The Estonian Foreign Investors’ Council warns against destroying Estonia’s current attractiveness

At the end of September, the Estonian Ministry of Economic Affairs and Communications submitted a draft Communications Network Act for public approval – a draft which, in the opinion of the Estonian Foreign Investors Council, does substantial harm to the local investment environment.

Heikki Mäki, the chairman of the management board of the council, said the draft introduced into Estonian legal space a principle that will give state officials the right to force companies to write off investments on a non-transparent basis, without substantive analysis and with no advance warning.

“All of this will leave people feeling that investing in Estonia is no longer safe,” Mäki said in a statement. “All the more so if we’re talking about large-scale investments with a big social impact, which often taken more than a decade to pay for themselves.”

Estonia’s image among foreign investors could be fatally undermined

According to the council, hundreds of millions of euros make their way into Estonia every year through direct foreign investment, creating thousands of jobs. “Compared with neighbouring countries and more broadly, Estonia boasts an economic environment that is both competitive and attractive, since both the state and its laws are considered stable and reliable for their transparency and predictability. This is reflected in the country’s placing in the international ‘Doing Business’ report, which ranks Estonia 18th in the world”.

Mäki is concerned that all of this could be fatally undermined. “What’s deeply worrying to me is that a state official has made a public promise that regulating communications is only the first step and that the plan is to extend the principle more broadly throughout the economy,” he said, referring to an article published in the Eesti Päevaleht newspaper on 13 October. “We’re talking the energy sector, public services, health care and more – just about every aspect of life. Wanting to make wide-ranging decisions that are in no way transparent ‘in citizens’ own interests” is an Orwellian ambition that should concern everyone, especially given Estonia’s history.”

Heikki Mäki. Photo: Private collection.

Mäki added that, among other things, the “Estonia 2035” development strategy submitted to the Estonian parliament, Riigikogu, by the government recently sets out the objective of being an attractive target country for foreign investment. “That serves as some reassurance that the state hasn’t abandoned its principles of ensuring the legality and transparency of the economic environment,” he remarked. “But it’s important to recognise such changes and put a stop to them.”

Asking the government to analyse the broader impact of the draft act

Mäki said the Foreign Investors’ Council in Estonia would be asking the government to analyse the broader impact of the draft act and to guarantee that objectives are met without sacrificing the attractiveness of the country’s economy for future investment or the economic growth and well-being that stem from such investments. “After all,” he said, “the road to hell is paved with good intentions.”

The Foreign Investors’ Council in Estonia represents almost 80% of all direct investments made into the country. The priority of its supervisory board is to represent the interests and concerns of foreign investors in Estonia. The members of the council’s new management board are Heikki Mäki (the Finnish-Estonian Chamber of Commerce), David Bailey-Lauring (the British-Estonian Chamber of Commerce), Jeroen van der Hoeven (the Holland Business Club) and Peter Thomsen (the Danish-Estonian Chamber of Commerce).

Cover: Tallinn’s Maakri Quarter business district. The image is illustrative. Photo by Rasmus Jurkatam.

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