Overview: As of June 1993 Estonia ranks first among the 15 former Soviet republics in moving from its obsolete command economy to a modern market economy. Yet serious problems remain. In contrast to the estimated 30% drop in output in 1992, GDP should grow by a small percent in 1993. Of key importance has been the introduction of the kroon in August 1993 and the subsequent reductions in inflation to 1%-2% per month. Starting in July 1991, under a new law on private ownership, small enterprises, such as retail shops and restaurants, were sold to private owners. The auctioning of large-scale enterprises is progressing with the proceeds being held in escrow until the prior ownership (that is, Estonian or the Commonwealth of Independent States) can be established. Estonia ranks first in per capita consumption among the former Soviet republics. Agriculture is well developed, especially meat production, and provides a surplus for export. Only about one-fifth of the work force is in agriculture. The major share of the work force engages in manufacturing both capital and consumer goods based on raw materials and intermediate products from the other former Soviet republics. These manufactures are of high quality by ex-Soviet standards and are exported to the other republics. Estonia's mineral resources are limited to major deposits of shale oil (60% of the old Soviet total) and phosphorites (400 million tons). Estonia has a large, relatively modern port and produces more than half of its own energy needs at highly polluting shale oil power plants. It has advantages in the transition, not having suffered so long under the Soviet yoke and having better chances of developing profitable ties to the Nordic and West European countries. Like Latvia, but unlike Lithuania, the large portion of ethnic Russians (30%) in the population poses still another difficulty in the transition to an independent market economy.

National product: GDP $NA

National product real growth rate: -30% (1992 est.)

National product per capita: $NA

Inflation rate (consumer prices): 1%-2% per month (first quarter 1993)

Unemployment rate: 3% (March 1993); but large number of underemployed workers

Budget: revenues $223 million; expenditures $142 million, including capital expenditures of $NA (1992)

External debt: $650 million (end of 1991)

Industrial production: growth rate -40% (1992)

Electricity: 3,700,000 kW capacity; 22,900 million kWh produced, 14,245 kWh per capita (1992)

Industries: accounts for 30% of labor force; oil shale, shipbuilding, phosphates, electric motors, excavators, cement, furniture, clothing, textiles, paper, shoes, apparel

Agriculture: employs 20% of work force; very efficient; net exports of meat, fish, dairy products, and potatoes; imports of feedgrains for livestock; fruits and vegetables

Illicit drugs: transshipment point for illicit drugs from Central and Southwest Asia to Western Europe; limited illicit opium producer; mostly for domestic production

Economic aid: US commitments, including Ex-Im (1992), $10 million

Currency: 1 Estonian kroon (EEK)=100 NA; (introduced in August 1992)

Exchange rates: kroons (EEK) per US$1 - 12 (January 1993)

Fiscal year: calendar year