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All Eyes On Estonia, a Tech-Savvy State With a Balanced Budget

BY Nick Judd | Monday, October 24 2011

Both BBC News and Der Spiegel took time last week to run paeans to Estonia, a famously wired post-Soviet democracy that appears to have its fiscal house in order even as large countries, with citizens living higher on the hog, find themselves in trouble.

Der Spiegel's Ralf Hoppe and Jan Puhl, translated from the German, sum it up this way:

Just what is it that makes such a country work? What's so great about Estonia?

"Muchas cosas pequeñas," or many little things, says Spaniard Naphtali Peral. He says that he established his company here in only half a day, mainly online. The record for establishing a company, he adds, is only 18 minutes. In other words, the government doesn't say: Hey, Peral, who do you think you are, starting a company, just like that? No, he says, the state actually encourages entrepreneurship, and says things like: So you have an idea, Peral! Go for it! And then he says that it takes him 20 minutes to prepare his semi-annual tax return, and that when it was time to slash the government budget, Estonia's cabinet ministers started with their own salaries.

For BBC News, Charlotte Ashton interviews Tallinn, Estonia-based Skype's Sten Tankivi.

"You can view the country of Estonia itself as a start-up. It regained independence just 20 years ago and generally the society or culture here has very little hierarchy," Ashton quotes Tankivi as saying. "It's very small and nimble and that sort of environment is very positive for entrepreneurship."

The Der Spiegel item has more admiration for what Hoppe and Puhl describe as a small-government tendency in Estonia, enabled by the ability to streamline services and reduce paperwork through Internet applications. A savvy attitude towards technology, in their reading of the way government works there, is part of a successful austerity strategy.

The Baltic state requires each citizen to have a mandatory national ID card that can also provide legally binding digital signatures. Citizens there can also use the SIM card in their mobile phone as they would use an electronic ID card.

Regardless of whether life in Estonia is as stable in rough economic times as it seems to be for the country's government, many are taking notice. State Department technology advisor Alec Ross announced over the weekend that he had visited recently with Estonian officials.