Located in Eastern Europe and borders the Baltic Sea and Gulf of Finland, in between Latvia and Russia. Capital: Tallinn
BACKGROUND History • Previously ruled by Danish, Swedish, German, and Russian governments, but finally free to govern itself in 1994Religion • Estonians are considered the most non-religious people in the 25- member EU, according to the Eurobarometer Poll 2005Demographics • Population:1.3 million (July 2010) 67.5% of the population is between15-64 years • Literacy Rate: 99.8% • Urban Population: 73% • Rising middle-class in the last five years- the number of Estonians who have minimum purchasing power continues to fall
ECONOMIC ENVIRONMENTPPP-based GDP •$24.53 billion; ranked 114 compared to other countriesImports • Primary commodities: machinery and electrical equipment, mineral fuels, chemical products, foodstuffs 6%, plastics, and textiles •Total Imports: $10 billion (2009) Fast-growing GDP • 2000–2008: GDP grew at 7% per year Placed Estonia among the three countries in the EU with the fastest growing real GDP Estonia took a big jump in the improvement of average standard of living •In 2010, the annual GDP grew by 3.1% compared to the previous year.
ECONOMIC FREEDOM Estonia is considered one of the most liberal economies in the worldThe Wall Street Journal and Heritage Foundations Index of EconomicFreedom 2011 ranks Estonia 14th out of 183 countries.Economic Freedom of the World 2010 ranks Estonia12th out of 141countriesHeritage Foundation’s Economic Freedom Index ranks Estonia 16thIn the late1990s, Estonias trade regime was so liberal that adoption ofEU and WTO standards actually forced Estonia to impose tariffs in certainsectors which had previously been tariff-free (i.e. agriculture)
COMMERCIALINFRASTRUCTURE Estonia is noted for its advanced use of information technology, whichdemonstrates its commitment to global competitiveness- 76% of thepopulation are Internet usersEstonia considered to be the leader in Eastern Europe for broadbandDSL access. In terms of DSL penetration per telephone line, Estoniapresently ranks among the top ten in the world
THE ESTONIAN CONSUMER In 2000 Estonia had an upper-income class of about 10,000 and agrowing middle-class numbering about 60,000- fueling domestic retaildemand; this number has seen tremendous growth in the last five yearsas quality of life continues to improveEstonians are characterized by economic growth and high consumerconfidence, which has contributed to the consumer goods boom
FEW BARRIERS TO ENTRY Few political, policy or economic risks or barriers exist Estonia began to adopt free-market policies even before it declaredindependence Government sets privatization as a priorityAn integral part of Estonias transition to a market economy during the early1990s involved reorienting foreign trade to the West and attracting FDI inorder to improve the countrys industry and commerce. Today foreign companies dominate in several sectors of the Estonianeconomy. Banking and telecommunications are dominated by the Nordicplayers, but the food and electronics industries also rely heavily on foreigncapital.In 1999, Estonia joined the World Trade OrganizationIn 2004, Estonia became a NATO member state as well as an EU member
DISTRIBUTION CHANNELS Estonias open economy, excellent transportation links and central location make it an ideal base for production and distributionIts location is a crossroads of East and West. •Estonia lies just south of Finland and across the Baltic Sea from Sweden, both EU members and to the east are the huge potential markets of northwest Russia.Estonia possesses modern transportation and communication links: •Captures a considerable share of the rapidly growing transit trade through the Baltic Sea. •Passenger and freight links provide fast sea crossings across the Baltic Sea •Direct air connections to Tallinn give easy access to major European capitals.
RECOMMENDATION Yes, enter the Estonian beverage market! RISING middle class population Hospitable environment for foreign investmentCentral location and excellent transportation and distribution linksLittle state-owned enterprise competition; privatization placed as apriorityMember state of the WTO, EU, and NATO
WORKS CITEDhttp://estonia.eu/http://www.state.gov/r/pa/ei/bgn/5377.htmhttp://www.bbn.ee/?PublicationId=c30a8977-9687-4267-b963-13879470689chttp://globaledge.msu.edu/resourcedesk/mpi/http://blog.timesunion.com/scrimshaw/files/2009/07/estonia-song-festival-people1.jpgCIA World FactbookStatistics of Estonia, 2010