posted on Jun, 21 2011 @ 11:12 PM
In 1992, a 32-year old historian by the name of Mart Laar became prime minister. As Mr. Laar often mentions, at the time he had only read one
economics book and that was Milton Friedman’s “Free to Choose.”
He says, “It sounded good to me so we went ahead and did it.” Under Mr. Laar’s leadership, they did not diddle with reform, they went at it on
all fronts full speed ahead — “shock therapy.” They re-established the rule of law, property rights, and were serious about getting rid of
corruption. They opened themselves to trade and privatized most of the economy. Also, they instituted a flat tax, which was quickly copied by many
other countries, including Russia.
Indicators – Year 2011
Economic Growth Rate (%) - +6.0%
GDP per Capita (USD) - $19,375
Government Debt as a % of GDP – 5.0%
Deficit as a % of GDP – 1.6%
Heritage Index of Economic Freedom Rating* (183 countries rated) - #14
Fraser Economic Freedom of the World Rating* (141 countries rated) - #12
Transparency International Corruption Index* (178 countries rated) - #26 (low=good)
World Bank Doing Business Index* (183 countries rated) - #17
As the United States and her West European friends slip further into economic stagnation the ex-Soviet nation of Estonia, which for 6 years had over
8% GDP growth, has now lifted itself out of the sharp economic downturn while ravaged the nation for 3 years and is churning out growth at tremendous
levels. The only thing I could further recommend for this Baltic state is to abandon the Euro and return to their former currency, the Kroon, which I
think would further accelerate their national growth.
While Americans, the ones throughout our history most devoted to free-market capitalism, turn towards centralization, bureaucratization, and
micromanagement of our nation’s economy the Eastern Europeans have accepted what we have abandoned and it seems to work.
So as we continue to struggle just to put food on our table, just think happy thoughts about the far-away nation of Estonia which has taken our old
ideas and ran with it, growing their economy and becoming more prosperous every year.