Estonia is ranked second out of 129 countries in the global transformation index, a ranking compiled by the Bertelsmann Stiftung to measure each country’s performance in terms of political and economic transformation.
According to the index, Estonia has largely recovered from the economic recession of 2008 and 2009. “This recovery was aided by the innovativeness and efficiency of both the public and private sectors,” the German foundation says. “Foreign investors have remained attracted to Estonia due to its openness, streamlined government, strong rule of law and business-friendly environment.”
A stable political system
The country’s economic output has increased despite sluggish growth in the European Union. “The government’s financial position continues to be favorable, thanks to the lowest public debt in the European Union. Yet, there are challenges linked to its small size and the openness of its economy. Economic growth is dependent on the inflow of foreign investment and external demand, both of which have been weak since the recession. Continued economic stagnation and political turbulence in the European Union and beyond as well as an increasingly aggressive Russia remain substantial risks.”
The index also notes that the Estonian political system has remained stable over the last decade, and asserts that since 2012, there have been signs that the “civil society is becoming more politically active”. On the other hand, the “fact that civil society has become more vocal does not necessarily mean that it is particularly influential or effective, especially given the still low overall levels of civic participation. Often, interest groups focus on lobbying the president to veto legislation, due to a perception that the government – and by extension, the parliament – is not engaged in genuine consultations with civil society.”
No change in interethnic relations
Bertelsmann also points out that interethnic relations between the ethnic Estonian majority and Russian-speaking minority have not significantly improved over the last decade.
The best country by its transformative performance, according to the Bertelsmann Stiftung, is the Czech Republic. Taiwan comes third, after Estonia, and Lithuania is ranked fourth. Latvia comes eight and Russia 70th.
The Bertelsmann Stiftung is an independent foundation that promotes “reform processes” and “the principles of entrepreneurial activity” to build a “future-oriented society”. The foundation’s transformation index measures developing and transitional countries’ performance in terms of political and economic transformation. The index places political decision-makers’ “steering capability at the heart of its analysis and, as a result, is the only index in the world that measures and compares the quality of governance with self-collected data”, the foundation said.
Cover: A city centre in Tallinn, the Estonian capital (the image is illustrative).