- published: 06 Jan 2012
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Estonia is a member of the European Union and the eurozone and is an advanced economy, according to the IMF.
Before the Second World War Estonia's economy was based on agriculture, but there was a significant knowledge sector (with Tartu known for scientific contributions) and a growing industrial sector, similar to Finland. Products such as butter, milk and cheese were widely known on the western European markets. Main markets were Germany and United Kingdom, and only 3% of all commerce was with the neighbouring USSR. The USSR's forcible annexation of Estonia in 1940 and the ensuing Nazi and Soviet destruction during World War II crippled the Estonian economy. Post-war Sovietization of life continued with the integration of Estonia's economy and industry into the USSR's centrally planned structure. Estonia and Finland had about the same GDP per capita before Estonia became a planned economy. By 1987, the capitalist Finland's GDP per capita was 14,370 USD and the communist Estonia's GDP per capita was around 2,000 USD.
Estonia i/ɨsˈtoʊniə/ (Estonian: Eesti), officially the Republic of Estonia (Estonian: Eesti Vabariik), is a state in the Baltic region of Northern Europe. It is bordered to the north by the Gulf of Finland, to the west by the Baltic Sea, to the south by Latvia (343 km), and to the east by Lake Peipus and the Russian Federation (338.6 km). Across the Baltic Sea lies Sweden in the west and Finland in the north. The territory of Estonia covers 45,227 km2 (17,462 sq mi), and is influenced by a temperate seasonal climate. The Estonians are a Finnic people, and the official language, Estonian, is closely related to Finnish.
Estonia is a democratic parliamentary republic divided into 15 counties. The capital and largest city is Tallinn. With a population of 1.29 million, it is one of the least-populous members of the European Union, Eurozone and NATO. Estonia has the highest GDP per person among former Soviet republics. Estonia is listed as a "High-Income Economy" by the World Bank and as an "advanced economy" by the International Monetary Fund; the country is an OECD member. The United Nations lists Estonia as a developed country with a Human Development Index of "Very High". The country is also ranked highly for press freedom, economic freedom, democracy and political freedom and education.