Nations in Transit - Estonia (2003)

  • Author: Aili Piano
  • Document source:
  • Date:
    29 May 2003

Capital: Tallinn
Population: 1,400,000
Polity: Parliamentary democracy
Economy: Mixed capitalist
Status: Free
PPP: $10,066
Private Sector as % of GDP: 80%
Life Expectancy: 71
Religious Groups: Evangelical Lutheran, Russian Orthodox, Estonian Orthodox, other
Ethnic Groups: Estonian (65 percent), Russian (28 percent), other (7 percent)

NIT Ratings199719981999200120022003
Electoral Process2.001.751.751.751.751.75
Civil Society2.252.252.502.252.002.00
Independent Media1.751.751.751.751.751.75
Constitutional, Legislative, and Judicial Framework2.
Democracy RatingN/AN/AN/AN/AN/AN/A


Since the early years of post-Soviet transition, Estonia has been a regional front-runner in consolidating a democratic system of government. Estonia has enjoyed free and fair parliamentary and municipal elections, and the state has respected basic freedoms, including freedom of the press, religion, and the judiciary. Despite some problems with corruption, predominantly at the local governmental level, international corruption-ranking organizations have rated Estonia as the least corrupt country in the former Soviet Union and Eastern Europe. The status of the large noncitizen, mostly ethnic Russian, population remains a source of tension between Estonia and Russia, although various policy initiatives continue to address this issue.

The country's political system has been remarkably stable during the last decade, despite several changes of government that sometimes occurred in the midst of well-publicized scandals. Estonia's leaders have been able to draw upon the political and economic successes of the country's brief inter-war period of independence, a time that is still within living memory of many older Estonians, as a model for current and future policy decisions. In relation to many other countries in the region, the country's economic growth over the last 10 years has also contributed to overall political stability. Finally, Estonia can attribute much of its stability to the fact that successive governments have been in agreement on significant broad policy questions, even if they have disagreed on specific issues.

The consensus of Estonia's political elite on certain fundamental issues has allowed for the implementation of some of the most extensive political and economic reforms in the former Soviet Union. In a key example, entrance into the European Union (EU) and NATO has remained a central foreign policy objective of each national government. The necessity of adopting significant legislative changes to bring Estonian laws into harmony with EU standards has continued to drive much of the country's reform efforts during the last several years.

Although Estonia finally received formal invitations to join the EU and NATO in late 2002, entrance into both Western institutions is not a foregone conclusion. A public referendum on EU accession is scheduled for September 2003 (it is not clear whether a referendum on NATO membership will be held), and popular opposition to EU membership is widespread in Estonia. According to one public opinion poll conducted in November 2002, support for EU membership stood at 57 percent (64 percent for NATO).

Public support for accession is not higher for several reasons. Some observers point to the high economic and social cost of post-Communist reform that has touched many segments of the population. Others point to the low level of agricultural subsidies and the imposition of market barriers as conditions to joining the EU. Furthermore, many Estonians appear to be unaware of what EU membership will mean for them. In one public opinion survey conducted in spring 2002, half of the respondents believed that they were poorly informed on integration-related matters.

While EU-related issues made headlines in 2002, the year brought other developments in Estonia's political and legal landscape. In January, the prime minister resigned his position following growing infighting within the ruling coalition. The new government, whose coalition members reflected a more center-left orientation, nevertheless espoused continuing support for such established policy priorities as EU membership and most related reforms. The October local elections saw further defeat for the two traditional center-right parties that had been part of the previous national government. Estonia continued to move forward with a variety of reform measures in 2002, including the adoption of a new Penal Code and a Law on the Courts, as well as programs aimed at reducing corruption and improving the level of governmental cooperation with civil society.

Electoral Process (Score: 1.75)

Throughout the last decade, Estonia's political system has remained largely stable. Elections have been conducted freely and fairly, and successive governments have pursued pro-market and democratic reform policies along essentially the same lines. The country has also enjoyed stability despite several collapses of national governments that have been linked to scandals involving state officials and to unpopular or failed privatization programs. Estonia's independent media have been quick to publicize such negative developments, which have led to the public's growing disenchantment with many of the country's political leaders.

Since the restoration of independence, power has been transferred smoothly several times between left- and right-leaning governments. The most recent parliamentary elections, which took place in 1999, resulted in the formation of a majority government – one with greater prospects for longevity – by a center-right coalition. Although the left-wing Center Party received the most votes of any single party, the center-right Reform Party and Pro Patria, along with the more centrist Moderates, put aside enough of their differences to form a coalition. The three parties, which together captured 53 seats in the 101-seat legislature, evenly divided the 15 cabinet seats among them. The new leadership of Prime Minister and Pro Patria member Mart Laar, who had been the premier earlier in the decade, used its majority in Parliament to pass various legislative measures, including emergency spending cuts and radical Tax Code changes that were part of the coalition's broader economic liberalization program.

In contrast with the government's progress on the legislative front in 1999 and 2000, the Estonian political scene witnessed several scandals in 2001 involving high-level officials. In February, the newspaper of the opposition Center Party published a bizarre story that accused Prime Minister Laar of having fired a gun at a photograph of his long-standing political rival, Center Party leader Edgar Savisaar, at a shooting range in May 1999. Laar refused calls to resign by some opposition parties and major national newspapers after an investigation revealed that he had participated in the shooting incident. Other senior government figures, including the transport and communications minister and the economy minister, faced scandal in connection with the planned privatization of the country's national railway when media scrutiny revealed that a convicted felon was among the managers of the international investment group that had been awarded purchase of the railway. As a result of such revelations and scandals, public opinion polls indicated that confidence in the government was at only 28 percent, the lowest since the three coalition partners came to power after the March 1999 elections.

Popular disenchantment with the government, coupled with the failure of the three-party ruling coalition to rally behind a single candidate, led to the victory of former Soviet Estonian leader Arnold Ruutel in the September 2001 presidential election. Ruutel also enjoyed strong support in rural areas that have suffered in Estonia's ambitious drive for market reforms. Many poll watchers were surprised by Ruutel's successful bid for the presidency after he had lost the previous two presidential elections to Lennart Meri, who was barred by the Constitution from seeking a third consecutive term. Although Ruutel affirmed that the country's foreign policy priorities of EU and NATO membership should not change, he stressed that reducing unemployment and improving opportunities for education would be among his main goals. However, any changes in government policy are limited because the president's post is largely ceremonial.

On December 19, Prime Minister Laar announced that he would resign the following month because of increased infighting within the national ruling coalition of Pro Patria, the Reform Party, and the Moderates. His decision followed on the heels of the collapse of the same three-member coalition in the Tallinn City Council less than a week earlier, when the Reform Party withdrew its support and announced that it would form a coalition with the opposition Center Party. Some analysts maintained that Laar's decision was a tactic to try to salvage Pro Patria's declining popularity by moving it into the political opposition. Nevertheless, Laar's government enjoyed the distinction of having survived longer than any other since Estonia declared independence.

Laar fulfilled his pledge to step down in January 2002 and was replaced by Reform Party leader and former central bank president Siim Kallas. The new national government, in which the ideologically different Reform Party and Center Party joined forces in a new ruling coalition, now mirrored that of Tallinn's city government. This development, along with President Ruutel's election and the change in composition of the capital city's legislature, indicated a shift toward greater inclusion of the political left at both national and local levels and declining support for the traditional center-right parties. At the same time, Prime Minister Kallas stressed that he would follow the foreign policy priorities set by Laar's government, particularly EU and NATO accession.

The political scandals and frequent changes of government during the last 10 years have contributed to the public's general lack of interest in participating in the country's political process. After voter turnout at the national level increased slightly from 67 percent during the 1992 parliamentary poll to approximately 70 percent in 1995, it declined more sharply to 57 percent in 1999. Among the reasons cited for the decline were confusion over the various candidates and parties, many of which espoused similar platforms, and a perceived inability to influence the political system through voting. In local elections, voter turnout has remained largely steady, though below figures at the national level. Approximately 52 percent of eligible voters, including noncitizen permanent residents, took part in the 1993 and 1996 elections. In the 1999 local elections, turnout saw a modest decrease to 49.4 percent. During local polling in 2002, voter participation rose again to 52 percent.

Voter apathy has also been expressed in the low levels of party membership in Estonia. The number of eligible voters as of November 1,2002, was 858,505. However, total membership nationwide in the country's most prominent political parties was only about 28,500. The two largest parties are the Estonian People's Union (8,000 members) and the Center Party (7,400), followed by Res Publica (4,000), the Moderates (3,200), the Reform Party (3,000), and Pro Patria (2,900).

In an attempt to gain wider public support, many political parties have merged during the last decade. Between mid-1998 and August 2002, the number of political parties registered in Estonia declined from 28 to 20. The Parliament Election Act encourages the formation of larger, and therefore fewer, political parties by establishing a 5 percent threshold that parties must meet in order to enter Parliament. Just two months before the registration deadline for the March 1999 parliamentary elections, Parliament approved an amendment to the Political Parties Act that raised from 200 to 1,000 the number of members that a party must have in order to register and run in an election. Some smaller parties raised concerns regarding the late introduction of these changes and claimed that the move was prejudicial against them.

Despite the continuing decrease in the number of parties in Estonia, the country's electoral system remains multiparty based at all levels of government. Seven electoral coalitions and 9 parties competed in the 1995 national legislative elections, and 12 parties took part in the 1999 poll. In September 1998,13 political parties were represented in Parliament. After the 1999 poll, there were only 7, owing largely to mergers of smaller parties. Nineteen parties participated in the 1996 local elections; the number decreased slightly to 14 in 1999 and 13 in 2002.

Although the Constitution stipulates that only citizens of Estonia may be members of political parties, noncitizens, the majority of whom are Russian-speaking non-ethnic Estonians, may vote in local elections. Several political parties have been formed to address the concerns of both citizen and noncitizen Russian speakers and to increase their involvement in Estonian politics. Other parties maintain that they already represent the interests of different ethnic groups throughout the country. Of the seven parties that captured enough votes to enter Parliament following the March 1999 elections, only one, the Estonian United People's Party, could have been considered a predominantly Russian party. The Estonian Unity Party, which regards itself as politically center-right, was registered officially in October 2001. While two-thirds of its members are nonethnic Estonians, the party's leadership rejects claims that it is solely a "Russian" party.

Questions regarding the participation of Russian speakers in the country's political life were highlighted in December 1998, when Parliament adopted changes to the Parliament Election Act and the Local Government Council Election Act. Under the amendments, candidates were required to possess sufficient Estonian-language skills to participate in their respective assembly's work and understand legal acts. The amendments, which took effect in May 1999, did not affect candidates in the March 1999 legislative elections.

The Organization for Security and Cooperation in Europe (OSCE) criticized the amendments as incompatible with Estonia's Constitution and international human rights standards. The commissioner of the Council of Baltic Sea States also expressed concern that they would restrict a citizen's right to run for office and the right of the electorate to vote for the candidates of their choice. On November 21,2001, in a reversal of policy, Parliament voted to abolish the Estonian-language requirements – a decision that helped convince the OSCE to end its 10-year mission in Estonia on December 31. At the same time, though, Parliament voted to make Estonian the official working language of both Parliament and local councils. Reportedly, it did so to balance the law abolishing the Estonian-language requirement for candidates in national and municipal elections.

Civil Society (Score: 2.00)

Since the restoration of independence, Estonia's nongovernmental organization (NGO) sector has undergone significant and often rapid changes, including the emergence of many specialized nonprofit groups. Nevertheless, the legacy of the Soviet era and ongoing economic difficulties throughout much of the country continue to impede the development of civil society. Many NGOs face such challenges as insufficient management skills, financial constraints, and fledgling cooperation with the government sector and the general public. In response, various groups have taken steps to address some of these problems by organizing training programs, conducting research into the state of the country's nonprofit sector, and providing opportunities for greater information exchange.

The first several years after the disintegration of the Soviet Union witnessed a rapid growth in Estonia's nonprofit sector, with the establishment of hundreds of new NGOs and the renewal of some voluntary organizations that had been active before 1940. As of November 2002, there were 17,285 registered nonprofit associations and 490 foundations. More than half of these are real estate and business groups, while the rest are involved in community and social service activities, including education and health issues. Women's issues are represented by such diverse organizations as the Estonian Association of University Women, the Estonian Women's Studies and Resource Center, and Civil Courage (an umbrella organization of women's groups). A number of religious groups are engaged in local charity work. The Agape Center, an initiative of the Methodist congregation of the city of Parnu, and the Tallinn Christian Care Center operate assistance programs that include educational outreach, clothing donations, and soup kitchens. The interests of the country's ethnic minorities are represented by organizations like the Estonian Union of National Minorities. Despite the remarkably large number of officially registered nonprofit organizations, most are either small in size or largely inactive.

Popular participation in NGOs remains constrained in part because the existence of a truly independent civil society – as opposed to the enforced voluntary activities of the Soviet period – is still a relatively new phenomenon. Other factors include larger economic concerns that limit the ability of much of the population to engage in charitable activities and a belief that civic initiatives will not solve the country's problems. According to a 2001 study conducted by CIVICUS and the Open Estonia Foundation, 42 percent of NGOs surveyed reported membership bases of 30 people or fewer. The same study indicated that perhaps only half of all nonprofit groups in the country enjoy active membership bases.

Recent legislation governing the operation of nonprofit organizations includes the Nonprofit Associations Act and the Foundations Act. The Nonprofit Associations Act states that a nonprofit group may be recognized as a legal entity only if it is officially entered in the nonprofit associations and foundations register. The registration process is generally not regarded as particularly complicated or costly. Nonprofit associations and foundations are granted certain tax exemptions, including on the payment of entrance and membership fees.

Despite a general trend toward greater professionalism in the nonprofit sector, most NGOs continue to suffer from limited institutional and organizational capacities. Many smaller groups in particular do not have a clearly defined management structure and lack the skills to engage in long-term strategic planning initiatives. With the exception of leading and established NGOs, which employ full-time, permanent, paid staff members, most organizations rely on part-time or volunteer help. During the last several years, a small but capable cadre of local trainers, usually associated with NGO support centers, has developed to assist members of less developed nonprofit groups.

The long-term financial viability of most NGOs remains problematic because of inadequate fund-raising efforts and limited public experience with philanthropic activity. Individual nonprofit organizations typically have few sources of funding, and the amounts donated are small. Another problem for the nonprofit sector is the general public's unawareness of, or indifference to, the activities of Estonian NGOs. This is true in part because many, especially smaller, groups spend little time publicizing their work. Since most NGOs are not well versed in public relations, the media devotes relatively little attention to them. Local and regional newspapers tend to provide greater coverage of local nonprofit groups than do national media. One notable exception has been the inclusion in a leading Estonian paper, Postimees, of a monthly supplement that highlights developments in the nonprofit sector.

In an effort to help remedy some of their organizational, financial, and public image concerns, nonprofit groups have demonstrated an increasing willingness and ability to exchange information and cooperate on joint projects. The Network of Estonian Nonprofit Organizations (NENO), an umbrella group for the country's NGOs, operates in the capital and through nine regional support centers across the country. NENO provides support services, conducts training programs, participates in lawmaking initiatives, and issues publications on various NGO topics in Estonian, Russian, and English. In 1999, NENO helped to organize Estonia's first national NGO conference for nonprofit groups to discuss issues of mutual interest and concern.

Cooperation between the state and the nonprofit sector to shape public policy and legislation continues to expand. In April 2001, a group of NGOs under the direction of NENO submitted to Parliament a document entitled The Estonian Civil Society Development Concept (EKAK) that defines the complementary roles of the public and nonprofit sectors and outlines mechanisms for the future development of civil society. In December 2002, Parliament adopted the EKAK as a national strategy for the government's cooperation with nongovernmental organizations. While seminars and conferences involving the NGO community and government officials have become more frequent, primarily larger, well-known NGOs acting on the national level participate in the drafting of legislation and other political discussions.

Estonia's trade union sector, which operates independently from the government, has continued to see membership decline in recent years. According to the U.S. State Department, membership in the Central Organization of Estonian Trade Unions (EAKL), the country's principal trade union alliance, decreased from a reported high of 500,000 in 1992 to 330,000 in 1993,200,000 in 1994, and only 50,000 in 2002. This decline has been attributed largely to the privatization and breakup of large, government-owned enterprises and the subsequent shift of workers to smaller firms and the service sector. The Organization of Employee Unions, which split from the EAKL in 1993, has 40,000 members. A central union of food-processing and rural workers was established in the late 1990s. Approximately one-third of Estonia's workforce reportedly belongs to one of these three labor federations.

Entrepreneurs organizations have grown in Estonia since the mid-1990s. The country's largest business organization, the Estonian Chamber of Commerce and Industry, has a membership base of some 3,200 large companies and smaller enterprises. The Estonian Business Association represents 44 enterprises, while the Estonian Association of Small and Medium-Size Businesses, which was founded in 1988, is the country's oldest organization of its kind. The Estonian Farmers' Federation, whose membership declined from 10,000 in 1991 to approximately 5,000 in 2002, defends the interests of farmers. The Estonian Chamber of Agriculture and Commerce, which unites Estonian agricultural producers, processors, and other groups in the food sector, consists of some 150 member organizations and companies.

Although the Constitution stipulates that only citizens of Estonia may join political parties, noncitizens may form nonprofit and social groups. Estonian law prohibits political parties and associations from directing their activities toward the violent change of the country's constitutional system or from otherwise violating criminal law. Politically active interest groups focus on issues such as education, the environment, minority rights, and social welfare. Organizations involved in public policy research, including the Jaan Tonisson Institute (JTI), have worked with the government to affect policy on economic, political, and human rights issues.

The country's educational system, which is free from political control, has seen the number of private schools increase during the last decade. In 2002, there were 10 private universities, compared to 5 in 1998 and 1 in 1996. At the beginning of the 2001-2002 academic year, there were 10 private higher education institutions compared to 7 public institutions (excluding vocational schools).

In Estonia's state-funded schools, where both Estonian- and Russian-language education continue to be available, lawmakers, education experts, and instructors have debated the issue of the language of instruction. In March 2002, Parliament adopted amendments to the Basic Schools and Upper Secondary Schools Act that will maintain state-funded education in Russian after 2007, the year that it was due to be replaced with Estonian. Under the amendments, individual schools may apply to keep Russian as their language of instruction, and schools will have to propose measures to provide for the eventual shift to Estonian. Critics of the original law had charged that the government had done too little to prepare for the transition and that it would adversely affect students in mostly Russian-speaking areas, particularly in the country's northeast.

Independent Media (Score: 1.75)

Estonia's media sector is free from government interference and is characterized by a surprisingly large number of print and broadcast outlets given the country's small population. With already one of the highest Internet penetrations in the region, Estonia in 2002 launched a new project to provide further free computer and Internet education. Partly as a result of intense competition for limited advertising and subscription revenues, financial difficulties continue to plague some newspapers and broadcast media.

The Estonian Constitution prohibits censorship and guarantees the right to freedom of expression, provisions the government respects in practice. According to Article 45, "Everyone shall have the right to freely circulate ideas, opinions, persuasions, and other information by work, print, picture, and other means," and "there shall be no censorship." Although there is no specific press law, print media are regulated through other pieces of legislation, including the Copyright Act, Competition Act, Language Act, and State Secrets Act. Electronic media are governed by the May 1994 Broadcasting Act, which enshrines the right of television and radio stations to make independent decisions about the content of their transmissions. Freedom House's Annual Survey of Press Freedom rated Estonia as "Partly Free" in 1992 and "Free" from 1993 to 2002.

The overall legal framework provides adequate protection for press freedom, and there are no legal penalties for "irresponsible journalism." Estonia's Criminal Code, which was repealed in June 2002, had carried a penalty of a fine or detention for defaming or insulting the honor or dignity of another person. Under a new Penal Code that entered into force in September 2002 and replaced Estonia's Criminal Code, only cases involving the defamation or insult of a representative of state authority, a person enjoying international immunity, a court, or a judge are punishable by a fine or up to two years in prison.

While public service radio and television receive financing from the state budget, they do not face government interference in their editorial decisions. Although the country's major newspapers possess particular political leanings, not all openly endorse individual parties or candidates. A holding company owned by Tallinn's deputy mayor, Vladimir Ivanov, and his son purchased two Russian-language newspapers in 2002. One local media analyst predicted that the Estonian United People's Party, of which Ivanov is a key member, would be presented in a more favorable light in the two publications. Much of the media conduct probing investigative reports, but some journalists tend to publish rumors and allegations as facts. Some newspapers have presented paid political advertisements as part of their editorial content. Much of the country's media outlets are controlled by foreign interests, notably companies from Sweden and Norway.

For a country of only 1.4 million people, Estonia currently boasts three nationwide television stations: the privately owned TV3 and Kanal 2 and the state-run public service channel Estonian Television (ETV). Cable and satellite networks offer programs from all over Europe. More than 30 radio stations operate throughout the country, including the state-owned public service broadcaster Eesti Raadio, which controls four nationwide channels. The country's large Russian-language-speaking population can tune in to five Russian-language radio channels: one public service channel operated by Eesti Raadio and four commercial channels. Although there are no local Russian-language television stations, ETV and Kanal 2 carry some Russian-language programs. Viewers also have access to the ORT and NTV channels from Russia via cable networks or home satellite receivers. In April 2002, Parliament approved a plan to increase Russian-language broadcasts on ETV from 55 hours in 2002 to 96 hours by 2005.

All Estonian-language daily newspapers are privately owned and receive no state subsidies. There are dozens of weekly papers and magazines, as well as local and regional publications. Of the country's six national daily newspapers, four are printed in Estonian and two in Russian. According to information provided by the Estonian Newspaper Association (EALL), the circulations of the four major dailies are 73,300 for Postimees, 65,900 for Ohtuleht, 34,000 for Eesti Paevaleht, and 19,400 for Aripaev. The country's two largest weeklies, Eesti Ekspress and Maaleht, account for approximately 90,000 copies per week. There are nearly 20 Russian-language newspapers, including the dailies Estonija and Molodjozh Estonii and the weeklies Den za Dnem and Vesti Nedelya, which have a combined circulation of about 50,000.

Use of the Internet in Estonia has exploded during the last decade. The first permanent Internet connection was established in April 1992. In 1996, only 2 percent of Estonians were regular users, a figure that rose quickly to 10 percent in 1998,26 percent in 2000, and about 40 percent in 2002. Estonia continues to have one of the highest Internet penetrations of the former Soviet Union and Eastern Europe and has more Internet users than some European Union member states. The increase in Internet use has been attributed to growth in home computer sales and to successful national campaigns to extend Web access throughout the country, including at public sites where Estonians can use the Internet for free.

According to a 2002 study of Internet use that was financed by the International Bank for Reconstruction and Development and the Open Society Institute, the main reasons cited for not using the Internet were lack of personal interest, inadequate computer skills, and lack of access (including the high cost of purchasing a home computer). Under a project launched in 2002, several banks and telecommunications companies will provide free basic computer and Internet education to 100,000 adults, mainly in rural areas. In February 2002, Tartu University, the country's largest institution of higher education, launched an Internet portal for online studying.

The main organization representing the interests of the media is the EALL, an umbrella group of newspaper publishers, editors, and journalists that was established in 1990. Uniting nearly 40 newspapers, EALL engages in lobbying efforts, conducts training courses, and issues publications for member organizations. Of the its 14 board members, 2 are women.

In 1991, EALL established the Estonian Press Council, comprising various broadcast and print-related organizations, as a regulatory body to support the development of professional standards and practices for journalists. The Estonian Press Council also hears cases involving journalistic conduct. In 2001, the council received 33 complaints, of which 13 were upheld. In 2002, EALL created a new Press Council after resigning from the old council over disagreements concerning the body's leadership. The new nine-member Press Council met for the first time in June. In December, it agreed to a request from Internet news portals to handle complaints regarding the journalistic content of these sites as well. Other media associations include the Association of Estonian Broadcasters and the Estonian Journalists' Union.

The large number of competing press and broadcast outlets relative to the small size of the country's population has contributed to financial difficulties for some private media. For example, the national commercial station TV1, whose broadcasting license was annulled in October 2001, was hundreds of thousands of dollars in debt and had not paid its employees for the two previous months. Despite receiving government funding, the state-run ETV also has faced numerous financial problems, which have led to staff dismissals and reductions in programming. Between 1997 and 2000, ETV ran a budget deficit of between 1.5 and 2.5 million euros. In July 2002, ETV stopped airing commercial advertisements as required under amendments to the Broadcasting Act. The loss in revenue is expected to be offset by nearly $1 million in broadcasting license fees that the country's two national private television stations will be required to pay.

At the same time, the country's media advertising market continues to increase, rising from 40.8 million euros in 1999 to 52 million euros in 2002. In 2002, newspapers accounted for 45 percent of all media advertising, followed by television at 24 percent, magazines at 13 percent, and radio at 10 percent. Other media outlets, including the Internet and outdoor advertising, make up the remaining 8 percent.

Governance (Score: 2.25)

The October 2002 local elections led to a clear defeat for two traditional center-right political parties, while the parties represented in the national ruling coalition were returned to power in Estonia's two largest cities. A new center-right party passed its first political test by capturing a surprisingly large number of votes nationwide. With parliamentary elections just five months away, the outcome of the local poll was watched with particular interest and attention. At the same time, efforts to improve the work of Estonia's national and local governments and the country's civil service sector continued during the year. Although Estonia has made considerable progress overall, areas that require additional attention include reducing the number of municipalities, improving the financial viability of local governments, and further modernizing the country's civil service.

Over the last several years, the government has taken various steps to ensure transparency in the work of the executive and legislative branches. Article 44 of the Constitution requires all state and local governments to provide information about their activities to Estonian citizens at their request. The only exception is information that is intended for internal use only or that is prohibited by law from being revealed. Most sessions of Parliament are open to the general public. The official Riigiteataja (State Gazette), which is available online, publishes laws that the legislature adopts. The government press office, along with each ministry's press secretary, disseminates official information to the news media. Every plenary workweek, senior officials, including the prime minister, hold televised briefings at which they answer questions from members of Parliament. A Public Information Act designed to improve government transparency applies to state and local agencies as well as to private entities that provide public services like education and health care. Under the law, which took effect in January 2001, government agencies must post information on the Web; e-mail requests are treated as official requests for information.

The national government launched a Web portal in June 2001 called TOM (an Estonian acronym for "Today I Decide"), which aims to encourage greater transparency in government by enabling Internet users to participate in various stages of the legislative process. This novel program capitalizes on Estonia's widespread use of information technology by displaying bills and amendments to current laws that various ministries have proposed. Before the bills are sent to Parliament, Internet users can log on to the site and submit their comments through a chat room. They also can propose new draft laws for consideration. Suggestions that receive support from a majority of users are then sent to the relevant ministry or Parliament committee for discussion.

Although the 1992 Constitution provides a general legal basis for local power, Parliament has adopted subsequent laws to address specific subnational government issues. These include the Rural Municipality and City Budgets Act (June 1993), the Local Taxes Act (September 1994), the Territory of Estonia Administrative Divisions Act (February 1995), and the Local Government Council Election Act (March 2002). As established by the Constitution, local authorities manage and autonomously resolve local issues. The basic functions of local government include such tasks as the organization of social services and the maintenance of local public transportation and roads. Local authorities also share certain responsibilities with the central government, including in the field of education. Although currently there is no regional level of self-government, county governments are responsible for organizing and coordinating the work of national institutions at the local level.

Municipal governments receive funding from the state budget through both direct budgetary appropriations and shared taxes. They also raise revenues autonomously. Money is allocated from the state budget to local budgets for purposes that may include supplementing budget revenues. At the same time, the Constitution stipulates that local governments have their own independent budgets and possess the right to levy and collect taxes and to impose fees. The Local Taxes Act establishes the types of taxes that local authorities have a right to levy, including local sales tax, entertainment tax, and motor vehicle tax.

Local governments continue to face financial difficulties and to operate at a deficit. According to the Estonian Ministry of Finance, for the first 11 months of 2002, total revenues of local governments equaled 9.491 million kroons (about $722,000) while total expenditures amounted to 9.799 million kroons (about $746,000) During the same period, revenues from personal income taxes (a shared tax that is centrally imposed and collected) constituted 41 percent of the total income of local budgets. Grants from the national government accounted for 36 percent. The remaining 23 percent comprised other tax revenues (5 percent), nontax revenues (16 percent), and other grants, including those from abroad (2 percent). The vast majority of revenue for local authorities comes from the central government, effectively placing some limits on the financial independence of local governments. Ongoing efforts to reduce and consolidate the overall number of local authorities – and thereby improve each authority's financial and administrative capacities – progressed slowly in 2002.

Since the restoration of independence, Estonia has held four local elections: in 1993,1996,1999, and, most recently, October 2002. International observers have described each poll as free and fair. Although only Estonian citizens may stand as candidates, noncitizen permanent residents who have lived in their respective municipality for at least five years are allowed to vote in local elections.

Seven months before the October 2002 municipal poll, Parliament adopted amendments to the local Law on Elections banning election alliances. According to supporters of the amendments, the aim was to increase the responsibility of political parties by preventing them from entering into temporary unions of convenience. Critics charged that the move would limit opportunities for smaller parties to compete. The country's legal chancellor challenged the constitutionality of the amendment and referred the law to the Supreme Court's Constitutional Review Chamber (CRC). In July, the chamber ruled that the ban was unconstitutional, noting that it had been established too soon before the October vote and therefore could significantly affect the election outcome. Because the chamber's ruling could not be appealed, Parliament had to amend the law again to allow for election alliances.

The results of the October local election were watched closely as a possible predictor of the March 2003 parliamentary vote. The local poll was contested by over 15,000 candidates – more than 70 percent on party tickets, approximately 26 percent as members of electoral alliances, and the remainder as independents. Nationwide, the Center Party was the clear winner, capturing 25.8 percent of the vote. Res Publica, a new center-right party, came in second with 15.5 percent, followed by the Reform Party with 12.2 percent and the Estonian People's Union – the country's main rural party – with 11.2 percent. In Estonia's most important municipal race for the Tallinn City Council, the Center Party captured 32 out of 63 seats, while Res Publica took 17 seats, the Reform Party 11 seats, and the Estonian United People's Party – an alliance of Russian-speaking politicians – 3 seats.

The election signaled a resounding defeat for Pro Patria and the Moderates, who already had been pushed out of the national ruling coalition at the start of the year. Nationwide, Pro Patria captured only 6.6 percent of the vote, while the Moderates secured only 4.4 percent. Neither party gained a single seat on the Tallinn City Council. The results also demonstrated a desire among the electorate for a new political force; both parties lost considerable support to Res Publica, which had campaigned for a "new politics" based on greater honesty and openness. Meanwhile, the country's Russian parties also suffered a poor showing, polling under 5 percent nationally and capturing only three seats in the Tallinn City Council. The Center Party, which enjoyed an overwhelming victory in the predominantly ethnic Russian northeast city of Narva, cut into much of the Russian parties' traditional base of support.

Following the election, the Center and Reform Parties signed a coalition agreement in Tallinn, where they were already coalition partners. Res Publica became part of the opposition. Incumbent mayor of Tallinn Savisaar was reelected to his post the following month.

Although Estonia's public administration underwent six reorganizations between 1987 and 1995, substantial reform of the civil service system began in 1996 with the entering into force of three key pieces of legislation that established a legal framework for public service. The Public Service Act, the Government of the Republic Act, and the State Public Servant Official Titles and Salary Scale Act address issues such as the rights and duties of public servants, their recruitment and evaluation, and the salary scales for different levels of employment. Under the Public Service Act, local civil servants are considered local government employees. Recent reform efforts include the approval in February 2002 of civil service training priorities drawn up by the state chancellery and several government ministries. The priorities, based on those set out in the 2001 Public Administration Reform Program, will address such issues as financial management, personnel training and appraisal systems, and general administrative reform.

While most of Estonia's civil servants conduct their work in an impartial and politically neutral manner, the public service administration continues to suffer from a lack of transparency in recruitment, promotion, and remuneration levels, as well as inadequate coordination among different administrative bodies. The majority of the country's civil service is under the age of 40, while one-third are under the age of 30. Staff turnover rates range from about 12 to 14 percent. As of the end of 2001, there were 20,166 employees in the Estonian administration, a decline of 2 percent from the previous year's total of 20,500. Approximately 4,000 to 5,000 people are employed in local government. According to a 2001 amendment in the Wages Act, the salaries of high-level civil servants and members of the boards and supervisory councils of state-owned enterprises must be posted on the Internet as public information. The decree is intended to create greater financial transparency in the civil service sector, where many employees currently receive significant bonuses and allowances in addition to their regular wages.

Constitutional, Legislative, and Judicial Framework (Score: 1.75)

Estonia has made significant progress during the last decade to establish and support an independent and professional judicial system. In 2002, the adoption of a new Law on the Courts represented a significant step in further improving the judiciary's independence and administration, although its effective implementation will need to be tested over time. Penal law reform advanced when a new Penal Code, adopted in 2001, entered into force in September 2002. The government continues to address issues affecting the country's nonethnic Estonian population, including citizenship and language legislation and integration efforts.

One of the first legislative priorities following the restoration of independence was the reestablishment of Estonia's Constitution, which was adopted by public referendum in June 1992 with 93 percent of the vote. The Constitution guarantees fundamental human rights, including freedom of conscience, religion, thought, and assembly, and prohibits discrimination on the basis of nationality, race, color, sex, language, origin, creed, political or other persuasions, and financial or social status. It also includes a chapter on the rights and obligations of citizens and noncitizens. Estonian citizens have the right to engage in commercial activities and to form profit-making associations, as do foreign citizens and stateless persons residing in Estonia, unless otherwise determined by law. Property rights are protected under the Constitution. No property may be expropriated without the owner's consent, except in cases of public interest and in exchange for appropriate compensation. In practice, the government generally respects these political, social, and economic rights.

Estonia's Constitution establishes the division of power among the executive, legislative, and judicial branches of government, and this separation exists in practice. Among the main responsibilities of the country's 101-member Parliament are the adoption of laws and regulations, the passage of a state budget, the election of the president, and the authorization of the prime ministerial candidate to form a government. The executive branch, which is represented by the prime minister and his cabinet, executes domestic and foreign policy, prepares draft laws, administers the implementation of laws adopted by Parliament, and directs the work of government institutions. Estonia's president, who serves as the country's head of state, commands a largely ceremonial position. Under the Constitution, justice is administered only by the country's court system, and judges are not allowed to hold any other elected or appointed office.

The country's legal chancellor reviews laws adopted by the national and local governments for conformity with the Constitution. If a conflict is found and appropriate changes are not made by the respective legislative body within 20 days, the legal chancellor appeals to the Supreme Court for a repeal of the law. The legal chancellor also serves as an ombudsman by handling individual complaints against state institutions and officials. Since there is no separate court for addressing constitutional matters, the Supreme Court serves as the court of constitutional review through its Constitutional Review Chamber (CRC). The chief justice of the Supreme Court serves as chairman of the CRC.

In 2002, the CRC issued several rulings, including one on the constitutionality of a ban on electoral alliances several months before the country's municipal elections. In its decision, the CRC noted that in Estonia's current social and political environment, the ban disproportionately restricted political representation; it was declared unconstitutional based on Article 12 (sustaining individual equality) and Article 156.1 (requiring local elections to be general, uniform, and direct). In another major case, the CRC ruled that a section of the taxation law which gave the finance minister the power to set penalty rates for delinquent payments, was unconstitutional. The Court based its argument on Article 13 of the Constitution, which mandates that state taxes, duties, fees, and fines are provided by law, and decided that only Parliament should be authorized to codify the rate into law.

Estonia's Constitution and other legislation include safeguards for the independence of the judiciary, and most judges are regarded as politically impartial in their rulings. Among the main guarantees for judicial independence are provisions for life tenure for judges and protections against their removal from office. The impartiality of judges is reinforced by limits on their outside activity, such as prohibitions on holding positions in Parliament or city councils, belonging to a political party, and being managing partners or members of the boards of companies.

Ongoing reform of Estonia's judicial system took a decisive step forward with the adoption of a new Courts Act in June 2002. The new law, which entered into force in July, represented a further improvement in the judiciary's independence, particularly from the Ministry of Justice. The Courts Act eliminates political involvement in disciplining judges by transferring the authority to initiate proceedings against judges from the Ministry of Justice to the legal chancellor. The training of judges is now under the overall responsibility of a new Council for Judicial Training rather than the Ministry of Justice, and the Courts Act raises the salaries of judges to enhance their economic independence. With the exception of the Supreme Court, the administration of courts is now shared by the Court Administration Advisory Council (most of whose members are judges) and the Ministry of Justice. However, although the council is tasked with significant administrative decision-making powers, the Ministry of Justice retains primary responsibility on budgetary matters. In addition, the effective implementation of the new Courts Act will need to be tested over time.

While the courts are increasingly staffed with competent professionals, there is still room for improvement. The lack of clear and defined standards for selecting, evaluating, and promoting judges remains a noted area of concern. The number of vacant judges' posts continued to decline slightly from 14 of 238 total posts in 2000 to 10 of 238 posts in 2001 and 7 of 243 posts in 2002. At the same time, the backlog of criminal court cases – defined as the proportion of cases pending for more than one year – grew slightly during 2001. A provision of the new Courts Act increasing the role of court managers to deal with daily operations may help to decrease the backlog by relieving judges of some managerial tasks. The quality of court decisions in the lowest-level courts appears to be getting better, as evidenced by the growing number of decisions in criminal cases upheld on appeal; however, the percentage of decisions upheld on appeal in civil cases has declined slightly. Judicial decisions in both criminal and civil cases generally are implemented effectively, and the collection of money awarded in court cases is improving.

Significant progress in penal law reform took place when a new Penal Code that was adopted in June 2001 entered into force in September 2002. The new code replaced the Criminal Code of the Estonian SSR that was adopted in 1962 and revised in 1992 (with subsequent amendments). Among the important changes in the Penal Code were the inclusion of both criminal offenses and administrative offenses (misdemeanors) and the introduction of community service as an alternative form of punishment. Under Estonian law, a warrant is required for the search and seizure of property. During the investigative stage, the prosecutor issues warrants after probable cause has been shown; after a case goes to trial, the court issues warrants. All defendants must be given the immediate opportunity to choose an attorney. The state must provide an attorney to anyone who cannot afford legal counsel.

The government's three-year prison reform plan, which was adopted in March 2000, continues to work toward improving prison conditions throughout Estonia. A new prison built to EU standards opened in the town of Tartu in October 2002, while renovation of the country's other prisons moved forward. However, problems remain in such areas as overcrowding, lack of funding and trained staff, and reports that law enforcement officials use excessive physical force and verbal abuse against suspects and inmates.

During the Soviet era, large numbers of non-Estonians, mostly Russians, migrated to Estonia. They and their descendants now constitute approximately one-third of the country's total population of 1.4 million. Under the 1992 Citizenship Act, which readopted legislation from 1938, anyone born after 1940 to a parent who was a citizen of pre-World War II Estonia is a citizen by birth. Those who arrived during the Soviet period are regarded as immigrants who must apply for citizenship based on requirements that include residency in Estonia and knowledge of the Estonian language.

The 1995 Citizenship Act toughened certain conditions for naturalization, such as the length of residency. The Russian government, Russian speakers in Estonia, and some international organizations criticized elements of the law as discriminatory. In December 1998, the government adopted amendments allowing children who were born to legally resident, though stateless, parents after February 26,1992, to acquire Estonian citizenship at the request of their parents and without having to pass a language test.

As of late 2002, approximately 1.1 million residents of Estonia were citizens. Of these, around 117,000 have received citizenship by naturalization since 1992, and 4,091 were naturalized in 2002. About 216,000 hold permanent residence permits, and 53,200 hold temporary residence permits. Bureaucratic delays and the language requirement continue to be cited among the primary disincentives for securing citizenship. In an effort to encourage more residents to take the language exams, the European Union launched a program in 1999 to reimburse the language-training costs for those who passed the language exam.

Knowledge of the Estonian language remains important not only with regard to the acquisition of citizenship, but also in terms of employment and political participation. Under current legislation, public sector workers are required to have a minimum level of Estonian-language ability, proportionate to the public interest of their positions. Certain private sector employees, including pilots, rescue workers, and teachers at private schools and universities, must be proficient in Estonian when it is in the public interest. Although Parliament abolished Estonian-language requirements for candidates for public office in 2001, it also adopted a law making Estonian the official working language of local councils. However, the government can grant municipalities the right to conduct their business in another language if it is the language of the majority of the locality's permanent residents.

The status of Estonia's large ethnic Russian population continues to strain relations with Russia, which has accused Estonia of violating the group's rights. However, according to a recent EU report, the rights of the Russian-speaking minority, both citizens and noncitizens, are largely observed and safeguarded. During the last decade, the government has taken a number of steps to further integrate all nonethnic Estonians into society. In 1993, Estonia's president established a roundtable of national minorities to participate in the state's national minorities policy. The Non-Estonian Integration Foundation, a state institution, was established in 1998 to facilitate various integration-related activities. In 2000, the government approved a state integration program for 2000-2007 that focuses on education, language training, and public awareness campaigns; its implementation will be reviewed on an annual basis. In March 2002, Finland, Sweden, Norway, and the United Kingdom pledged $1 million for integration projects.

Corruption (Score: 2.50)

Estonia enjoys a reputation as one of the least corrupt countries in Eastern Europe and the former Soviet Union. Over the last several years, it has implemented various policies to enhance the transparency of state institutions and the accountability of public officials. Although Estonia has a relatively limited corruption problem overall, there are questions regarding the effectiveness of anticorruption enforcement efforts. Specific areas of continued concern include corruption at the local government level and within the customs and border guard services.

Estonia has made significant progress toward instituting a comprehensive anticorruption legislative framework. Laws that address issues related to corruption include the Anticorruption Act (which includes a code of ethics for public officials), the Public Service Act, the State Procurement Act, the State Property Act, the Money Laundering Prevention Act, the Public Information Act, and the Penal Code. In the area of international instruments, Estonia has ratified three conventions sponsored by the Council of Europe: the Convention on Laundering, Search, Seizure, and Confiscation of the Proceeds from Crime; the Civil Law Convention on Corruption; and the Criminal Law Convention on Corruption. Furthermore, Estonia participates in the Council of Europe's Agreement Establishing the Group of States Against Corruption (GRECO), the Baltic Anticorruption Initiative, and the Anticorruption Network hosted by the Organization for Economic Cooperation and Development.

The primary anticorruption methods aim at preventing conflicts of interest by requiring declarations of financial assets by public officials and by restricting private sector employment. Under the Anticorruption Act, government officials may not join directory bodies at commercial enterprises, unless the enterprise is partly state owned. They may engage in enterprises if they receive permission from their government agency and if the enterprise does not hinder their work as public servants. In addition, public officials must submit yearly declarations of their economic interests. Currently, some 15,000 officials present such declarations. The declarations of high-ranking officials, including members of Parliament, judges, and government ministers, are submitted to the Parliamentary Anticorruption Committee for review and published in the State Gazette. Since 2001, the wages of high-level civil servants and members of the boards and supervisory councils of state-owned enterprises have been freely available on the Internet.

Although laws addressing corruption have been well established, the effectiveness of enforcement and implementation of anticorruption legislation is less certain. The security police, which is the principal law enforcement body responsible for detecting and investigating corruption and is functionally independent of the main police force, is generally regarded as performing its role well. However, pretrial investigations of corruption cases involving municipal officials fall within the jurisdiction of local police and therefore are arguably less stringently pursued. The State Audit Office conducts external audits of all public expenditures and revenues and is generally regarded as competent at the central administration level. However, as with the security police, its limited authority to audit local governments has been cited as a source of concern. The Public Procurement Office, which verifies legal compliance of procurements, has come under fire for being subject to political interference and for lacking adequate force to supervise and inspect contracting authorities. The Parliamentary Anticorruption Committee has been criticized for having limited effectiveness in scrutinizing the economic declarations of high-ranking officials.

While there is little evidence of corruption in the judicial system, the effectiveness of the courts in prosecuting corruption cases is subject to some doubt. In 2001, there were 58 convictions for corrupt acts, including for the acceptance of bribes, misuse of official position, and abuse of authority. However, only seven defendants received prison sentences. This apparent leniency in the imposition of punishments has been cited as possibly encouraging a climate of tolerance toward corruption. In a report released in 2002, GRECO concluded that the "results of corruption investigations and prosecutions are not impressive."

In the case of corrupt senior-level government officials, there have been some successful prosecutions in the past few years. In one case that attracted considerable publicity, two top Ministry of Finance officials were convicted in 2000 – one for corruption and the other for misuse of official position – in connection with a car that was purchased for the ministry at a special discount and then sold to an official for private use at the same price. A more recent high-profile corruption case concerned the Estonian Culture Endowment, the organization that funds most of the country's cultural activities. In August 2002, police arrested its director, Avow Viiol, who confessed to having embezzled some $500,000 of the endowment's funds between 1999 and 2002. Estonia's culture minister, who had supervised Viiol, subsequently tendered her resignation in the wake of the growing scandal. A decision in Viiol's case was pending at year's end; if convicted, he could face a maximum sentence of eight years in prison.

Most personal services, such as admission to educational institutions and hospitals, do not require the payment of bribes, and corruption in business registration and licensing appears to be rather limited. While there is generally little evidence of corruption among most civil servants, the low salaries of some public servants (relative to those of private sector counterparts) have led to concerns regarding the potential for corruption. Customs and border guards have been cited as being particularly vulnerable, given the illegal activities such as smuggling and organized crime with which they come into contact while performing their jobs. In response, the Customs Board has adopted a number of anticorruption measures, including the establishment of departments to conduct financial audits and participate in investigating corruption cases of customs officials.

Bribery among local authorities, where business and government officials are sometimes closely connected, is regarded as one of the most serious and widespread corruption problems in Estonia. This has been compounded by the fact that local police, who have relatively little training in corruption issues, rather than the more experienced security police, conduct investigations into acts of corruption by local officials. Among the areas cited as most likely to be affected by corruption at the local level are restitution and privatization of property, public procurement projects, and abuse of official travel.

Despite these concerns, the overall level of corruption in Estonia continues to be considered among the lowest in comparison with other transition countries in the region. In Transparency International's 2002 Corruption Perceptions Index, for example, Estonia received a score of 5.6 on a 10-point scale, where 10 represents the lowest possible level of corruption. Of 102 countries surveyed, Estonia was ranked 29th, the best placing of any former Soviet country and just two places behind the highest-ranked Eastern European state, Slovenia.

During the last several years, nonstate actors have worked to raise public awareness of and further help combat corruption. The nonprofit Jaan Tonisson Institute, which serves as the national chapter of Transparency International, has conducted various educational programs and research projects on corruption-related issues. JTI has often coordinated its efforts with state agencies, other nonprofit organizations, and private enterprises. In 2002, it organized a project for Estonian, Latvian, and Lithuanian government officials, journalists, and NGO representatives focused on developing and exchanging ideas for combating corruption in all three Baltic countries. The country's media, particularly the printed press, have become increasingly active in exposing corruption. In the last few years, the media have devoted considerable coverage to corruption in the issuance of driver's licenses and to allegations of corruption surrounding the privatization of Estonian Railways.


Aili Piano is a senior researcher at Freedom House and the managing editor of Freedom in the World, the annual global survey of political rights and civil liberties. She is a specialist on the former Soviet Union.

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