|
|
|
Legal
grounds for privatization of large companies were established in 1992. The
companies were offered for sale through public tenders, the first of which
was published in late 1992. Small-scale enterprise privatization was
completed by the end of 1994. The privatization of land and residential
property, by contrast, had been impeded by continuing uncertainty regarding
restitution of land and slow process of land registration. In 1996 the
authorities took measures to accelerate land reform by adopting legal
provisions to hasten land sales.
Privatization
of medium- to large-scale enterprises had a slow start but accelerated in
1996. In November 1996, the national authorities compiled a list of
so-called strategic enterprises, privatization of which would have to be
decided by parliament. The largest enterprises included in the list were
the Tallinn Port, Estonian Telecom, airports, and energy and railways
companies.
The
Privatization Act of 1993 allowed for sale of assets against both vouchers
(up to 50 percent) and cash. The right to pay in vouchers was extended to
non-residents in 1996. The face value of vouchers is Ekr 300 (about US$25),
and they are tradable. The voucher program was initially due to end in
1998, but was extended until the end of 2000 due to relatively late
privatization of the more attractive larger companies. For privatization of
land, the vouchers can be used until the end of 2001.
|
|
|
|
Estonia
adopted the East German model for the privatization of state companies:
selling larger enterprises through a privatization agency, Eesti Erasmus,
and using the State Property Department to dispose of smaller companies.
The two merged in 1993 to form the Estonian Privatization Agency (EPA),
which is now responsible for all state asset sales. The privatization
process is governed by a privatization law adopted in 1993 and amended over
the years to accommodate the economic needs.
Privatization
of strategic enterprises from the list, compiled by parliament in 1996, is
decided by parliament rather than the EPA. However, the EPA can sell
minority stakes in these strategic enterprises without parliamentary
approval.
The
Estonian government's 2000-2001 economic program and structural reforms are
supported by the IMF Stand-by
Credit.
|
|
|
|
Privatization
is almost complete. The banking sector has been consolidated and is largely
foreign-owned. In October 1991 (shortly after independence was regained),
there were estimated to be 10,000 small enterprises and approximately 500
medium to large state-owned enterprises. By the end of 1997, virtually all
small enterprises and 472 medium to large previously state-owned
enterprises had been privatized. As a result of this early and determined
commitment to privatization, the private sector generated some 80 percent of
GDP (according to official estimates) in 1999, one of the highest
proportions in Eastern Europe. Among the major privatization transactions
of 1996-2000 were the sale of Estonian Air, which was partly privatized in
May 1996, Estonian Shipping in 1997, some parts of the electricity grid in
1998, Eesti Telekom (Estonian Telecom) in early 1999 and the privatization
of the passenger transport part of Eesti Raudtee (Estonian Railways), which
had been spun off to a separate company. In July 2000, the Bank of Estonia
(the central bank) sold its 50.4 percent stake in Optiva Bank to Finnish
company Sampo Finance Ltd. In 2001, Estonia’s main railway company was sold
to an international consortium. However, the sale of the Narva Power Plants
to a U.S. company collapsed, and the renovations of the plants will be
financed through long-term international borrowing and an EBRD loan by
Estonian Energy, a public corporation.
|
|
|
|
Privatization
in Estonia is regarded as virtually complete. The Estonian Privatization
Agency was wound up at the end of 2001 and there are no plans to sell off
the Government’s remaining small shareholdings, which include the port of
Tallinn and minority stakes in Estonian Telecom and Estonian Air (IMF Staff
Report 2002).
|
|
