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Economy of Estonia.

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Introduction

Centrally planned countries, also referred to as command or planned economies, are run and managed by the government. The government controls the whole country and decisions involving the country are made amongst themselves. They own most resources of the country, like land and natural resources, e.g. oil. The government decides what sorts of goods and services to produce and how they are priced and allocated in the economy. As a result, consumers do not have a choice of products to choose from and also no unnecessary products are imported, as the government provides all the essential goods and services for consumers. What's more, factories within a planned country are given output production targets by the government to ensure efficiency and also the necessary resources. Workers are often given evenly spread out incomes, not taking in account of what jobs they do; the government tries to balance equality amongst people by doing this. Furthermore, everybody is guaranteed a job, so there should be no unemployment and everybody is ensured housing along with free of charge basic needs, like basic health care. ...read more.

Middle

Following independence in the 1990s, the Estonian parliament pushed through a range of free-market transitions based on privatisation and a fundamental reformation of the economy. As soon as Estonia broke free of the Soviet Union, the government of Estonia decided to privatise enterprises and land as speedily as possible to begin their free market economy. Estonia's employment grew as new jobs were created as firms were privatised and foreign business entered the economy. Estonia also applied and was accepted as a member of the World Trade Organisation and started trade of agriculture products with neighbouring countries, like Finland and Sweden. Estonia has carried on privatising, things like energy, telecommunications, railways and any other state owned companies. By this Estonia achieves to become a member of the EU. In 2002, Estonia completed most of its preparations for EU membership by the transition to free market and changing its currency to the euro. The most important thing Estonia wanted to benefit from a free market was to get away from the centrally planned economy run by the Soviet Union and gain control of their own country. ...read more.

Conclusion

Estonia is has now one of the strongest economies part of the EU, which it officially joined on 1st May 2004. The Estonian economy during recent years has continued to grow. Estonian GDP grew by 6.5% in 2001 and by 6.0% in 2002. Also inflation declined modestly to 4.2% in 2001 and to 2.7% in 2002. The reason for the growth of Estonia's economy is partly due to a number of foreign companies locating in Estonia for resources and labour, also as Russian oil transits have begun using Estonian ports. Plus, the strong electronics and telecom sectors have benefited the economy. Estonia The transition started in the 1990s when Estonia gained independence. Estonia was controlled by the Soviet Union, which crippled their economy due to the Soviet Union destruction during World War II. This led to the Estonia's Independence and transition by the parliament. Estonia privatised all state owned firms and land, which increased employment as more jobs were created and attracted foreign business. Estonia applied to join the EU and in 2002, Estonia completed most of its preparations for EU membership by the transition to free market economy. The Estonian economy during recent years has continued to grow. ?? ?? ?? ?? Kamaldeep Gill ...read more.

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