Estonians See the Foundations of Economic Success Differently Than Latvians and Lithuanians 0 17

The bank surveyed residents of the Baltic countries about what could be the key to achieving economic growth and long-term development. According to a recent survey, 19% of respondents in Estonia believe that supporting social and regional development is necessary for long-term development. In Latvia, the top priority was reforming tax and legislative regulation to promote entrepreneurship, supported by 21% of respondents, while in Lithuania, the greatest effect is seen in attracting foreign investors and promoting exports – 23% of those surveyed expressed this view.

"The results reflect that for the residents of Estonia, it is important that all regions develop evenly. This could mean a better quality of life and a more stable business environment for all residents of the country," said Edward Rebane, head of retail banking in the Baltic countries and a board member. "It is expected that residents from regions remote from Harju County consider the development of small regions to be more important. For example, this aspect was deemed the most important by as many as 67% of respondents from Hiiumaa, while in Tallinn, it was important for only 14% of those surveyed."

In addition to supporting social and regional development, the other priorities in Estonia were distributed fairly evenly: tax and legislative reform, as well as support for entrepreneurship, were supported by 14% of respondents, while 12% of those surveyed considered reducing bureaucracy a priority. Attracting foreign investment and developing exports, as well as education and vocational training, were deemed important by 11% of survey participants. Investment in infrastructure in Estonia attracted less attention – it was noted by 8% of respondents.

In Latvia, the second most significant priority is reducing bureaucracy (20%), while support for entrepreneurship garnered 14%, and investment in infrastructure and foreign investment both received 10%.

In Lithuania, where the role of foreign capital is rated the highest, the second and third places are held by reducing bureaucracy (18%) and investment in infrastructure (13%); support for entrepreneurship received 11%, and tax and legal reform – 10%. Development of education and vocational training is considered important by 8% of Lithuanians and 7% of Latvians, while in Estonia this figure is 11%. Rebane noted that, as expected, in Latvia and Lithuania, reducing bureaucracy is seen as a more important task.

"In Estonia, significantly more steps have been taken in this area, and this has also been facilitated by our high level of digitalization," Rebane said.

In all three countries, increasing financial literacy and promoting savings remained modest priorities: 3% in Estonia, and 2% each in Latvia and Lithuania. According to Rebane, this is regrettable, as in conditions of rising inflation and uncertainty, this would increase households' resilience to unforeseen situations.

As practical steps requiring immediate attention, respondents named three aspects: simplifying rules, reducing bureaucracy, and improving access to financing. The latter, according to Rebane, is already at a fairly good level in Estonia.

"According to the analysis of the Bank of Estonia, in 2023, the willingness of banks and other lenders to issue loans has increased compared to the previous couple of years. Moreover, considering the relative number of enterprises, proportionally more loans were issued outside Harju County than in Harju County itself, which should particularly benefit regional development," Rebane clarified.