Estonians - Economy



Subsistence and Commercial Activities . Primarily agrarian until Soviet domination in 1940, the Estonians were a nation of farmers who produced grains, flax, potatoes, and animal products. There are also the historically important timber, shipping, and fishing industries. Industrialization took many years to establish itself following independence in 1920 because Estonia had little money, had been kept undeveloped by the landed nobility, and had little fuel for factories. It was fortunate for Estonia that it has large oil-shale deposits, which have been used to supply industrial needs. Soviet control turned Estonia into a primarily industrial nation; 60 percent of the gross national product and more than 65 percent of employment is provided by manufacturing. Much of the industrial output of Soviet Estonia went to the USSR; most of the Estonian oil shale, for example, went to provide gas for Leningrad.

Industrial Arts. Prior to Soviet domination, Estonia had a modern and well-developed industrial base, even though the country was at the time primarily agricultural. Estonia produced the following in quantities sufficient to export: butter, bacon, eggs, potatoes, flax, timber and lumber, pulp, paper, shale oil, textiles, glass, and artificial (casein) horn. Much of the required electrical power came from the burning peat, of which Estonia has large stores. The Soviets, established many new industries in Estonia, which produce concrete, scientific instruments, industrial chemicals, electrical equipment, refined oil, agricultural tools, and mining machinery.

Trade. Under the Soviets, nearly all of Estonia's trade was with the Soviet Empire. Following independence, Estonia embarked upon an ambitious program to enter western European markets, particularly those of Finland and Germany. Several Swedish companies have purchased such goods as automobile parts and cigarettes from Estonian companies. In January 1993 Estonia made an advantageous trade agreement with the European Community. Estonia, like all recently freed former Soviet republics, has been hindered by its earlier interconnectedness with the internal economy of the Soviet Empire. In one respect, however, the long-established trade routes with Russia and the largely open borders between the two countries have helped Estonia; they have led to a great deal of smuggling of Russian goods, which in Russia are sold at far below world prices. The nationalism that Estonia has experienced since independence has been growing, and as a result foreign investment in Estonia has rarely been welcome, despite a high unemployment rate.

Division of Labor. Women in urban areas traditionally remained at home to care for children and perform domestic tasks, whereas men worked outside the home. In rural areas women did this same work but also tended gardens and cattle and sometimes worked in the fields when needed. The traditional roles of women and children were altered by the Soviets. Women were "liberated" from the capitalist system so that they could be put to work in the oil-shale mines and at other physically onerous tasks. The Soviets also imposed a labor duty on boys of 14 to 17 years of age; this duty required them to attend industrial schools for six months and then to work wherever they were needed within the Soviet Union.

Land Tenure. The husband traditionally owned all of the family's property. During the period of freedom between the world wars, the new government embarked on a program of land reform. Approximately 750 of the great estates that had survived so long under the Russian government were expropriated by the Estonian government and divided into 55,000 parcels. Also, the 23,000 Estonians who had rented land were given freehold title to those lands. Real property was nationalized under the Soviets. Farms were collectivized in 1949, and the 140,000 Estonian farms were reorganized into 2,300 kolkhozy and 127 sovkhozy. By 1991 many of these had been combined so that there were a total of only 300 collective and state farms. The new Estonian government has already begun to dismantle these farms and to privatize farm ownership. By mid-1993 it aims to break all but 50 of the collective and soviet farms into 15,000-16,000 private farms. Moreover, all kinds of real property nationalized by the Soviets is being privatized by the Estonian Department of State Property. Those who lost their property to Soviet nationalization in 1940 may either take possession of the property they lost or accept compensation for it. Land not returned to previous owners is being put up for sale and may be purchased by Estonians. Estonians are being given vouchers for the years they have worked, at a rate of 300 kroon per year of employment; they may use these vouchers either to purchase their residences or to invest.


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