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foreign trade. In our chosen reference states, this indicator usually falls between 35% and 70%, exceeding this level in Singapore, Ireland, Switzerland and Estonia (75.4% in Estonia, based on 2011 statistics), and remaining under 35% in South Korea, Slovenia, Uruguay and, based on the statistics for the last few years, also in Finland. In the case of South Korea and Slovenia, we can say that this is the result of economic policies that favour domestic capital. Of course, it must be recognised that the stage of globalisation is reflected not only by the inflow of FDI, but also by the outward FDI made by a country’s companies . While in the former socialist states the volume of inward FDI is much higher that outward FDI, then, in the Netherlands, Denmark, Finland, Switzerland, Austria as well as Ireland the outward volume is notably larger than the inward volume. The indicators based on both trade and investments have one shortcoming when it comes to measuring the stage of globalisation – they do not differentiate the economic connections with large rising markets (the majority of which are far from Europe) from the economic relations with neighbouring markets, which may be wealthy, but have a low growth potential. In the case of Estonia, both the foreign trade and foreign investment statistics indicate that its economic relations are primarily with neighbouring countries, especially in the Baltic Sea Region. The best-known synthetic indicator of globalisation is probably the KOF Index of Globalisation compiled by the researchers at the Swiss Federal Institute of Technology (ETH) in Zurich and is comprised of three components (economic, social and political). In addition to indicators for foreign trade and foreign investments (both FDI and portfolio investments), the economic globalisation section also includes the levels of direct and indirect barriers to foreign partners. Social globalisation is computed on the basis of such indicators as foreign residents’ share of the total population, the movement of people across state borders, and personal contact and information flows (international Internet and telephone traffic, access to global TV channels, and the availability of international newspapers), as well as the presence of iconic international chains (McDonald’s restaurants and Ikea home furnishings stores). The political globalisation indicators include the number of foreign embassies in the country, the number of international treaties, membership in various international organisations, and participation in various, especially U.N.-initiated, forms of international cooperation. It appears that all ex-socialist countries with the exeption of Slovenia are lower in the synthetic globalisation ranking than in the economic globalisation ranking. It can be argued, of course, whethter all indicators used for measuring the level of social and political globalisation are best suited for it; e.g. the popularity of McDonalds or Table 5.1.1. Globalisation rankings based on the calculations of the Swiss Federal Institute of Technology (ETH) (2013) Positions in the economic globalisation ranking 1. Singapore 1. Belgium 2. Luxembourg 2. Ireland Positions in the synthesised (economic, social and political) globalisation ranking 3. Ireland 3. Netherlands 4. Malta 4. Austria 5. Netherlands 5. Singapore 6. Belgium 6. Denmark 7. Hungary 7. Sweden 8. Estonia 8. Portugal 9. Bahrain 9. Hungary 10. Sweden 10. Switzerland 12. Denmark 13. Canada 14. Czech Republic 15. Finland 15. Czech Republic 16. Austria 16. Finland 17. Slovakia 19. Chile 19. Slovakia 22. New Zealand 25. Estonia 24. Israel 28. New Zealand 27. Switzerland 29. Israel 30. Slovenia 33. Slovenia 35. Chile 34. Canada 52. Uruguay 62. Uruguay 63. Costa Rica 72. Costa Rica Assessment, data from 2010-2013 Ikea out of all brands or international book trade rather than TV formats or popular music. Estonia is in second place in the world for the openness of its global information flows, which is also included in this index, and the indicators for the movement of people (international tourism and the percentage of foreign residents) are quite high. Based on the latest general globalisation level calculated by ETH, we just barely miss being included among the 24 world’s most globalised states. The majority of the EU Member States are more globalised than Estonia, but it must be kept in mind that the European Union is one of the world’s most globalised regions. Only a few countries outside of Europe (Singapore, Canada, and Australia) outpace Estonia in regard to the general globalisation level, according to the ETH methodology. References 1. Dicken, P. (1998) Global Shift. London: Paul Chapman Publishing. 2. Terk, E. (2012) “Globaliseerumine, jah, aga milline?,” Eestist ja ettepoole. Terk, E. Tallinn: Tallinna Ülikool, Eesti Tuleviku-uuringute Instituut (first published 2002). 3. Beck, U. (2002) What is Globalization? Cambridge (UK): Polity Press. 4. Bhagwati, J. (2004) In Defence of Globalization. Oxford (UK) & New York: Oxford University Press. 5. Amoroso, B. (1998) On Globalization. Capitalism in the 21st Century. Basingstoke (UK) & New York: Palgrave,. 6. Dehesa, G. (2006) Winners and Losers in Globalization. Malden MA (USA) & Oxford (UK): Blackwell Publishing. 7. KOF (2013) KOF Index of Globalization. Detailed Index Information. www.globalization.kof.ethz.ch 196 Estonian Human Development Report 2012/2013
5.2 The impacts of globalisation and possible strategies in a globalising world Silja Lassur, Erik Terk In order to ascertain the attitude of the different elite groups of Estonia about globalisation, the Turu-uuringute AS conducted an expert survey in early 2013, which included 177 experts – 43 politicians, 55 people active in the economic field and 35 in the cultural field, as well as 44 scholars who have defended their doctoral theses during the last three years. The politicians’ sample included both opposition as well as coalition members from the Riigikogu and representatives of bigger municipalities, as well as people working for the larger political parties. The group of economic decision-makers included 42 economic policymakers (the Ministries of Economic Affairs and Finance, the Bank of Estonia and the Estonian Development Fund, members of the Riigikogu’s committees on economics and finance, leaders of the national business associations, and economists who have actually participated in economic policymaking) as well as 13 representatives of companies and commercial banks, who have been active in the sectoral business associations, or who have spoken out about Estonia’s economic situation and economic policy. For brevity, the latter are referred to, hereinafter, as entrepreneurs. The sample of cultural figures also encompassed those, including journalists, who have participated in public discussions on the Estonian culture and issues related to Estonia’s general development. Since the sample included people who are in important positions and actively participate in making key decisions related to Estonia’s politics, economy and cultural life, this survey can be described hereinafter as an “elite survey”. 5.2.1 How are the results of globalisation being perceived? The survey shows that the assessments of the results of globalisation in Estonia are relatively positive, especially considering the impact of the international economic recession that hit Estonia recently. On a scale of one to five, 85% of the entrepreneurs, 88% of the economic policymakers, 65% of the politicians, 69% of the cultural figures and 73% of the newly graduated PhDs chose the option “globalisation has predominantly provided development opportunities” or “has provided more opportunities than risks for development.” In order to ascertain in detail which consequences the respondents were more satisfied with, and which less, they were given a list of nine potential results of globalisation, and were asked to assess them separately (see Table 5.2.1). We see that, as a rule, the most positive assessments were given by the representatives of the economic elite. The fact that the economic circles strongly support globalisation is not surprising. It was not the first time – a Table 5.2.1 Assessments of the potential impacts of opening up Estonia to the world Improvement of export opportunities for Estonian companies Increased diversity of lifestyles and areas of activity Inflowing foreign investments for Estonian companies Access to international financial capital Opportunity for Estonians to work abroad Increasing movement of people across state borders Increased competition in various spheres of life Opening of Estonia to foreign labour International crime related to globalisation survey conducted among Estonian economic policymakers in 2000 showed that over 90% of them were positive about globalisation. It was less obvious that the politicians that had unanimously conducted pro-globalisation policies over a long period of time, and in various governments, were more critical about some social results of globalisation than the respondents from the cultural sphere. The entrepreneurs are not as unanimously positive about the increase of competition and about Estonia opening up to foreign labour as are the economic policymakers. It should be remembered that in the assessment of some influences different respondents may base their assessments on dif- Entrepreneurs Economic policymakers Politicians Cultural figures PhDs Ranking of the sample as a whole 4.9 4.8 4.6 4.3 4.3 1 4.6 4.4 3.9 4.3 4.1 2 4.6 4.4 4.2 4.1 4.0 3 4.6 4.1 3.9 3.9 4.0 4 4.2 4.1 3.7 4.1 3.9 5 4.2 3.9 3.7 4.0 3.6 6 3.8 4.1 3.5 3.9 3.6 7 3.2 3.6 3.4 3.5 3.4 8 2.6 2.6 2.7 2.5 2.7 9 Average value on a scale, where 1 = impact has been very negative; 5 = impact has been very positive For the last option in the table (international crime related to globalisation) it is difficult to expect the answer to be “the impact is positive”. However, almost 60% of the respondents found that this impact is difficult to assess, and 31% felt that the impact of globalisation is negative. Estonian Human Development Report 2012/2013 197
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ESTONIAN HUMAN DEVELOPMENT REPORT 2
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Table of Contents 1 Human Capital /
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Dear Reader Since the moment when E
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1Human Capital Estonian Human Devel
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the HDI’s content has also been h
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Figure 1.1.1 The human development
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Figure 1.1.7 The income sub-index:
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The results of the Princeton Projec
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the hypothetical generation. The to
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Figure 1.2.3 Life expectancy. Eston
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Table 1.2.2 also presents the most
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The new trends that are appearing i
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Figure 1.2.8 Components of populati
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New features were introduced into E
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Initiation of Voluntary Birth Contr
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Table 1.3.1 Best-known educational
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(OECD 2012b). Therefore a certain r
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The reciprocal dependence of the pr
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Figure 1.3.8 Percentage of students
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Table 1.3.4 The quality of educatio
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1.4 Health Raul-Allan Kiivet Change
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Table 1.4.1 Usage of prescription m
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allude to the fact that approximate
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promote healthy lifestyles among th
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Figure 1.5.1 The World Values Surve
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Table 1.5.2 Estonia’s participati
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Figure 1.5.3 The percentage of the
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Figure 1.5.5 Percentage of the Esto
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The fact that Estonia’s position
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Summary Mati Heidmets The global vi
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2People and Society Estonian Human
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Table 2.1.1 Structure of the Bertel
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tioning market economies (15 states
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2.2 Freedom and democracy Martin M
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Table 2.2.1 Democracy indicators Po
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Figure 2.2.2 The distribution of th
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would be something that none of the
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political participation are general
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strongest, while a very small perce
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is concerned, Estonia is one of the
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Figure 2.4.2 Average circulation of
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2.5 Corruption Jüri Saar In accord
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Lithuania, 61%; and in Russia, 69%.
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2.6.2 Intentional homicides in Esto
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crime. And thirdly, there was a wis
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References 1. Ahven, A. & Tabur, L.
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states included in the EU Kids Onli
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2.8 Public assessments of the state
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Figure 2.8.4 Changes releated to tr
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of the state’s development are en
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Table 2.9.1 The positions of Estoni
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3. IEP (2011). Structures of Peace.
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3Welfare and the Quality of Life Es
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choices made, not what people say t
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Figure 3.1.5 Public social spending
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tion agreed upon the social contrac
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References 1. Aidukaite, J. (2006).
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hand, to the “inequality of acces
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and explanations of the extent of i
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5- much more than I deserve. Some d
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people in Estonia consider the inco
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Table 3.3.1 Experienced Well-Being
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at about 70%. In Latvia and Lithuan
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sign. It seems that the usual view
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3.4 Quality of life Anu Toots 3.4.1
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a uniform composite indicator has n
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3.4.6 The components of life qualit
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Figure 3.4.4c Perceived quality of
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Figure 3.4.5 Changes in the depriva
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3.5 Environment dimension of well-b
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Figure 3.5.1.b Estonia’s position
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3.5.4 Energy intensity The energy i
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Page 149 and 150: perceive themselves as worse off th
Page 151 and 152: 4The Economy Estonian Human Develop
Page 153 and 154: vide a valuable connection for maki
Page 155 and 156: Figure 4.1.3 Components of economic
Page 157 and 158: ule of law, the sub-indicators for
Page 159 and 160: References 1. Acemoglu, D.; Robinso
Page 161 and 162: Development Report employs generali
Page 163 and 164: and pasture land, and this was capi
Page 165 and 166: Basing the total and net savings re
Page 167 and 168: 4.3 Labour market Reelika Leetmaa,
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Page 171 and 172: • Expenditures for active labour
Page 173 and 174: who lose their jobs. These ensure i
Page 175 and 176: 4.4 Productivity and the economic s
Page 177 and 178: labour costs at the company level r
Page 179 and 180: Table 4.4.4 Comparison of the produ
Page 181 and 182: Figure 4.4.1 Annual average increas
Page 183 and 184: 4.5 Innovation Erik Terk, Katrin M
Page 185 and 186: Table 4.5.2 Comparison of innovatio
Page 187 and 188: Table 4.5.4 Comparison of the indic
Page 189 and 190: in order to make the R&D potential
Page 191 and 192: It is characteristic of the South K
Page 193 and 194: mechanisms for increasing their sta
Page 195 and 196: Globalisation and Policy Patterns 5
Page 197: When Estonia regained its independe
Page 201 and 202: Table 5.2.2 Support of the differen
Page 203 and 204: 5.3 Development policies Erik Terk,
Page 205 and 206: • C -the “Estonia-centred” su
Page 207 and 208: Figure 5.4.1 Support for the possib
Page 209: Summary Erik Terk Estonia is part o
Page 212 and 213: ehavioural patterns. Therefore, it
Page 214 and 215: EDR 2012/2013 authors Clemens Buche
Page 216 and 217: EDR 2012/2013 authors Alari Purju i
Page 218: Editor-in-Chief: Mati Heidmets Prod
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