Introduction to the Baltics Gjvik, 17' February 2006

1
Introduction to the BalticsGjøvik, 17. February
2006

• Madis Rausi
• Innovation Norway, Tallinn
• madis.rausi_at_invanor.no

2
Baltic States

• Estonia
• Latvia
• Lithuania

Norway
3
Baltics some facts

• Independent countries between 1918-1940
• Occupied and parts of Sovjet Union until 1991
• Regained independence in 1991
• Membership in the EU 2004
• Membership in NATO 2004

4
High growth in the Baltic States
2001 2002 2003 2004 2005 Estonia 6.5 7.2
6.7 7.8 9.0 Latvia 7.9 6.4 7.5 8.5 8.8 Lithuan
ia 6.4 6.8 9.7 6.7 6.8 Norway 2.7 1.1 0.4 2.9
3.1 Sweden 1.2 2.0 1.6 3.0 2.8
Forecast Source OECD, National Statistics,
Hansabank Markets
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The Baltic market

• Combined population of 7.1 million people
• GDP growth rates of 7-9 per year
• Combined imports of NOK 181 billion in 2004
• Estonia NOK 55.5 billion
• Latvia NOK 44.1 billion
• Lithuania NOK 81.3 billion
• Lower entry barriers and weaker competition than
  on more established markets
• High degree of pan-Baltic business integration
  (find a partners with pan-Baltic operations)
• Trade between Norway and the Baltic countries ca
  NOK 6 bln

Source National statistics Exchange
rateNOK/EEK1.9
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The Baltic countries - 3 in 1?

• Common history
• Geographical closeness
• Similar industrial background
• Extensive business integration
• ...and yet, these are 3 different countries with
• Different languages
• Differences in business cultures and mentalities
• Differencies consumer tastes

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Estonia at a Glance
Population Area Language Currency GDP GDP
growth
1.36 million 45,000 km² Estonian EUR 1 EEK
15.65 10.2 billion (2005) 7300 per capita
(2005) 9.0 (2005)
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Enormous changes since 1991

• In 1991
• Closed society in the Sovjet Union, extremely
  difficult to travel outside the country
• 90 of exports to the east
• What happened
• Transformation to the market economy and to new
  export markets
• Completely new legislation to be written and
  passed
• Own state to be created from scratch army,
  boarder guard, embassies,
• In 2004
• Membership in the EU and NATO
• ...ca 80 of our exports go to the EU-markets
• ...mobile phone, Internet and other IT use on
  European levels

9
Taxes in Estonia
Unemployment insurance 0.3 (employer)
0.6 (employee) No corporate income tax on
reinvested earnings
Source Enterprise Estonia
10
Trade between Norway and Estonia in million NOK,
1992-2005
Total trade volume in 2005 over NOK 2.3 billion
Source Statistics Norway
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Norwegian companies in Estonia
Stock of Norwegian investments NOK 1.8 bln (Sept.
2005)
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Thank you and welcome to Estonia !