Estonian businessman: Estonian transit will struggle another 10 years19.06.2008, 12:57
It is winter for Estonian transit for the
next 10 years, Estonian businessman Endel Siff told Business New Europe.
Siff has given up hope that the trade will recover and sold his share of the
Pak terminal near Tallinn last year after 20 years in the oil transit business.
Transit trade from Russia through Estonia has collapsed since the Bronze
Soldier dispute just over a year ago. The economy ministry estimates that the
decline in transit trade since last April's disturbances cut Estonian GDP growth
by up to 1.5 percentage points in 2007 and that this year the loss of trade
could cost up to 2 pct of GDP.
The Estonian authorities are putting a brave face on the slump in transit
trade. The government downplays the trade's importance, estimating that it
represents around 5 pct of GDP, down from around 10 pct at the start
of the decade. "Russia is really not very important for us - we don't face
east," says President Toomas Hendrik Ilves, adding that the cost of the Bronze
Soldier dispute has been overblown.
Some politicians have almost welcomed the decline in transit trade. "I'm not
sure we want to be this big hub between east and west," says Foreign Minister
Critics say the transit trade is low value-added, makes the economy dependent
on Russia's economic performance (and therefore more volatile), and corrupts the
Estonian business environment. The transit trade also brings costs, notably from
heavy truck traffic.