The United States and Estonia: Partners for Peace and Prosperity
In August, Estonia marked 25 years since the end of Soviet occupation and the restoration of its national institutions. Estonia’s rapid reintegration with the West as a sovereign, stable, and prosperous democracy is nothing short of remarkable, and it serves as an inspiration to other nations. Theirs is a journey made possible through disciplined leadership, solid regulatory frameworks, strategic decisions, and a steadfast commitment to being a contributing member of European, transatlantic, and international alliances. Our partnership is one of allies with synchronized goals and values, a rare combination that gives both countries leverage to do even more.
The Welles Declaration of 1940 established a 50-year policy of non-recognition of the Soviet annexation of the Baltic States, enabling Estonia to maintain a continuous diplomatic mission in Washington during the occupation. Today, our governments share a deep and enduring relationship that spans the realms of defense and security, education, trade, and science and technology engagement. The support and nurturing of a Transatlantic Community of strong, free, prosperous democracies is one of the greatest triumphs of American foreign policy over the last 70 years. For me personally, it has been a tremendous privilege to serve as an American diplomat through these historic times, and to have dedicated my professional life to the cause of helping build a Europe that is whole, free and at peace.
During my first tour as a newly minted Foreign Service Officer in the German Democratic Republic, I had the honor of supporting President Reagan’s visit to West Berlin in 1987, when he called on Soviet President Gorbachev to “tear down this wall.” Coming full circle, nearly two years ago while serving as Deputy Chief of Mission in Berlin, I was honored to celebrate the 25th anniversary of the fall of that Berlin Wall.
Estonians joined with their Baltic neighbors in 1989 to form a peaceful human wall of citizens linking arms, not long before the physical wall dividing Europe came down. The Baltic Way, a human chain united through song, demonstrated the countries’ unyielding quest for freedom. In the quarter century that followed the recovery of its independence, Estonia has continued to stand for the values of freedom and self-determination, and the United States is proud to have this small but strong nation as our ally and friend.
Fostering Shared Security
Estonia has prioritized membership in multilateral institutions, including the European Union (EU) and the North Atlantic Treaty Organization (NATO) as a pillar of its security and defense policy. Estonia is a model ally, spending over the NATO target of two percent of gross domestic product on defense, one of only four NATO nations to do so consistently. Despite an active duty military force of fewer than 3,500 troops, Estonia is a security provider to overseas missions and meets NATO’s “Istanbul Criteria” to have ten percent of its approximately 3,000 available forces deployed or prepared for deployment. Whether in Afghanistan, Mali, Ukraine, or Iraq, Estonia demonstrates its unwavering commitment to a better world by standing side by side with the United States and our allies and partners to promote international peace and security.
President Obama visited Tallinn on September 3, 2014, to recognize Estonia’s contribution to the NATO alliance and to reassure all of the Baltic states of US and NATO solidarity in the face of the increased threat from Russia. As the President eloquently said, “In this Alliance, there are no old members or new members, no junior partners or senior partners—there are just Allies, pure and simple…the defense of Tallinn and Riga and Vilnius is just as important as the defense of Berlin and Paris and London.” More than 6,000 US soldiers, sailors, and airmen have rotated through Estonia since 2014, training together with their Estonian counterparts to increase NATO readiness and interoperability, and European Reassurance Initiative funds have resulted in significant improvements to national military infrastructure.
Unleashing a Market Economy
In many ways, our cooperation to ensure Estonia’s security underpins our ability to collaborate in fostering economic growth and prosperity. Estonia undertook key strategic decisions after regaining independence in 1991 that set it on an accelerated path to a dynamic economy. Estonia launched its transition to a market-based economy and emerged as a high-income country only 15 years later. Inspired by the ideas of Milton Friedman, Estonia’s first elected Prime Minister after independence, Mart Laar removed price controls, abolished tariffs and subsidies, launched the privatization of state-owned enterprises, instituted a flat-rate tax system, and slashed business regulations. Successive governments have shared this allegiance to a balanced state budget and commitment to open markets, factors that have underpinned Estonia’s swift economic success. Estonia acceded to the World Trade Organization in 1999, to the OECD in 2010, and joined the European Monetary Union in 2011.
Today, Estonia is broadly recognized for its free and open economy, a business-friendly environment, and high levels of transparency. Estonia ranks ninth on the 2016 Wall Street Journal/Heritage Foundation Index of Economic Freedom, 16th on the World Bank’s current Doing Business Report, and 23rd on Transparency International’s Corruption Perceptions Index. Estonia boasts the lowest debt-to-GDP ratio in the European Union and one of the lowest unemployment rates in the Euro area. The government’s commitment to fiscal discipline aided the country’s return to growth following a severe economic downturn during Europe’s financial crisis.
In line with the Estonian government’s long-standing support for open markets, it has shared the US ambition for a comprehensive Transatlantic Trade and Investment Partnership (T-TIP) agreement, which will strengthen an already-dynamic US-EU trade relationship and reduce barriers for smaller enterprises to take part in trade. Two-way trade between the United States and Estonia reached $790 million last year, and I’m confident this number can increase significantly with the help of T-TIP.
The Digital Trendsetter
For many in the high-tech community, Estonia is something of a legend, known as the birthplace of Skype, the home of the most start-ups per capita in Europe, and an entrepreneurial country with a seemingly endless supply of innovative ideas. While manufacturing still tops the list of economic activity in this diversified economy, information technology also plays an important role.
A newly independent Estonia used information and communication technology (ICT) as a means to “leapfrog decades of backwardness caused by Soviet rule,” in the words of President Toomas Hendrik Ilves, and it was also a way to minimize costs for a new government with limited resources and no legacy systems. Today both the public and private sectors rely on digital services in their most up-to-date forms. Estonia is world-renowned for its comprehensive and cutting-edge e-governance systems, which allow entrepreneurs to register a new business online in 18 minutes and support three-minute electronic tax filing, online voting, and e-prescriptions, among other services.
The early integration of technology into schools, as well as successful models of Estonian-born firms like Skype, has inspired a generation of entrepreneurs. Information technology has not only contributed to Estonia’s economic development, but it has thwarted corruption by fostering transparent service delivery. And it saves money, too: the government estimates it saves two percent of GDP through the use of digital signatures alone.
Today, Estonia has forged a role as an international e-governance advisor, sharing its e-governance and cybersecurity best practices in support of transparency and good governance in places like Tunisia, Moldova, and Ukraine, in some cases with US government co-funding. All told, Estonia has trained officials from more than 50 countries on Estonian e-solutions for voting, health care, customs, and other applications. Earlier this year, President Ilves was in Washington to launch the World Bank’s new Global Development Report on Digital Dividends. This report pointed to Estonia as a country that has figured out the right way to deploy technology to promote development and good governance. Access to the Internet and technology is not sufficient; strong education and regulatory systems must provide the foundation.
Estonia has also become the first country to offer foreigners benefits of “virtual” residency. The e-residency program enables non-Estonians to receive a digital identity and have access to some of the country’s e-services, including the ability to register and operate an EU-based business. Since its launch two years ago, the program has attracted nearly 13,000 virtual residents from 131 countries and has spurred the creation of 850 new businesses. This program has helped build global awareness of Estonia’s leadership in developing innovative technology applications for public sector administration. Leaders also hope that it fosters greater entrepreneurship at home and abroad, and that it can help expand Estonia’s economy and workforce. I’m proud to have become one of the newest e-residents just a few weeks ago!
Estonia responded to its experience as the target of the first large-scale cyber-attack on a country in 2007 with cybersecurity efforts to protect its impressive e-governance infrastructure, and today is recognized as a world leader and major US partner in cyber policy and engagement. Estonia’s second national cybersecurity strategy will be in effect until 2017 and puts emphasis on guaranteeing vital services, combating cybercrime more effectively, advancing national defense capabilities, and creating a cybersecurity industry in Estonia. Our two countries enjoy robust civilian and military cooperation based on the 2013 US-Estonia Cyber Partnership Statement, including the exchange of cyber threat information, joint training and exercise participation, and cyber capacity building initiatives in developing countries.
Our connection with Estonia is further strengthened through the strong educational ties with the United States. Beyond the many students and scholars who participate in private exchanges every year, we also have an active Fulbright program. Since its inception, the Fulbright program has supported study in the United States for nearly 200 Estonians. Perhaps the most notable of the many alumni is former Foreign Minister Marina Kaljurand, who has said of her time studying international law on a Fulbright scholarship that it was “one of the most positive experiences of [her] life.”
Europe’s migration crisis, the United Kingdom’s decision to leave the European Union, and other events are sure to bring about new challenges and changes in the region over the coming decades. Estonia and the United States share the vision of a stable, peaceful, and prosperous Europe, and I’m confident our strong partnership will continue.
United States Ambassador to Estonia