Communists are out, and capitalism is taking root on this Soviet-ruled island off Estonia. Long the target of invaders, it may soon be the destination for foreigners of another sort: tourists

IT COULD be the ferry to Martha's Vineyard. Families relax on the deck, soaking in the end-of-summer sun that has finally emerged victorious over the week's drenching sea-coast rain. Blond children in hand-knit sweaters frolic with dogs. A snack bar dispenses soft drinks. And aside from the fatigues-clad border guard who examines your passport and special island visa when you drive onshore at the end of the ride, the island looks about as communist as Martha's Vineyard, the popular resort island off the Massachusetts coast.

There isn't a Benetton's (yet) or any cute bed and breakfasts, but Saaremaa - the largest of Estonia's 1,500 islands - has ``quaint summer getaway'' written all over it. Fishing villages dot the coastline. The occasional windmill, once the island's symbol, punctuates the horizon. Tidy gardens brighten tidy cottages.

Saaremaa hasn't always been so quiet. Over the centuries, the 1,048 square miles of the island have seen a steady stream of foreign invaders and occupants. In the 13th century, it was the Danes and the Germans. In the mid-16th century, Denmark ruled alone. A century later, the Swedes took over. In the 18th century, it was the Russians' turn. During the two world wars, the Germans were here. Late in 1944, Saaremaa was the last bit of Estonia to be ``liberated'' by the Russians.

Now the people of Saaremaa are bracing for the next invasion: tourists.

Last year, following discussions between the Estonian government and Moscow, access to Saaremaa - a restricted border zone - was eased considerably. Foreigners may now visit the island, after gaining permission from the Estonian Ministry of the Interior. As before, mainland Estonians and other Soviet citizens also must get visas to visit, but they are issued more freely now.

But the most important event paving the way for greater tourism, and for a healthier island economy, came in April: Saaremaa dumped communism. The transfer of power from the party to the local councils has been going on gradually for the past four to six years, officials here say. But the decisive break took place after this spring's Estonian Communist Party congress, when all of the island's top officials quit the party.

``For a long time, the party hasn't played the main role,'' says Jaan Lember, deputy mayor of Kuressaare, the island's capital. ``Now, I can say with finality, the Communist Party plays no role on this island.''

The biggest question now regarding the party is what to do with its headquarters, whose ownership is under dispute. The most popular idea is to turn the building into a hotel.

Even for Estonia - the northernmost Baltic republic, which has itself signaled a clear course away from communism and Soviet rule - Saaremaa is radical. It is one of the few places in the republic to dismantle the Soviet structures of government and replace them with the old style of government councils and districts that existed during Estonia's pre-World War II independence. Delegations from Saaremaa have visited nearby Sweden for advice on tourism and how to set up local government.

Kuressaare is one of three towns in the republic to switch to a ``self-sufficient'' budget. Previously, local revenues went to the Estonian capital, then to Moscow, which would disburse the money as it saw fit. Now the money stays in the town, with only an agreed-upon percentage going to the regional and republic governments.

Saaremaa can afford to be in the vanguard of Estonian reform. Ninety-four percent of the 40,000 people here are Estonian, so it has none of the ethnic problems that trouble many regions of mainland Estonia and complicate the republic's drive for independence. (Overall, Estonia is only 60 percent ethnic Estonian; most of the rest are Russian.)

This lack of tension has allowed islanders to do what comes naturally to them: They are starting their own businesses and making profits, a concept far less alien in the Baltics than in Russia. In the last year and a half, more than 200 new enterprises have started on the island, tripling the number of private businesses here. Most of them are small, involving five to 10 people.

``We have practically open business activity for all types of entrepreneurs,'' says Aivar Sorm, Saaremaa's top economic official. ``People come here to start their activity, because there are no limits, in the bad sense, on their business. They do what is profitable.''

Exodus of youth halted

For Jaan Lember, the deputy mayor and former head of a fishing collective, the economic changes have saved an important island tradition - and made dining here a more pleasant experience.

With few opportunities in this sleepy island outpost, youths were leaving, villages were emptying, and the fishing industry was dying. That process has now stopped, says Mr. Lember. Fishing cooperatives are forming, with the support of local government, which provides boats, nets, and other materials.

Under the old system, the more fish the fishermen caught, the more money the state would pay them - regardless of whether the catch could be sold or processed before it rotted.

``Now,'' says Lember, ``the primary aim is to put fresh fish on islanders' tables.'' The amount of fish sold on the island has doubled, he reports. A new cooperative fish store is free to charge whatever the market will bear.

Saaremaa is developing other industries, such as dolomite quarrying (in a joint venture with Canadians), hosiery, and beer. But inevitably, any discussion of the island's economic future winds up with tourism. And the people here know they're sitting on a potential gold mine.

For example, just down the road from Kuressaare's 14th-century castle sits one of the island's few hotels, a brown clapboard house. With a little imagination - and some interior-decoration assistance from the Scandinavians - the place could be transformed into a tasteful country inn with rooms that could go for much more than the 21 rubles a night ($35) that foreign tourists currently pay.

But island leaders speak of tourism in measured tones.

``To get tourists to come here on vacation - not just for a day or two to visit `exotica' but to spend time here - we'll need to do a lot of work, spend a lot of money, make a capital investment,'' says Mr. Sorm, the economist. ``That could take five to 10 years. And by then, the tourism situation could change dramatically. We don't want tourism to be the main activity of the island. We don't want to depend on tourist income.''

Beneath this concern lies a deeper one: a desire to protect the island's special qualities, such as the nature preserve rich in plant species, and the quiet, traditional way of life. The natives are proud of their distinct accent and the island's songs and dances. Sorm, a Saaremaa native, returned to the island two years ago after 12 years on the mainland because ``there's no better place to raise kids.''

Island children learn history

Only now are the island's children starting to learn the island's history, as Moscow-dictated lessons are dropped for locally designed programs.

``The teachers themselves are studying the materials,'' says deputy mayor Lember. ``There are no printed texts yet, because of the problem with paper. So the teachers are preparing their own lessons and starting to teach.''

Historian Olav Pesti recites centuries' worth of foreign occupation, feudal intrigue, and cultural achievement: ``In the 13th century,'' begins the bespectacled Estonian, ``Saaremaa was very separate and probably the most developed part of Estonia, because it had close ties with the Swedish islands and the Vikings.''

During the Middle Ages, the island historian continues, Saaremaa was divided between two feudal states, though both sides were under the jurisdiction of the Pope. The island was also long an outpost for Estonian nobility.

The lesson ends with Saaremaa's role in World War II, highlighted by its strategic location in the Baltic Sea. In 1941, the Russians launched raids on Berlin from Saaremaa airfields. (The Soviet Union still maintains anti-air defenses on the island.) And in 1944, the last bit of Estonia the Germans were able to hang onto was Saaremaa's Sorve Peninsula - itself strategic because of its proximity to Latvia, only 40 kilometers away across the sea.

The excesses of Hitler and Stalin hit the island hard. Before World War II, Saaremaa's population peaked at 60,000 people. By the end of the 1940s, after mass escapes, the evacuation of the Sorve Peninsula, and deportations to Siberia, the population had shrunk to 33,000. Many Estonians living abroad nowadays are either from Saaremaa or descended from islanders - and some are beginning to trickle back for visits.

But not all visitors are welcome. In fact, it was the islanders themselves who insisted on keeping some restrictions on access to the island, to keep ``just anybody'' from coming here.

``Yes, they [the border guards] are a sign of Soviet power,'' says Lember. ``But as long as this power does exist, let them stand there. They don't bother us, they're polite, they immediately understand where they've landed. ... These fellows adopt our culture. They learn how to say `hello' in Estonian, `goodbye,' `thank you.'

``There was a period when they took these guys away. Anyone could come here. Immediately, there was an increase in `certain' elements here. It's a statistic.''

So far, though, the encroachment of outsiders hasn't had much effect on Saaremaa, islanders say. Down at one of the boat yards outside Kuressaare, where black-white-and-blue Estonian flags have recently replaced the Soviet hammer-and-sickle banner, two young blond fishermen shrugged when asked about any changes.

Then one of them, Veljo Heinmets, thought some more.

``Well,'' he observed drolly, ``now foreign correspondents can come and ask questions.''

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