How does a nation become a nation-state? Väino Reinart, Ambassador of Estonia to the U.S, has spent much of the last two decades in positions that required finding answers to that question. He was in Bloomington this week to celebrate Estonia’s independence day and to talk about the integration of Estonia into the international community. Estonians trace their history in the Eastern Baltic back ten thousand years, to the end of the last ice age when the first tribes occupied an area previously covered with ice. But for most of their modern history, they have not been their own rulers. A period of independence after World War I ended with Soviet occupation during World War II.
With the breakup of the Soviet Union, Estonians had a new chance to take back their country, but to keep it, they determined that they needed two things: stability and explicit international recognition. Stability they sought with conservative fiscal policies, such as a 26% flat tax. “Simple,” Ambassador Reinart explained. “The tax return was just a page long and took five minutes to complete.” Those policies produced a balanced budget and laid the groundwork for economic development.
Although building the wealth to support pensions and the expenses of a mature state remains a goal rather than a fait accompli, Estonia has weathered the current economic crisis better than its neighbors, and now has the highest GDP per person of any country that used to be part of the USSR. International recognition meant meeting the requirements for joining the European Union and NATO. Those requirements are founded largely on demonstrating economic and political stability. The success of the fiscal policies seems to have supported a stable political environment. The same centrist party has been in power for several years, and major changes are not expected in this year’s elections. Ambassador Reinart traced these efforts and their recognition in the eyes of the world; Estonia became a member of EU in May of 2004 and NATO in November of the same year.