When Will Estonia Catch Up to Finland’s Standard of Living?
Introduction
Estonia, being a part of the European Union, has the potential to catch up to the standard of living in Finland, a close neighbor. However, several factors, including economic trends and political decisions, will significantly influence this process.
Economic Growth and Challenges
Since joining the European Union, Estonia's economic growth has slowed down slightly. This is not a unique situation as many countries face similar challenges. The Global Financial Crisis (GFC) and the pandemic have further impacted economic progress. Nonetheless, Finland has also been affected by these global events, indicating that Estonia's delays in economic progress are not solely due to its EU membership.
Comparing GDP Per Capita
The GDP per capita in Finland is approximately twice that of Estonia. This statistic is crucial when considering the economic gap between the two countries. While the Finnish economy has demonstrated robust growth, Estonia's pace has been slower, leading to a significant disparity in economic standards.
The Impact of Political Stance and Policies
The political climate plays a significant role in achieving a higher standard of living. In Finland, there is a perceived sense of complacency among politicians, who often make compromises rather than taking bold decisions. This can hinder the pace of economic advancement.
In contrast, Estonia's political landscape is more dynamic. Due to the completeness of the public sector, high taxes, and cumbersome administrative procedures, Estonia has room to improve. Additionally, the rigid car tax and expensive housing market present significant obstacles.
Case Study: Software Development and Efficiency
A notable example illustrating Estonia's efficiency is in the software development sector. A friend of the author works for a software development company, where he often complains about a company receiving all the significant contracts. This is because they are tailored to meet specific requirements, making it difficult for other companies to compete.
Compared to this, Estonia's software developers can develop better online systems at a fraction of the cost. For instance, a project that cost 2 billion euros in another country was effectively implemented for only 8 million euros. This showcases Estonia's potential for innovation and efficiency.
The Future Outlook
Estonia has made considerable progress and currently has the opportunity to catch up to Finland's standard of living. The key will be the commitment of politicians to implement bold decisions and efficient policies. If Estonia maintains its current trajectory, there is reason to believe it will achieve a higher standard of living in the not-too-distant future.
The challenge for Estonia lies in overcoming administrative barriers and streamline processes while ensuring economic efficiency. By doing so, Estonia can close the gap with Finland and achieve a higher standard of living.
Stay tuned for updates on Estonia's progress as it aim to catch up with Finland's standard of living.