Why Estonia may be Europe's model country
The world's first cyberstate embraced austerity without whining even though its Soviet-era memories are still fresh.
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But in Estonia, where most remember the harsh lives under the USSR (roughly 10 percent of its population was deported to Siberian gulags), those cuts haven't resulted in any major public outcry. "We have seen much harder times," says Ligi.Skip to next paragraph
In fact, Estonians overwhelmingly supported their government's austerity measures: In March they reelected the government of Prime Minister Andrus Ansip, making him the first post-Soviet era prime minister to win a second term.
The Estonia example shows that "it is possible to undertake serious fiscal adjustment in a short period of time, and be popular," says Anders Aslund, senior fellow at the Peterson Institute for International Economics in Washington. "When you do what you have to do – cut expenditures and have a clear aim of your policy – you get reelected."
Estonia's fast break from communism
Estonians benefit from emerging from the Kremlin's yoke without the ethnic and political turmoil that has weighed down other post-Soviet states. When it broke free of communism, it started over with a crop of young entrepreneurs and idealistic leaders. "Because we started anew, we got new laws, new leaders, and new technology," says Jaan Tallinn, one of the founders of Skype, the Internet phone company that was recently sold to Microsoft for $8.5 billion. "The big winners were the start-ups."
Skype got its start in a grim Soviet-era complex on the outskirts of Tallinn, where the USSR secretly assembled its first computer. Mr. Tallinn credits a spirit of entrepreneurship and creativity that filled Estonia in the 1990s, giving rise to a spirited community of computer developers. "If you happen to start a new country in the 1990s, you have the advantage of drafting new laws with the knowledge that the Internet is out there," says Tallinn.
Estonia's early adoption of the Internet has turned it into one of the world's most wired countries (it's often called e-Stonia). There's free wireless Internet at almost every street corner. People pay their parking tickets with their cellphones and voters cast their ballots digitally – the first people to do so in the world.
"The Internet and [information technology] infrastructure is a way of life," says Linnar Viik, intellectual capital theory professor at the Estonia IT College. "This way of life and the values of this society aren't controlled by state ministries of defense. They are supported by culture, education, the economy."
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