As Estonia took over the Presidency of the Council of the European Union on July 1st, the President of the Republic says in an interview with Life in Estonia that despite the fact that Estonia is a relatively well-off country, everyone needs to work harder to promote its urban environment, general greenness, and lack of hierarchies.
When you became President in October 2016, you said you were eager to hear ‘what people have to say’, and indeed, you have been going to places and meeting and speaking to a good proportion of the people. What has been the most surprising thing to hear/see?
I always feel great gratitude if I manage to touch upon a nerve that really matters to the people who might feel that not enough attention has been paid to their issues, which tend to be not so beautiful. Social cohesion issues, questions that relate to handicapped people or to people who have somehow faced violence in society etc.
We are a relatively well-off country and we have to help those who have had a bad draw in this life, be it through their personal history in the family or a handicap. We seriously need to think how we could help those people better and I’m trying to focus minds on this.
I’ve also noticed that people working in the Estonian public sector ask me to come and talk to them about general public sector management issues. And this is something that I really like to do. Seems a bit like management consultancy, and indeed, it is.
In your opening speech for the Latitude 59 Conference this spring you reflected on the future of remote work and how in 20 years time countries will be competing for talent just like big companies do these days. What is it that Estonia has to offer that other countries would find hard to compete with and how should we better take advantage of this opportunity?
I also touched upon this at the Brussels Forum and in GLOBSEC. I seriously believe that we need to start thinking more ahead instead of trying to adapt the current social model to the changes we know today. If we all agree that industrial job market is changing – or altogether disappearing – we need to adapt as states. And indeed, instead of discussing who gets the Starbucks taxes, we should consider the option that most people do not need to physically be in Estonia. Or they are in Estonia but work for five different countries at the same time in different sectors and, in addition, reap some rewards from allowing other people to use their property somewhere? Who gets the taxes? My understanding is that it needs to be a contract between a sovereign state and its citizens or the people who want to use this state as their security provider – they do not necessarily need to be citizens. To provide them with a safe dock where they pay their taxes and where they expect to get social and educational services and the general protection a government provides to its citizens and inhabitants. It’s more and more of a personal choice, not necessarily related to where you live.
Estonia has a competitive advantage because our society is digital. Our citizens can relate to the state from afar. And yet – I’ve also asked this question from our public sector leaders –, let’s imagine that the private sector is not demanding the workforce to be in Estonia as there are lots of jobs where you can follow what is going on on the screen. If you wish, you can check the temperature and humidity of a food warehouse from the Mediterranean. I’ve asked the public sector: are you ready if those people who have these monitoring jobs are needed by both the public and the private sector? If you do not offer the possibility to work from the Mediterranean, you are simply losing out. You cannot hire these people because they simply want their geographical freedom. And if it’s possible to check on the potatoes and cabbages from a distance, it also has to be possible to check the border from a distance. Are you ready for it? When will you be ready? These are the questions we need to discuss – in Estonia, in Europe, and globally. So it makes sense that the public sector will follow the private? Not necessarily.
Since the public sector normally offers slightly lower salaries, it can, of course, jump the boat and do it quicker. But a problem would arise if they are slower. Then they would lose out on the job market. But I don’t see it as a competition. It’s rather a trend in the society which we don’t fully understand but we know is happening. And we should try to think a little bit ahead of the curve. If we don’t, we’ll lose out to some other country that is allowing a lot more flexibility in the social system. If you ignore it, you’ll actually lose tax revenue as well because people simply opt out of the system at the age when they are already earning decent salaries but do not yet have so many demands on the social security systems.
So it makes sense that the public sector will follow the private?
Not necessarily. Since the public sector normally offers slightly lower salaries, it can, of course, jump the boat and do it quicker. But a problem would arise if they are slower. Then they would lose out on the job market.
But I don’t see it as a competition. It’s rather a trend in the society which we don’t fully understand but we know is happening. And we should try to think a little bit ahead of the curve. If we don’t, we’ll lose out to some other country that is allowing a lot more flexibility in the social system. If you ignore it, you’ll actually lose tax revenue as well because people simply opt out of the system at the age when they are already earning decent salaries but do not yet have so many demands on the social security systems.
Right now it’s only the pension system that penalizes opting out and then opting back in. You’ll lose if you say that you have to work our way or we don’t want your taxes. ‘Our way’ being 5 days a week, 12 months a year for 30 years, then retiring. This no longer matches the understanding of what work life is. It will solve a lot of problems, like balancing work and family because you simply have a lot more flexibility in the system. But it will create new problems if we do not adapt.
You also mentioned that in 20 years’ time, Räpina – a small town in South-Eastern Estonia – will be a place where people will want to live.
Yes, this comes directly from the fact that it does no longer matter where we live. Therefore you’ll choose calm, green, nice places. The late economics professor, Andres Arrak, who just recently passed away, has said that Estonians are very rich in the sense that they can walk around their house. Not too many people in Europe really can. This will be a real asset quite soon when people no longer need to gather in towns. Yes, there are the people who are afraid of frogs and insects as they are already of the second or third generation used to urban infrastructure so they wouldn’t seek anything elsewhere. But particularly in Estonia, as well as elsewhere in the Nordic region, we have many people who would never come to densely populated urban areas if they could afford to live somewhere else. So indeed, I believe that in 20 years time lots more people will use this freedom.
As Estonia is undertaking the task of EU Council Presidency for the first time ever, how can we help/soften and overcome the EU’s challenges and not just fill in the spot but actually make a difference among the bigger countries?
We already have made a big difference by being small, flexible and not having any hierarchies at all. We did not hesitate to take over half a year earlier (because of Brexit – ed.). We knew we could do it and we can. We obviously stand out in and our partners expect us to take care of all things digital. It’s interesting to see how digital issues, horizontal in different policy areas, have come to our table. There is, of course, the question of the Fifth Freedom – digital freedom – and there are special directives which we hope to promote as well. But in all other policy areas we also see these elements come up.
We have a reputation of understanding society differently. We also have a reputation for already having a generation living in the internet, therefore we get slightly better at cyber-hygiene.
While dealing with all of those digital issues during our Presidency, it’s extremely important to deliver the message that while every society will be digital, it will still be a different society. Estonian society is digital in one particular way and Finnish in another because the state is culture and this culture will be preserved while becoming digital. It’s not about seeking unification or harmonization in any way; every country will go its own way. And this is where we encourage the countries to adopt the view that we know – that in cyberspace there are also risks and there are crooks but we don’t want to abandon that space and lose out just as we do not abandon our streets. We do not want governments to be unable to use the technological space just because there are risks. We just need to teach our populations to be cyber-hygienic.
I feel for people who are not used to the internet environment because it’s very different from when we started to use the internet. The highest risk was a virus for which you had forgotten to download Kaspersky or some other anti-virus system. Now it’s the Internet of Things (IoT) which other people need to join, it’s a totally different issue. So we need to be sensitive about the problems and the questions people ask, but based on our digital experience, we may have a little more insight on how to answer those questions.
This article was originally published on Life In Estonia n°46, 2/2017. Read the full interview and a number of other related articles on the latest issue of the magazine here.