Foreign Direct Investment in Estonia: Fostering the transition process?

Exposé Histoire & géographie Géographie monde

Date de publication :

13/05/2008

Langue :

French

Format :

.doc

Nombre de pages :

22 pages

Niveau :

expert

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Preface
Background (General characteristics of FDI in CEE)
Theories of investment
Theory of FDI
How to create a competitive economy?
Empirical Part - Bertelsmann Transformation Index
Evaluation of transformation management

Résumé :

Since its accession to independence in 1991, estonia didn't stop to advance on its way to become an industrialized country and in the space of 10 years, a country of 1,3million people and having nearly the size of Netherlands has gone from being part of a closed and inefficient economy to being acclaimed as the leading transition economy of the former socialist bloc and as one of the most promising economies in the world according to some economic ranking. Indeed, estonia has even been recently ranked 4th on the heritage foundation/Wall Street Journal "2005 index of economic freedom" and being then the first soviet satellite to crack the top ten and ranking then ahead the Western democracies including U.S. and United King-dom.
One can then talk about the economic success story of estonia, with maybe as a major factor, the government's commitments to fiscal discipline. Nowadays, the country's budget is producing a surplus and has a flat personal income tax, pushing investments to come in. Moreover, the government is now removing itself from the economy and the current flat tax rate of 26% is scheduled to drop of 6% by 2006. According to the CIA World Fact book, electronics and telecommunications are the country's strongest industries while the services sector accounts for 64% of GDP against 35% for the industry and agriculture sectors.
Nevertheless, this success story didn't happen overnight but is the result of a develop-ment process started in the late 1980s and early 1990sand several factors assisted the country in launching itself on the right path. One can then wonder what were those key success and how they acted in making the country so efficient. It will then be the aim of this report to un-derstand and describe the transition process of estonia.