Today, the President's Academic Council convened for the year's last meeting to discuss the future of Estonian economy, or what Estonia has to learn from the experience of Finland. Presentations were made by Aatto Prihti, Chairman of the Finnish National Fund for Research and Development SITRA (www.sitra.fi), and Esko Ollila, Vice-President of the Bank of Finland. Among the distinguished guests there were also Pekka Oinonen, the Ambassador of Finland to Estonia, and Siim Kallas, the Minister of Finance.
Aatto Prihti spoke of the structure and the main bearings of the work of SITRA. The thorough restructuring of Nokia, the enterprise with the greatest market value in Europe, is one of the indirect results of SITRA's work. Besides supporting promising technology projects, SITRA also acts as Finland's apolitical think-tank.
Esko Ollila pointed out that the export of Estonian timber as a cheap raw material is the least profitable option economically. Instead, timber and especially remains of the forest industry could be processed into paper pulp. Considering the current level of technology, this would mean a large production unit, with a price approaching 12 billion kroons. Yet this would add several billion kroons annually to Estonian export.
Mr. Ollila proposed the establishment of a development company for pulp processing plant that would take care of communication with foreign investors. The very existence of such company -- and the state's participation in it -- would attract foreign investors. As the Estonian state is short of resources, Ollila proposed that part of the state-owned forest resources could be used as a deposit into the share capital. As the paper pulp market is fairly unstable, the development company could survive by selling timber if the prices fell, Ollila added.

The presentations were followed by a vivid discussion. The possibilities of establishing a SITRA-like think-tank and financing scheme also in Estonia were considered, as well as the better usage of Estonian timber. Following the Finnish example, the establishment of a national development fund in Estonia was deemed necessary. The main stock of the foundation could consist of the enterprise shares donated by the state, and in the first years also of allocations from state budget.


Press Service of the Office of the President
Kadriorg, December 9, 1999

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