The Story of Estonia

[HenryTo]

A Country Brief from the World Bank:

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ECAEXT/ESTONIAEXTN/0,,menuPK:301083~pagePK:141132~piPK:141107~theSitePK:301074,00.html

Estonia, with its limited natural resources, has been able to do well in a transition to a market economy. Of course, there are always consequences - including a decline in its agricultural sector (they have no subsidies to speak of) and a relatively high unemployment rate of slightly over 10% (although not high compared to France or Germany) due to a mismatch of skills for workers in traditional industries who are having difficulty in finding jobs in the new services and high-tech sectors.

Simmons & Company (http://www.simmonsco-intl.com/ - a local investment bank here in Houston that specializes in the energy sector) had previously talked about the "oil curse" where countries endowed with huge natural resources, in general, have historically, ultimately, done poorly economically.

Thomas Friedman, in his latest book "The World is Flat" acknowledges the same issue - in that he said the most successful economies of the 21st century will be the economies without natural resources. There are no detailed explanations but one very plausible explanation has been that in a country with no natural resources, kids grow up knowing that there is no "free ride" and that everyone will have to work hard in order to survive economically when they get older. That has been the mentality of the Japanese and the Taiwanese (and now the Chinese and Indians), and now to an extent, the Eastern Europeans as well. Moreover, in a country where people have grown up relatively poor to the rest of the world, they are now hungry - and very much so.

[rffrydr]

A happy ending via euro beginning:

http://www.businessweek.com/magazine/why-estonia-loves-the-euro-02022012.html

Looks like it wasn't the natural resources as much as iit was the fear of devaluation...and more devaluation after that. Why?--because it's Estonia!
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Estonia upgraded:

http://www.easybourse.com/bourse/actualite/fitch-upgrades-estonia-s-bbb-rating-outlook-to-stable-US3453708600-794831


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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Bill,

FYI, the BLS has created an apples-to-apples unemployment rate comparison page for nine selected countries. The unemployment is obtained using (to the greatest extent possible) U.S. concepts:

ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/flsjec.txt

Best,

Henry

[nodoodahs]

Does anyone know if European countries "game" the unemployment numbers the same way the U.S. does?

For instance, a change in how the U.S. considers those "discouraged workers" created a permanent lowering in the U.S. "unemployment rate" during the Clinton admin's second term.

If we can't confirm the calculations for U.S. and Europe are apples to apples, perhaps it would be better to do our own calculation, something on the order of:

total number of workers employed + total number of military /
total number of persons of working age (16-70?)
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[navision]

the same in all the baltics - also in latvia and lithuania.

talking about the stock market growth, the yearly increase in average 40-50percent
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