Prime Minister: in 2010 state budget investments have exceeded one billion euros

07.12.2010 | 14:17

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Tallinn, 7 December 2010

Today Prime Minister Andrus Ansip gave the Riigikogu an ordinary overview of research and development activities, stressing among other things the fact that the public sector investment-to-GDP ratio in Estonia is one of the highest in Europe.

Prime Minister Andrus Ansip said to the Riigikogu members that the goal of the government during the global economic crisis was to improve the credibility of the Estonian economic environment, paying primary attention to the issues of raising productivity and competitiveness levels. The spheres that were thus focused on were research and development, education, investment and supporting enterprises to boost their international breakthrough capacities.

“The percentage of the Estonian state budget contribution to our education and economy clearly exceeds the average figure for the OECD countries,” he explained. “The public sector investment-to-GDP ratio in Estonia is one of the highest in Europe The fact that in 2010, despite the limited budgetary possibilities, the state budget investment sum has for the first time exceeded one billion euros, speaks for itself. It shows that, in parallel with ensuring the budgetary balance, it is feasible to channel more funds than before to support Estonia’s competitiveness and create new jobs.”

According to the head of government, increased education spending should be viewed as the Estonian success story. “In 2008 education expenditure was 6.7% of GDP. Of the 27 European Union Member States, only three countries boast a higher percentage: Cyprus, Denmark and Sweden.”

In his speech the prime minister thanked the Estonian entrepreneurs who had the foresight to invest in such activities that are not immediately profitable but create opportunities for the future. “As a rule, a company implements a considerable reduction of its development expenses during an economic crisis,” he said. “Yet in Estonia, despite the difficult situation, the absolute volume of development investments has remained unchanged.”

The prime minister also urged the listeners to engage in a wider discussion of the efficiency of supporting enterprises. “Last year and now we have spent 450 million kroons to finance enterprise product and service development. Approximately one third of this subsidy money has been allocated for bio- and gene technology and biomedicine development, and another third for information and communication technology development. This demonstrates a clear preference for certain top-priority fields. It is too early to assess the influence of these investments, but we should undoubtedly discuss the expediency and efficiency of such subsidies.”

In addition to tackling the issue of fostering enterprise innovations, the prime minister spoke about the need to advance the economic environment as a whole. “Our enterprises may have excellent products and services, but no way of selling them without the proper infrastructure for air traffic and exchange of goods. Developing cross-border infrastructure and increasing air traffic frequency are indeed important challenges for Estonia.”

In summing up, the prime minister pointed out the following assessment from the report compiled by the Research and Development Council: by stimulating innovative approaches, we can, in the next 7 years, double economic growth in Estonia. “This can happen if we make carefully considered and right decisions and value and preserve our already attained strengths,” he said.

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