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Estonia:  Government Services Online On-Demand!
By   Shlomo Maital
  
    Hey, has anybody noticed little Estonia lately?  Time the world took notice.
As the whole world talks about the ‘digital revolution’ and ‘online government services’, Estonia has raced ahead and actually done it, quietly.
 Now they are offering to share what they did with the world.  “We have built a digital society”, Estonia says,  “and so can you.”
   What exactly have they done?
   Well – 21 years ago, it began with e-governance;  then paying taxes online in 
2000;  digital ID’s in 2001; voting online in 2005; public safety in 2007; blockchain in 2007; e-health in 2008; and e-Residency in 2014. 

     Basically – all the services you need from the Estonian government, you can get online.  You can pay your annual taxes, or file your annual return, online, in 20 minutes.  Now you can establish residency.
     I visited Estonia some years ago, on a benchmarking trip with Israeli managers.  I found the visit startling.  It all began with the Soviet Union.  Estonia once belonged to it.  The Russians feared computer science, and so banished computer science to the fringes, to Estonia.   Estonia now leverages that huge advantage.   Some 15 years ago,  a group of Estonians helped create Skype, along with a Swede. 
     Estonia offers to freely share what it knows and what it has done with the world.  I wish my country Israel, called Startup Nation, would visit Estonia and learn seriously what they’ve done.   Instead, my Prime Minister visits Brazil, praises the far right new President Bolsinaro, and plays soccer on the Copacabana 
 Beach. 

    Alas.

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Euro Nations: Benchmark Estonia

By Shlomo Maital     

 Estonia

  With all eyes focused on Greece,  it is easy to forget about little Estonia.  Bloomberg Business Week reports that this tiny nation, squeezed between Latvia and Russia, joined the Euro zone only four years ago.  Many countries leaped at the Euro capital markets opportunity and their governments sold bonds like drunken sailors. 

    Not Estonia.  Government debt is less than 10 per cent of GDP.  That is one – tenth the average debt burden in Europe, and about 1/20th the debt burden of Greece (170 per cent of GDP).

    How come?

    Estonia has refrained from issuing government bonds, since 2002.  Instead, the Estonian government took loans from the European Development Bank, which lends ONLY for infrastructure and investment, not to finance current government spending.  Maris Lauri says, “we can’t afford to borrow to finance current spending; such borrowing becomes a habit and we saw where that landed Greece and Russia, in 1997/8”. 

      Some Estonian economists are opposed. They think Estonia should leap at the low interest rates and borrow.  But it won’t happen. 

       “Estonia is a strange bird in the Euro zone,” says Frederick Erickson, who heads the European Institute for Political Economy in Brussels. “No other country has such a stronge instinct for understanding the way macroeconomic problems are rooted in the real economy.” 

       Estonia’s Prime Minister says Estonia has to save its borrowing and access to Euro capital markets, for the time when Estonia’s GDP reaches 75 % of the Euro average (it is now 73%), at which time European aid money dries up. 

        Strong wise leadership can keep a small country like Estonia out of hot water.  Greece, in deep hot water, has to be rescued.  Estonia will not.  As the Hebrew saying goes, wise leaders avoid crises that smart leaders know how to escape from. 

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
March 2019
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