Economy of Estonia
Channel: 宇宙のすべての知識 プリンシピア
Date: 2019-02-03

Economy of Estonia, by Wikipedia https://en.wikipedia.org/wiki?curid=9391 / CC BY SA 3.0

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Economy of Estonia

Estonian economy is an advanced economy and a member of the European Union and of the eurozone. The Estonian economy is heavily influenced by developments in the Finnish and Swedish economies.

Before the Second World War, Estonia's economy was based on agriculture, but there was a significant knowledge sector, with the university city of Tartu known for scientific contributions, and a growing industrial sector, similar to that of neighbouring Finland. Products such as butter, milk and cheese were widely known on the western European markets. The main markets were Germany and the United Kingdom, and only 3% of all commerce was with the neighbouring USSR.

The USSR's annexation of Estonia in 1940 and the ensuing Nazi and Soviet destruction during World War II crippled the Estonian economy. Post-war Sovietization of life continued with the integration of Estonia's economy and industry into the USSR's centrally planned structure. Before the war, Estonia and Finland had a relatively similar standard of living. Estonia's 1990 per capita GDP was $10,733 compared to $26,100 for Finland.

After Estonia moved away from Communism in the late 1980s and became an independent capitalist economy in 1991, it emerged as a pioneer of the global economy. In 1994, it became one of the first countries in the world to adopt a flat tax, with a uniform rate of 26% regardless of personal income. Between 2005 and 2008, the personal income tax rate was reduced from 26% to 21% in several steps. Estonia received more foreign investment per capita in the second half of the 1990s than any other country in Central and Eastern Europe.

The country has been quickly catching up with the EU-15; its GDP per capita having grown from 34.8% of the EU-1...