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Vol 3, No 5
5 February 2001
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News from

All the important news
since 26 January 2001

Kristin Marmei


Railway privatization stumbles

The Estonian Privatization Agency and the Transport and Communications Ministry are still hoping to stick to their present schedule, according to which talks over the privatization of Eesti Raudtee (Estonian Railways) with RailEstonia must be concluded by 28 February. They hope to do so in spite of the key investor in the deal declaring it is not committed.

The financing scheme presented by RailEstonia last week featured Union Pacific, the biggest rail and logistics firm in North America, as one of its strategic investors. On Tuesday, John Bromley from Union Pacific's Public Affairs disputed RailEstonia's claim, saying, "We did receive an inquiry about providing technology and possibly locomotives from an investor who is interested in the Estonia railway privatization. However, Union Pacific has not committed to any investment or business arrangement."

The Transport and Communications Ministry has confirmed that the former privatization schedule is still in force, as RailEstonia has not applied for an extension of the 28 February deadline. However, the privatization process will inevitably lengthen, as the conclusion of the privatization contract is suspended until the court's judgment in the protest filed by Raudtee Erastamise Rahva AS (RER, Railway Privatization People's Ltd) is received. The first hearing of the RER complaint will be held on 14 March.


New Ground Forces chief

On Tuesday, President Lennart Meri endorsed the appointment of Lieutenant General Johannes Kert as the commander of the Ground Forces and discussed with military leaders the preparations needed for integrating the Estonian Defense Forces into NATO.

In the President's words, Estonia is not expected to have a big army, but it must be professional and capable of fulfilling tasks of international importance, as well as those necessary for the preservation of the state. The President said the defense forces must not stay separate from the country's goals and must remain independent of the day-to-day politics.


Busting drug dealers

A joint squad of Estonian and Finnish drug police, FinEst, has busted an international gang that, for years, ran the drug and prostitution business between Tallinn and Helsinki, smuggling large quantities of narcotics, as well as tens of thousands of counterfeit US dollar bills across the borders.

A wave of arrests in Tallinn, Helsinki and Stockholm that began last August has put about a dozen people behind bars—from bosses of the gang to simple errand boys. Police have seized about 100 kilos of drugs, large quantities of counterfeit money, forged documents and contraband tobacco and alcohol. Although the list of seized goods is varied, the gang's chief line of operation was directing the drug businesses in Estonia, Finland and Sweden.

Another record amount of drugs was seized last week from Estonian businessman and pub owner Raoul Pajuviidik, who is manager and coach of the Estonian Olympic Wrestling Team. In Pajuviidik's car, police found approximately two kilos of amphetamines and 2000 Ecstasy tablets.


Elcoteq stays

Elcoteq, a Finnish electronics industry subcontractor that has a manufacturing plant in Tallinn and plans to open another, announced on Wednesday that its cooperation with Ericsson—its major contractor—will continue, but the emphasis will shift from mobile phones to mobile systems.

Last Friday, owing to Ericsson's decision to turn production of mobile telephones over to Flextronics International, Elcoteq too will stop making Ericsson telephones in the first half of this year. Elcoteq made Ericsson's mobile phone handsets in factories in Estonia and Hungary.

Elcoteq still plans to open another factory in Tallinn, but will likely postpone it for six months. Elcoteq will also layoff about 600 people from its Tallinn plant—mostly those who have fixed-term contracts—reducing the number of workers in Tallinn to 2600. Elcoteq will announce its further plans later in February.


More is better

Private consumption grew by 13.3 percent in Q3 of 2000, the fastest in Estonian history, according to the Bank of Estonia. The GDP also increased by seven percent year-on-year in Q3.

147,446 new mobile phones were sold in Estonia in 2000, up 65 percent from 1999. Two Nokia models, 3210 and 5110, made up nearly half of the total sales. Besides Nokia, other popular brands were Motorola, Ericsson, Siemens and Alcatel.

According to the Estonian Leasing Companies' Union, the sale of new leasing deals increased by 41 percent in 2000, with EEK (Estonian kroons) 4.569 million (about USD 271 million) worth of new contracts concluded by leasing firms.


And in other news...

  • The Foreign Ministry this year plans to fill about half of the vacant ambassadorial posts and probably also replace ambassadors who have been holding their jobs since 1997. The goal is to have Estonia represented on the ambassadorial level in member states and candidate countries of both the EU and NATO. Some Estonian embassies have long been working without a resident ambassador; for example, Ireland, Portugal, the Netherlands, Czech Republic, Hungary, Greece and China.
  • On Wednesday, circuit court judge and Chairman of the Estonian Association of Judges, Allar Jõks, accepted President Lennart Meri's proposal to be considered for the post of legal chancellor. The President will start consultations with political parties represented in the parliament in order to present Jõks as an official candidate to the legislature. Jõks is the President's fourth choice for legal chancellor, as earlier choices either failed a parliamentary confirmation or withdrew their candidacies; the position has been vacant since last summer.
  • According to Housing Conditions, a publication of the Statistics Office, 84 percent of Estonian families live in an apartment or house of their own. Apartments make up to 72 percent of all housing units. An average household has two rooms of 31.7 square meters of floor space per member of the household.

Kristin Marmei, 2 February 2001

Moving on:


Baltic News Service (BNS)
Eesti Päevaleht
SL Õhtuleht


Gusztáv Kosztolányi
Anatomy of a Disaster

Mel Huang
Privatising the Baltics

Jan Čulík
Myths and Politics

Bernhard Seliger
Unemployment in East Germany

Sam Vaknin
The Scourge of Transition

Eva Sobotka
Dzurinda's Mission

Slavko Živanov
Going Down Together

Andrew James Horton
Balabanov's Nationalism

Juras T Ryfa
Forms of Hope

Mel Huang
Vytautas Landsbergis's autobiography

Štěpán Kotrba NEW!
Sow and Reap

Brian J Požun
Shedding the Balkan Skin

Martin D Brown
Czech Historical Amnesia

Dejan Anastasijević (ed)
Out of Time

Gusztáv Kosztolányi
Hungarian Oil Scandal

Sam Vaknin
After the Rain

Press Reviews:
Andrea Mrozek
Gain and Loss

Oliver Craske
UK: Not Such a Soft Touch, Sadly


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