Re: E-stonia success hailed by the Guardian


gricer wrote:
> TomiA wrote:
> > Estland wrote:
> > > Another fairy-tail story on the so called "E-stonia" phenomenon this
> > > time by the Guardian
> > > http://society.guardian.co.uk/e-public/story/0,,1648381,00.html
> > >
> > It's interesting that two naighbouring countiries, Estonia and Finland,
> > have recently received international praise for almost exactly opposite
> > reasons, Finland for being a welfare state and yet compatitive, Estonia
> > for econmical liberarism. Which one of the two countries has to give in,
> > will Estonia become a welfare state like Finland or does Finland have to
> > give up welfare state?
>
> Unfortunately, Estonia is always used as an 'example' of successful
> economic transition by transitologists, free market airheads, and
> assorted antlanticist neo-liberals. It was ever thus. The trail of
> hagiography of this kind goes back to Mart Laar (remember him?) who
> made a kind of cottage industry out of this kind of propaganda.
>
> The truth is much more complex, however. The real transition catalyst
> was the rapid growth of of an independent and entrepreneurial service
> sector. This would have happened anyway, irrespective of the policies
> of the administration at the time.

So zero corporate tax on reinvested profit and flat tax rate has no
effect at all?

> Why? Because of Estonia's strategic
> position - its closeness to Finland and its function as a transit
> economy, serving Russia and the CIS.

How is that possible, given that Russia has imposed double tariffs upon
Estonian goods and services until very recently?

>
> There was no real free-market transition strategy. Decisions, such as
> the introduction of the kroon and several privatisations, were taken in
> response to events, not as part of some master plan.

So you reckon that Estonia would have remained with the Ruble, except
for some event forcing their hand?

>
> This is not to disparage what has been achieved. Far from it! But one
> must look at areas of the economy where there is still no coherent
> development strategy, and realise that one cannot persist in quoting
> these free-market myths for ever....

Looks like the Russia and Eastern Europe was duped by this Estonian
myth, introducing their own flat rate tax. Gullible people.

Regards,
Martin

.

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