transition to a market economy during the early 1990s involved reorienting foreign trade to the West and attracting FDI in order to improve the country's industry and commerce.

Today foreign companies dominate in several sectors of the Estonian economy. Banking and telecommunications are dominated by the Nordic players, but the food and electronics industries also rely heavily on foreign capital.

In 1999, Estonia joined the World Trade OrganizationIn 2004, Estonia became a NATO member state as well as an EU member state • Encourages fair trade, broadens market scope, and eliminates

some possibility of protectionism

DISTRIBUTION CHANNELS

Estonia's open economy, excellent transportation links and central location make it an ideal base for

production and distribution

Its location is a crossroads of East and West. • Estonia lies just south of Finland and across the Baltic Sea from

Sweden, both EU members and to the east are the huge potential markets of northwest Russia.

Estonia possesses modern transportation and communication links:• Captures a considerable share of the rapidly growing transit

trade through the Baltic Sea. • Passenger and freight links provide fast sea crossings across

the Baltic Sea• Direct air connections to Tallinn give easy access to major

European capitals.• Estonian railways use the same gauge that is used throughout

Russia and the CIS, making Estonia an attractive European hub for bulk shipment of goods

RECOMMENDATION

Yes, enter the Estonian beverage market!

RISING middle class population

Hospitable environment for foreign investment

Central location and excellent transportation and distribution links

Little state-owned enterprise competition; privatization placed as a priority

Member state of the WTO, EU, and NATO

High economic freedom

WORKS CITED

http://estonia.eu/

http://www.state.gov/r/pa/ei/bgn/5377.htm

http://www.bbn.ee/?PublicationId=c30a8977-9687-4267-b963-13879470689c

http://globaledge.msu.edu/resourcedesk/mpi/

http://blog.timesunion.com/scrimshaw/files/2009/07/estonia-song-festival-people1.jpg

CIA World Factbook

Statistics of Estonia, 2010

Questions?