A piece of advice: Baltic folk don’t need our advice

By Edward Lucas

Date: 22/09/05

When an Estonian official once asked me about a suitable mission statement or motto for his country. I suggested, only half-jokingly, "We told you so".

Estonian smugness is of course legendary. But it is odd though true that on most important questions the Estonians (and usually the Latvians and Lithuanians) have been right, whereas outsiders have been wrong, sometimes wildly so.

I remember being told forcefully in 1988 by one of the BBC's best Russian-speakers that the "tiny Baltic Soviet republics" wanted only autonomy from the Kremlin. A handful of "nationalists", mainly émigrés, dreamed of full independence, but it was never going to happen.

Luckily the Estonians took no notice. They never considered themselves to be a "Soviet republic", but rather an occupied territory. And they certainly did want independence. They went ahead with the remarkable Congress of Estonia. Like its Latvian counterpart, this was an independently elected alternative (i.e. non-Soviet) parliament which sought to recreate the republic abolished in 1940. It was an important reminder that the Baltic states were not seeking to gain independence, but to regain it. This was the political equivalent of raising the Titanic - but most outsiders simply couldn't understand it, and dismissed the Congress as a nationalist stunt.

Luckily the Estonians took no notice and focused on restoring the prosperous, lawful country that was still - just - in living memory.

That included modest attempts to restore Estonian as the state language and to try to induce the hundreds of thousands of Soviet-era migrants to regularise their residence. The outside world (which mostly has far harsher rules for migrants wanting to naturalise) was sure this would mean "Bosnia on the Baltic". There were countless monitoring missions and working groups. But the result was that hundreds of thousands of people have learnt Estonian (or Latvian) and gained citizenship. It's worked amazingly well.

Then there was the senior International Monetary Fund official in 1992 who told Estonians to back "a common currency from Tallinn to Tashkent", rather than reintroducing (very successfully as it proved) the kroon.

Luckily the Estonians took no notice. The government of Mart Laar also ignored outsiders who told them not to privatise rapidly and fully, but to give state industry a lengthy, gentle transition. The speed of economic change did feel rather alarming (I was running a newspaper in Tallinn at the time) but it was the right policy. So was the decision to abolish tariffs and subsidies (now, sadly, reintroduced as a condition of EU membership). Equally successful - and accompanied by dire warnings at the time - was the flat tax.

I still remember a Western ambassador who was reduced to helpless giggles in the mid-1990s when I suggested that all three Baltic states would be EU members in ten years' time. The combination of outside competition and Brussels bureaucracy would cause them to collapse overnight, he told me. And NATO membership was not even a joke, just dangerous nonsense - as late as 2000, much of the foreign-policy establishment in Western Europe was convinced that such a step would destroy relations with Russia.

It's quite a long list, which might make Estonians and their Baltic colleagues rather sceptical of outside advice. It might also, perhaps, make outsiders cautious about offering it and keener to learn from Estonia's example. So I am pleased that British commentators are now writing enthusiastically about Estonia's flat tax. But there is some way to go: the UK's Sunday Telegraph two weeks ago wrote enthusiastically that: "Mr Laar is tipped as a European commissioner when [sic] his country joins the EU in 2007."

• Edward Lucas is Central and Eastern Europe correspondent of The Economist.

Author takes a look at Estonia's transition from a Soviet Republic to a European Union Member State.