Beyond the Iron Curtain

Written By Brian Hicks

Posted June 6, 2006

Winston Churchill would not recognize this side of the Iron Curtain. The buildings of Tallinn are tall and proliferating, and the cab drivers are as savvy as they are sneaky. An abundance of tourists, especially from Finland, have flooded into the Estonian capital in recent years. The 27 different operating "takso" (taxi) companies race to scoop up the foreigners and pump up the meters.

And after a few cab rides to and from the same places with wildly diverse prices, I was not surprised to see the covers (translated) of Estonian newspapers two Thursdays ago read, "Mayor Proves Taxi Fraud!"

Indeed, the head of this Nordic town dressed up in a ludicrous Italian-tourist getup and, along with a friend, set out to see if his city’s casual chauffeurs were as crooked as he had heard.

After getting taken for about four times what he should have paid, the sheepish mayor announced that such illegitimate charges would not be tolerated.

This episode proves two things about Estonia: it is still a former Soviet republic in some ways, but in others, it is moving rapidly towards transparent capitalism.

Everything is booming, especially property prices, which of course reflect increased demand in most of the world’s top hotspots. But the cab fares and the prices that drivers can charge also serve as a metric of the bustle and foreigners’ desire to come here.

Tallinn’s Baltic Sea view and medieval architecture are beautiful, the business environment and infrastructure are a relatively discounted version of nearby Stockholm and Helsinki, and the innovation industry is among the most impressive in the world.


Brain Blossom

Estonia’s population is one of the world’s most educated. I have been able to get by nearly everywhere with just English – though it serves one better to tell the cabbie your destination in the best Estonian accent you can put on.

Buildings in the main square of the Old Town area that were once run-down have now been restored to previous splendor, or endowed with entirely new 21st-century appeal that reflects the attitude and capability of this modern society.

It isn’t just Finns on holiday who are swarming into Tallinn. Last week, the European Union Conference of Presidents of Parliament convened in the city, with all the flag-bearing limousines and high security one would expect for such an event. The city is also slated to assume the rotating status of EU Cultural Capital in 2011.

The cabbies are taking advantage of Estonia’s new international status in a cynical way, but an announcement at the EU presidents’ conference is the opposite – a positive role model for the entire continent.

It was announced this week in Tallinn at the conference of presidents, and broadcast widely on Estonian TV, that the Baltic States would pursue a joint energy policy and encourage the European Union to do the same as a whole.

The question of how is a difficult one: should nuclear power drive the transition to energy independence? Lithuania’s Ignalina nuclear power plant is being decommissioned, which is probably a smart move considering the aging plant’s 1980s Soviet technology.

This relic from the age of Chernobyl does not have many friends in the EU, yet the Baltic States are steadfast in their drive to establish new and modern nuclear facilities for regional partnership. The new primary site is also expected to be located in Lithuania.


Unexpected Epilogue!

This past Thursday, while traveling back to Riga from Tallinn, I was shocked to learn that the Lithuanian government had been sacked because of corruption charges.

Don’t worry, this is not a tanks-and-mortars revolution, but a democratic one in the grand and befuddling tradition of no-confidence votes and parliamentary hubbub.

But the Lithuanian situation recalls the Estonian cabbies in a very important way that should not be overlooked – corruption and its corollaries.

Two Labor party ministers had been accused of corruption earlier in the week, and on Thursday Labor withdrew from the ruling coalition. Since parliamentary lists run as whole tickets and party leaders fill ministries as a government is assembled from different parties, this shake-up would leave another party to take the reins.

But there is no clear leader now that Labor has stepped down, so new elections will be necessary. This government had served intact for two years, the longest period since Lithuanian independence in 1991.

In Estonia, also, a sort of revolving-door government has seen a dozen governments in thirteen years. When governments take power anywhere, friends get a foot in that revolving door – until it spins around again and ankles get broken.

In property developments and other situations where government contracts and contacts play a significant role, a sort of institutional schizophrenia results.

The lesson from this is: do your best to invest in sectors independent of favoritism!

My contacts in the region tell me that some big trees have to fall in order for the Baltics to move forward unhindered. One of Lithuania’s biggest Russian mobsters is reported to have hopped a jet to the Russian city of Archangelsk just after the government imploded. That means that the PM’s resignation sent the graft barometer spinning in all the right ways, and we should expect a shakeout as the corruption climate changes.

As in the United States with the recent scandals involving Jack Abramoff, and the lobbying-related jailing of Rep. Randy "Duke" Cunningham, no country is completely immune to the temptations of corruption. I do not intend to portray the Baltic States as a sort of economic and political Eden, but I do believe that situations like last week’s in Lithuania are the ultimate test of democracy.

Keep it honest, and keep it prosperous.

For more information on Sam’s time in the Baltic States, visit

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