About the Speech
Fifty years of communist rule devastated Estonia. In 1939, Estonia and Finland had similar standards of living. In 1987, Finland’s GDP per capita was $14,370, compared to Estonia’s GDP per capita of about $2,000.
• After the collapse of the Soviet Union, Estonia took advantage of a narrow window of opportunity to radically reform its economy.
• Key reforms included establishing a sound currency, balancing the budget, cutting subsidies to state-owned companies, opening the economy through property reform and privatization and by eliminating trade barriers, replacing the tax system with a simple flat tax, and establishing the rule of law.
• Estonia’s reforms have wielded the power of freedom to produce stunning results. Poverty and inequality are decreasing. Estonia has low unemployment and low inflation, and living standards are improving rapidly. The government’s budget is not only balanced, but also running a strong surplus.