From obscurity to success story, Estonia has lessons for smaller nations

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View from Toompea hill, illustrating Tallinn's mix of ancient and contemporary architecture - Photograph: Diego Delso [CC BY-SA 3.0 via Wikimedia Commons]

Size should never be a deterrent for any country in moving forward successfully, observes Benedict Lopez.

Estonia, one of three Baltic states and among Europe’s smallest countries, regained its independence in 1991 after the collapse of the Soviet Union.

At the time of liberation, Estonia was in the doldrums. Fewer than half its population had a telephone line. Connectivity with the outside world was through a Finnish mobile phone hidden in the foreign minister’s garden.

On the verge of bankruptcy at the time of independence, Estonia had to start from scratch. The country faced a mammoth task in dismantling its protracted legacy of Soviet rule with shabby infrastructure.

With few natural resources and a population of just 1.3m, Estonia had to find a way forward with only its human capital at its disposal. It had to reinvent itself for its survival.

When I visited Estonia a few years ago, I knew that the country was a magnet for tourists with its historical centre, museums, medieval castles, pristine natural environment and picturesque coastal and village landscape. Little did I realise it was also an information and communications technology powerhouse.

Estonia today ranks ninth in the Digital Economy and Society Index (DESI 2017). It leads other European countries in the online provision of public services, scoring above the EU average in digital skills and the use of the internet by citizens.

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Estonia has among the fastest broadband speeds in the world. It also has a high rate of start-ups per person, which has catapulted the country to the forefront of the global ICT arena. The key challenge for Estonia is the digitisation of companies.

Estonians can now pay for parking using their mobile phones. Digital cloud services are used to store the health statistics of the people. Income tax submissions can now be made online and around 95% of Estonians use this facility.

In 1992, a year after its independence, Estonia earmarked the ICT sector as the main thrust for its economic development. It was the brainchild of Mart Laar, Estonia’s then prime minister, who initiated the recovery of the country’s stagnant economy.

Pro-business policies were implemented by the government to spur economic activity, which among other measures included introducing a uniform income tax structure, promoting free trade, privatising a range of state-run companies and cutting the red tape in setting up new companies.

Estonia turned down Finland’s offer of its old analogue telephone system when the latter decided to switch to a new digital system. National pride and self-respect got the better of Estonians, and they built their own digital system. Likewise, when the country had no land registry, they developed a paperless one.

Estonia developed its economy focusing on the development of ICT to build an e-society. Today, the country is a world leader in technology and is regarded as the Silicon Valley of Europe.

With technology-minded ministers, Estonia focused on the development of the internet during the boom era of the 1990s. It embarked on a nationwide project to provide classrooms with computers. By 1998, all schools were online.

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Passion for the internet runs deep among Estonians. A bold and radical measure was adopted by the Estonian government in 2000, when it acknowledged that internet access is a human right. With this recognition, internet access spread all over the country. Malaysia should also follow suit and ensure all Malaysians have access to the internet.

In line with the internet drive, free wi-fi became a norm for all Estonians and with e-government, a paperless administration substituted archaic ways previously used. Rubber stamps, carbon paper, pens, pencils and long queues became a thing of the past.

Estonia also drew up the code for the popular online call system Skype and the file-sharing Kazaa network application. It was also the first to allow online voting in a general election. Hopefully, we in Malaysia can emulate Estonia in this way in our future general elections with our younger generation being ICT savvy.

The sale of Skype to Microsoft in 2011 for US$8.5bn created a new breed of Estonian investors. These tech czars used their experience and newly found wealth for productive purposes.

In the capital Tallinn, varied tech firms are grouped in the Tehnopol hub. With the constraints of a small domestic market, the country’s start-up companies have been coerced to become globally oriented.

Education assumed a pivotal role in Estonia’s ICT success. ProgeTiiger (Programming Tiger), a curriculum mooted out of a public-private sector partnership, makes it possible for even young children to acquire knowledge about the rudiments of coding.

During the 1980s, many schoolchildren yearned to be entertainers like rock stars, but today they dream of becoming entrepreneurs. The success of the ICT sector has indeed revolutionised the mindset of Estonian schoolchildren.

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In just over three decades, Estonia has bounced from a sluggish backwater to a thriving ICT hub. The country’s transformation can be attributed to the zeal of its people to succeed. True grit enabled the Estonians to weather the storm and make remarkable strides.

Small Estonia is a beacon of hope for other less known countries: size should never be a deterrent for any country in moving forward successfully. Estonia has proven to the world that all a country needs to do to succeed is to discard historical baggage, adopt a pragmatic approach and start afresh. No country should wallow in self-pity and blame others for its predicament.

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Benedict Lopez

Benedict Lopez was director of the Malaysian Investment Development Authority in Stockholm and economics counsellor at the Malaysian embassy there in 2010-2014. During the course of his work, he covered all five Nordic countries. An eternal optimist, he believes Malaysia can provide its citizens with the same benefits and privileges found in the Nordic countries – not a far-fetched dream but one that he hopes will be realised in his lifetime.

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