Estonian Review: August 9-22, 2006

24.08.2006

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FOREIGN NEWS

Minister: Estonia backs international forces in Lebanon

Aug 9 - Estonia is in favor of sending international forces to southern Lebanon but doesn't have the capacity right now to contribute its own troops to the force, Foreign Minister Urmas Paet said.

"We are in favor of having international forces in South Lebanon, who together with the Lebanese national army would ensure the central government's control over the country's entire territory," Paet said. "Control by the Lebanese central government over the entire country is important to prevent provocations by Hizbollah," he said.

During the meeting that took place at the request of the Israeli envoy residing in Helsinki, Tzur presented Israel's view of the cause of the conflict, its course, and the ways to solve it.

Also talked about was preparation of the UN Security Council resolution that would be aimed at achieving rapid and lasting peace.

Paet recalled the statement by the EU last week that brings out the need to immediately end hostilities and then conclude a lasting peace, as well as the UN resolution number 1559 dealing with Lebanon.

Speaking about Estonia's possible participation in international forces, the minister said Estonia doesn't have the necessary capacity at this point, as the country's defense forces are already taking part in four missions.

He didn't completely rule out the possible participation of Estonian troops, though, saying that the matter had to be discussed with the Defense Ministry.

Estonia currently has two officers in the region taking part in the United Nations' UNTSO mission as military observers. Capt. Madis Morel is stationed in South Lebanon and Maj. Ove Voore in the Syrian capital Damascus.

Estonia has been taking part in the UN peacekeeping mission in the Middle East since March 1997.

Baltic rescue departments cooperate

Aug 10 - Meeting in the Estonian sea resort Pärnu on Thursday, leaders of the rescue services of the Baltic States agreed about intensifying trilateral cooperation and planning of cooperation as regards missions in third countries.

The director general of the Estonian Rescue Board, Mati Raidma, said the main directions of cooperation of the rescue departments were cross-border cooperation, cooperation in the territory of one's neighbor, and cooperation related to missions in third countries.

As examples of cross-border cooperation and cooperation on the soil of neighbor, Raidma named the dispatch of a rescue helicopter by Latvia to help put out a large wildfire in northeastern Estonia a few weeks ago.

As regards foreign missions, Estonia already has experience of foreign missions, whereas Latvia and Lithuania are planning participation in such missions.

The Baltic colleagues spoke about staging common training events and exercises to pool their resources for participation in missions elsewhere in the world, Raidma said. A minor launch of such cooperation has already taken place, with Estonian rescue officers having spoken in seminars in Latvia and Lithuania.

In what regards cooperation in each other's territory, Estonia has a bilateral agreement with Latvia and negotiations with Lithuania are due to start this fall. It is possible that a trilateral agreement will be signed, Raidma said.

Under the arrangement, the countries would each choose specific areas of disaster management capability that they would develop as a priority.

"The problem of small countries is that it's difficult and expensive to be ready for everything," Raidma said.

The three heads of rescue services decided to make such meetings regular and hold them at least once a year. At least one more meeting is planned for this year.

The heads of the rescue services of Estonia, Latvia and Lithuania also meet at events of the EU and the Council of the Baltic Sea States.

EU rescue service heads meet twice a year. The meeting of the heads of the rescue services of the Baltic Sea states is attended also by representatives of Russia.

Estonian student returned to family

Aug 12 - A story covered in last issue was resolved quietly when Aminat Mahmudova, a 19-year-old Estonian university student abducted by unknown persons in the capital of the Russian republic of Dagestan earlier this month, was returned to her parents on the night between Friday and Saturday.

DEFENCE NEWS

Estonian squadron returns home from Kosovo

Aug 14 - Estonian servicemen of the reconnaissance squadron BALTSQN-13 Sunday returned from their six-month mission in Kosovo.

The 66-strong unit under the command of Capt. Mait Müürsepp flew to Kosovo in mid-February.

The squadron's main task was to carry out patrol missions, perform searches and ensure the security of various sites, a spokesman for the defense forces headquarters said. Receiving the unit, commander of the headquarters Brig. Gen. Alar Laneman said that although there were no open hostilities in Kosovo at the moment, the experience received from such a mission was still important.

"Open hostilities will one day end also in Iraq and Afghanistan and we must be ready to keep peace in the direct sense of the word."

Commander of the unit, Capt Mait Müürsepp, said the situation in Kosovo was stable and peaceful and that there had not been any incidents where the men could have risked their lives. "The daily routine, patrolling in the area and guarding of the base could be regarded as the most difficult duties," Müürsepp added.

Before going on the mission the Estonian personnel went through a cycle of training under Danish instructors to streamline command procedures, exercise cooperation with other units and activity in densely populated areas.

The parliament on last Dec. 7 extended the mission of up to 150 Estonian defense forces personnel in Kosovo until the end of 2007.

A week of engaging anti-government forces in Afghanistan's south

August 12 - The Estonian infantry unit serving in southern Afghanistan since the end of last month has been engaged in combat this week with groupings hostile to Afghanistan's government.

Apart from non-critical injuries sustained by three personnel late on August 11, the unit has been unscathed.

The anti-government fighters also have attacked units of Afghanistan's security forces active in the region.

The Estonian unit ESTCOY-2, which uses Finnish-made Pasi armored vehicles, supports units of Afghanistan's armed forces and police in the Garmser region in the southern part of the Helmand province in southern Afghanistan.

The 37-strong Estonian unit that has been active in and around Garmser since July 27 has mounted mobile patrols to dominate the region and discourage anti-government forces from attacking the regional center, as well as to interfere with their activity.

Garmser was where the unit was hit, apparently with anti-aircraft rounds, on August 11. Two of the injured soldiers were taken by helicopter to a hospital at the Camp Bastion base of the British battle group. One of them returned to the unit after receiving first aid, while the other was left under monitoring for a few days. The third soldier was given first aid by members of his own unit and he continues service.

Maj. Toomas Mols, acting head of the Estonian contingent in Afghanistan, said the security situation in southern Afghanistan was complex, as could be predicted.

"It's the region where the Taliban got its start, and achieving the same level of security there with northern Afghanistan cannot happen overnight," Mols said.

The Estonian unit ESTCOY-2 under the command of Ltn. Ain Tiidrus arrived in the mission area in southern Afghanistan at the end of May.

The chief of the British contingent in Afghanistan, Brig. Gen. Ed Butler, has praised the Estonian unit for the military effect achieved in Garmser.

The strength of the Estonian contingent is set to increase from the present 78 to 120 personnel by the end of the year.

Last year the parliament extended participation of Estonian soldiers in the operation in Afghanistan by two years, with up to 150 soldiers to be sent to that country at any one time.

The Estonian defense forces have taken part in the operation in Afghanistan since 2003.

ESTPLA-13 finds weapons cache in Iraq

Aug 14 - The Estonian ESTPLA-13 infantry platoon discovered two caches of weapons in Iraq and detained one suspected “terrorist” during the weekend.

Two guided missile launchers and one missile, as well as numerous different side arms and a large quantity of ammunition was discovered from the cache from a village near the town of Sab al Boor, the defense forces headquarters reported.

Lt. Meelis Joemaa, chief of the 34-strong ESTPLA-13, said it was a transit cache terrorist groupings used for the hiding of weapons and ammunition before delivery to the end users.

"Every weapon, cache or any material used for the making of explosives is important in increasing security of the local people's lives," Lt. Joemaa said.

The caches were found in the process of collecting information. Metal detectors were used in finding the caches, which had been dug into the ground. Besides the Estonian unit received information about the hidden weapons from the local people.

"Estpla-13 proved another time that their equipment and preparations are of a high level," said U.S. Army Capt. Ryan Long, company commander of the Estonian unit.

Estpla-13 is serving near Baghdad in the composition of the 1st Battalion battle group of the 4th U.S. Infantry Division.

DOMESTIC NEWS

Left-center alliance polarizes Estonian politics in run-up to presidential election

The Estonian Center Party and People's Union, two of the parties in the governing coalition, finalized their agreement on strategic cooperation.

"We found that it's very important to gather the state again and stand against the concept of thin state. We think that for the people of Estonia strengthening of statehood is important, and the agreement's being dominated by that spirit too," Center Party leader and minister of economy and communications Edgar Savisaar.

Incumbent President Arnold Rüütel is supported by the Center Party and People's Union, although opinion polls indicate that, if the president were elected in a popular vote and not in parliament, the Social Democrat Toomas Hendrik Ilves would win easily. The opposition parties have backed Res Publica's Ene Ergma as their candidate with the proviso that should Ergma fail to garner enough support in the first round, Toomas Hendrik Ilves would stand as candidate in the second round (in which the members of the Riigikogu plus the electoral body vote).

More progress toward protecting sea, environment from sunken freighter

Aug 10 - The Estonian government decided at its Cabinet meeting Thursday to start preparations for pumping fuel and lubricants out of the tanks of the freighter Runner 4 that sank off the Gulf of Finland island of Vaindloo in March.

The government ordered the Ministry of Economy and Communications to start procedures via the Maritime Administration to give the owner of the ship a final deadline for emptying the ship.

The Interior Ministry meanwhile must immediately call a tender to find the company that would pump out the fuel.

In case if the ship-owner fails to empty the wreckage of fuel and oil by Aug. 31, the interior minister must ensure that works to eliminate the environmental hazard are carried out.

The Environment Inspectorate was tasked with preparing an evaluation of the pollution and the pollution threat.

The Runner 4 sank off the Estonian island of Vaindloo in the Gulf of Finland the night into March 6 after another ship in a convoy led by a Russian icebreaker crashed into it. The sea in the area is about 80 meters deep.

Estonia's ETV starts to digitally archive its entire program

Aug 11 - Eesti Televisioon (ETV), Estonia's public service television outlet, is adopting a state-of-the-art system that allows it to archive its entire program in digital format.

ETV Board Member Ainar Sepp said that the system, Volicon Observer, enables the TV station to archive its entire program. Until now ETV has been recording separate broadcasts and excerpts of program on videotape.

When the new system is taken into use the daily programs of ETV will be available in an online archive during 30 days. After that they can be obtained from ETV on DVD.

The system has been tested since June, and on Friday it was approved for use by the board of ETV.

ECONOMIC NEWS

Currency rates in kroons
(Bank of Estonia)

Fitch upgrades Estonia's country ceiling from AA- to AA

Aug 18 - Fitch Ratings has raised Estonia's country ceiling from AA- to AA, the international ratings agency said in a statement.

Fitch has upgraded the country ceiling for a total of 40 countries of the world, including Latvia and Lithuania, whose ratings have been raised from A+ to AA-.

According the agency's statement, the rise of the ratings for Estonia and 39 other countries reflect significant liberalization of capital and currency control markets, strengthening of fiscal and currency policy as well as the increased integration of these countries in the global economy.

Foreign labor pros and cons weighed

Aug 22 - Estonia has been advised to import foreign labor from such places as Ukraine and Belarus, while Estonian premier has stressed that Estonia should increase productivity instead and develop high-tech and niche sectors of the economy.

The need for workers is twofold. Estonia may face a workforce deficit next decade, a reflection of the low birth rate in the 1990s. Traditional industries such as shipbuilding and construction would feel the shortage first. Experts also say that greater reliance on foreign workers would slow down the rise in wages, reducing inflation, which is the main obstacle to Estonia's efforts to adopt the euro.

The Estonian Employers' Confederation has been making efforts in recent weeks to find political support to an Estonian-Ukrainian accord on labor exchanges, the daily Eesti Päevaleht reported.

The agreement would allow companies to import thousands of skilled workers from Ukraine and thus alleviate the shortage of labor in Estonia, the report explained.

"If we want the economy of Estonia to grow at the current pace, this agreement proves inevitable. Many sectors could develop much faster already now," said the chairman of the Employers' Confederation, Enn Veskimagi.

Visiting the Estonian Economic Affairs Ministry, representatives of the International Monetary Fund (IMF) recommended on August 22 to Estonia considerable simplification of the introduction of foreign labor, the ministry reported.

Franciszek Rozwadowski, head of the IMF delegation, justified his recommendation by saying that a larger proportion of foreign labor would slow down the rise in wages, because rapidly rising wages also meant higher inflation, complicating Estonia's accession to the euro zone.

But IMF also suggested that as Estonia was not able to meet the inflation criterion anyway, it should consider an immediate rise in excise taxes, not their postponement. Although the rise in alcohol, tobacco and motor fuel excise would briefly speed up inflation, life would be that much simpler for Estonia later, the IMF representatives found.

In the opinion of the IMF delegation the biggest problems of the Estonian economy were in the private sector which had a high foreign debt. They were also concerned by the speed of the development of the Estonian real estate market and the rate at which the popularity of consumer credit was increasing, the ministry said.

Economics minister Edgar Savisaar was critical of the idea of importing workforce, taking a protectionist slant.

"In a higher growth rate period many Turks settled in Germany and Arabs in France, creating numerous problems that have not disappeared there until today," Savisaar said. "This is a dangerous game."

On August 18, Prime Minister Andrus Ansip said that instead of searching for ways how to bring in workers from other countries, Estonia should take steps to increase productivity, has said.

Speaking on a direct broadcast of the Russian-language Radio 4, Ansip observed that talk was rife in Estonia on how the country was suffering from a shortage of doctors, rescue workers and bus drivers, many of whom had gone to work in Finland.

"But ten years ago there were from 15,000-20,000 Estonians working abroad, and today the same number of 15,000-20,000 are working there -- the numbers aren't increasing," the head of government said.

Six years ago the unemployment rate in Estonia was 14 percent, compared with 4.9 percent today.

This means that if six years ago the country had unemployment as its one big problem, today the state has hundreds of new tasks to deal with, which do not include unemployment. What does exist is the problem of shortage of skilled labor, Ansip said.

"The level of productivity in Estonia is only half of the respective indicator in Finland and Sweden," the premier said. "This is an enormous resource, which we need to make use of here, in Estonia. And only after that can we think about bringing work force here from abroad," he added.

Ansip said that bringing in cheap labor will not help solve the country's economic problems.

"We have to pay more attention to education and developing R&D intensive industries," he said.

Figures show upturn in activity on Estonia's real estate market in Q2

Aug 18 - Both the number of transactions as well as the average value of a transaction increased on the Estonian real estate market in the second quarter of 2006 compared with the preceding quarter, the Statistical Office said.

During the quarter over 15,000 purchase-sale contracts of real estate worth a total of 19 billion kroons (EUR 1.1 b) were notarized.

Compared with the first three months of the year, which as usual saw a decrease in activity on the real estate market, there was an upturn in the market in the second quarter, the report said. In comparison with the previous quarter, the total number of purchase-sale contracts of real estate increased by one-tenth and their value by one-third. Compared with the second quarter of 2005, the respective indicators increased by 7 percent and 75 percent.

Estonian Air nets €4.21m in 2005

Aug 14 - Estonian Air earned a profit of 65.9 million kroons (EUR 4.21 mln) in 2005, despite a nine percentage point reduction in market share, the company's annual report reveals.

Of the year's profit, 10.9 million kroons came from the sale of fixed assets. Profit increased 2.4-fold in comparison with 2004.

Sales in 2005, at 1.151 billion kroons, mark an improvement by one-fifth on the figure for 2004.

The company's total assets as of the end of the year stood at 503.9 million kroons.

The number of passengers grew by 17 percent, whereas the market grew by 40 percent. Owing to that the company's market share declined from 55 percent in 2004 to 46 percent last year.

Port freight volumes up 8.8% in July

Aug 17 - Estonian ports handled 4.33 million tons of freight in July, which is 8.8 percent more than in the same month last year, figures by the Statistical Office show.

The ports loaded 3.75 million tons of cargoes last month, compared with 3.53 million tons in July 2005. Month-on-month, loading volume decreased by 76,500 tons or 2 percent.

Estonia's airports see 28% more passenger traffic

Aug 14 - The number of passengers passing through the airports and heliports of Estonia during the first half of this year was 773,589, 28 percent more than in the respective period of 2005, the Civil Aviation Administration said.

The figure for the second quarter, 434,041, surpassed the Q2 2005 figure by 124,176.

The airport of Tallinn served 743,291 passengers during the first six months of the year, the Copterline heliport in Tallinn 10,590, the airport of Kuressaare 8,142, the airport of Kärdla 5,186 passengers, and the airport of Pärnu 2,868 passengers. The airports of the small Gulf of Riga islands of Ruhnu and Kihnu saw respectively 952 and 2,124 passengers, while the airport of Tartu was lagging behind with 436 passengers.

Cargoes passing through the airports during the second quarter amounted to 3,262.6 tons, 16 percent more than in the same quarter of 2005. During the six months 10 percent more cargoes than last year, or 5,554.1 tons, were handled.

Carriage of mail climbed roughly 4 percent year-on-year to 200.8 tons in the second quarter. In the first six months of the year, 430.3 tons of mail was shipped through the airports, a 9.4 percent increase in annual terms.

Estonia: cost of production of industrial output up by 4.6% on year

Aug 21 - Production of industrial output increased by 4.6 percent in July compared with the same period last year, the Statistical Office reported.

Compared with this June, the cost of the production of industrial output was 0.2 percent higher in July.

The product price index for July was affected more than the average by a rise in the production of groceries and beverages and in the manufacture of metals and metal products.

The export price index fell by 0.2 percentage points in July against June but grew by 4 percent against last July.

The import price index climbed by one percent against June and by five percent against July 2005.

Estonia: funded pension assets total €383 million

Aug 21 - The sum total of assets of the second pillar or funded pension funds Friday crossed the line of 6 billion kroons (EUR 383 mln); during the year the sum total of the funds has risen by more than three billion kroons.

As of Friday the sum total of the funded pension funds was 6,147 million kroons.

The number of people having acceded to a funded pension fund crossed the line of half a million people last week, with 500,313 persons having acceded to pension funds. The 300,000th person acceded to a pension fund in September 2003 and the 200,000th person in October 2002.

Energy body to convene in Tallinn for annual meeting

Aug 22 - The General Assembly of the World Energy Council (WEC) will meet in Tallinn at the beginning of September, with 450 top-level specialists and company leaders from 95 countries attending the forum.

The first three days of the forum will be devoted to meetings of WEC committees; delegates will then have the opportunity of visiting different sites in Estonia and Finland, the Eesti Energia (Estonian Energy) power utility reported.

The official WEC session on September 6 will elect a new leader for the organization. The General Assembly will be concluded by the Estonian Energy Day on September 7, giving the delegates the opportunity of receiving first-hand information about development of the Estonian energy industry.

Organizer of the Tallinn General Assembly is the WEC Estonian National Committee headed by chairman Sandor Liive, who is also board chairman of Eesti Energia. Patron and supporter of the General Assembly is Economic Affairs Minister Edgar Savisaar.

The World Energy Council, established in 1923 and having members from 95 countries, is the biggest and leading global organization uniting numerous energy sectors.

The WEC Estonian National Committee was established by the Economic Affairs Ministry, the Academy of Sciences, Tallinn Technical University, Eesti Energia and Eesti Gaas (Estonian Gas) on July 16, 2003.

The General Assembly of the World Energy Council (WEC) will take place from September 3 to 7. It is the most important event in the world energy sector.

CULTURAL NEWS

Estonian movie wins big in Japan

Aug 15 - The Estonian movie Ruudi won the grand prix at the Tokyo-based Kodomotachino children's film festival, the only one of its kind.

Ruudi and the boy playing its leading role, 8-year-old Paul Oskar Soe, who was present at the festival together with the director Katrin Laur, became the absolute favorites of the festival jury, a spokesman for the Estonian Film Foundation (EFS) reported.

EFS said the members of the jury, program leaders, announcers and interviewers were all children.

"Ruudi, supported by the little Paul Oskar, brought Estonia, the Island of Saaremaa, our life and our problems closer to the Japanese public. And although the film didn't give answers to all the question, it was clear without understanding the language that one person always understands another person. So the Japanese public understood Ruudi as Paul Oskar did his new Japanese friends," EFS said in its information.

Leader of the festival, which took place for the 14th time this year, is Renate Zylla from Germany, who headed the children's section of the Berlin Film Festival for 17 years. The initiator and spirit of the festival is the businessman Mitsu Tahira, for whom it is a passion and a hobby. The festival lasted from August 8 to 13.

According to an agreement between festivals, the winner of Kodomotachino will be screened at the Tokyo International Film Festival this fall.

Allfilm's Ruudi, which had its first screening this February, has collected a public of nearly 40,000 in Estonia. At present Ruudi is being shown as the main film of Movie Bus, an itinerant movie house currently traveling in southern Estonia.

Raining gold at juniors in Beijing

Aug 22 - Estonia's rising generation of athletes looks promising, after the country netted four gold medals at the junior track and field championships in China.

Nineteen-year-old Margus Hunt opened Estonia's tally with a world record in the discus with a throw of 67.32 meters on August 15 and closed the games for Estonia by taking gold in the shot put as well.

Kaire Leibak, 18, won the women's triple jump with an Estonian record.

Marek Niit, 19, astounded spectators by winning the men's 200 meters, traditionally a US-dominated event, after a Ukrainian athlete was disqualified.

Estonia was fifth in the overall medal count after the US, Kenya, China and Russia.

Also in sports, on August 12, Tallinn's Kadriorg Stadium saw a new world record set at an international track and field night-Tatyana Lysenko's 77.80 meters in the hammer throw-the first world mark set in Kadriorg in 20 years.

At the European championships in Goteborg on August 12, Estonian discus thrower Gerd Kanter took silver and his countryman Aleksander Tammert bronze. Kanter's best was 68.03 and Tammert's 66.14 meters. Lithuanian Virgilijus Alekna secured his European championship.