VZCZCXRO5601
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTL #0543/01 2331107
ZNR UUUUU ZZH
R 211107Z AUG 07
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 0093
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TALLINN 000543 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
FOR EUR/NB -- KATHERINE GARRY AND EUR/ACE -- JENI WASHELESKI 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON EAID EN
SUBJECT: ESTONIAN INTERNATIONAL AID AND DEMOCRACY PROMOTION 
 
REF: TALLINN 432 
 
¶1. (SBU) SUMMARY:  Given its success with rapid democratic 
and economic reform, Estonia enjoys a high level of 
credibility and influence with developing countries seeking 
assistance.  As part of the Government of Estonia's (GOE) 
larger plans to promote democracy and market-based 
development, development assistance is playing a more 
important role in Estonian foreign policy.  Although 
Estonia's development assistance is focused on four 
priority countries (e.g., Afghanistan, Georgia, Ukraine, 
and Moldova), the GOE continues to expand its internal 
assistance budget to promote democracy and development in 
the region and around the world.  End summary. 
 
Overview of Estonian Foreign Assistance 
--------------------------------------- 
 
¶2. (U) As Estonia does not have a separate development aid 
ministry, the Ministry of Foreign Affairs (MFA) coordinates 
all Estonian aid.  In 2006, the GOE spent $15.29 million on 
disaster relief, public sector institution building, and 
support to multilateral and international organizations' 
development assistance programs.  A breakdown of the GOE's 
2006 assistance reveals the following: 86% for multilateral 
and international organizations ($13.15 million) and 14% 
for bilateral assistance ($2.14 million). 
 
¶3. (U) In a July editorial in Eesti Express, Estonia's 
leading weekly current affairs newspaper, Foreign Minister 
Urmas Paet wrote that development assistance and democracy 
promotion will play an increasingly important role in 
Estonian foreign policy.  "We are setting ever higher 
targets in international development cooperation," FM Paet 
wrote, "after all, it is embarrassing for us that cows in 
Europe receive a subsidy of [$2.62] per day while half of 
the world earns less."  In 2006, Estonia devoted 0.084% of 
its Gross Domestic Product (GDP) to development co- 
operation (up from 0.08% in 2004), and has pledged to 
steadily increase its contribution to 0.1% by 2010.  For 
2007, the MFA has set for itself a goal of spending $15.62 
million (0.094% of GDP) on humanitarian aid and cooperation 
development.  (Note.  The MFA is responsible for over 90% 
of the GOE's total foreign assistance budget.  End Note.) 
 
¶4. (U) The MFA has made supporting new democracies in their 
reforms the main objective for Estonian assistance.  This 
involves supporting initiatives that provide peace, 
democracy, protect human rights, promote economic and 
social stability, and eradicate poverty in accordance with 
internationally approved principles of sustainable 
development.  Estonia's own example of creating stable and 
democratic public institutions and a vibrant economy so 
quickly after five decades under the Soviet system have 
given it enormous credibility within the region and the 
wider world.  Nenad Kolev, Macedonian Minister-Counselor to 
Estonia, told us "Bigger and richer countries provide us 
with more assistance, but we see Estonia as a model and 
example that we can learn from" to explain Macedonia's 
rationale for establishing a diplomatic mission in Tallinn. 
 
¶5. (U) As NGOs are still relatively new to Estonian 
society, the MFA has made it a priority to promote them 
through consultations with the Estonian Development Co- 
operation Roundtable.  This MFA initiative has helped the 
Estonian NGO community coordinate amongst themselves better 
and allowed the GOE to outsource some of its projects to 
the NGOs.  For example in 2006, in response to the 
expulsion of Belarus university students from their home 
country for publicly supporting pro-democracy opposition 
parties, the MFA set up scholarships for 10 of them to 
continue their studies in Estonian universities and tasked 
the Open Estonian Foundation (OEF), an NGO specializing in 
democracy promotion in the region, with implementing the 
project.  Kelly Grossthal, Project Manager for the OEF's 
Support Group for a Free Belarus, told us the partnership 
has been successful and hopes to see further collaboration 
of this type. 
 
Estonian Assistance in more Detail 
---------------------------------- 
 
¶6. (U) During 2006-2007, approximately 85% of Estonia's 
total foreign aid was in contributions to international and 
multilateral organizations on projects focusing on 
humanitarian and disaster recovery efforts, and 
governmental institution building.  The GOE contributed to 
the following multilateral and international organizations. 
 
- The International and Estonian Red Cross, 
- The UN Development Program (UNDP), 
 
TALLINN 00000543  002 OF 002 
 
 
- The UN High Commissioner for Refugees (UNHCR) 
- The UN Office for the Co-ordination of Humanitarian 
Affairs (OCHA), 
- The UN Children's Fund (UNICEF), 
- The UN Voluntary Fund for Indigenous Populations, 
- The UN Voluntary Fund for the International Decade of the 
World's Indigenous People, 
- The OSCE Voluntary Fund for Activities Related to the 
Removal and Destruction of Russian Military Equipment and 
Ammunition from Moldova, 
- The World Food Program (WFP), and 
- The European Commission's Development Assistance Program. 
 
¶7. (U) A geographical breakdown of Estonia's contributions 
to international projects reveals the following: Lebanon 
(31%), Sudan (30%), Indonesia (19%), Democratic Republic of 
Congo (15%), and Ukraine (5%).  In 2008, Estonia will begin 
to contribute to the European Commission's "European 
Development Fund," which will increase Estonia's total 
development assistance expenditures and give it more 
influence in how and where EU development assistance is 
spent. 
 
¶8. (SBU) The remaining 15% of Estonian assistance was in 
bilateral development assistance.  Geographically, during 
2006-2007, Estonian foreign aid can be broken down in the 
following: 59% for Asia, 35% for Europe, and 6% for Africa. 
This breakdown reflects the GOE's foreign assistance 
priority countries: Afghanistan, Georgia, Ukraine, and 
Moldova.  In 2006, the GOE earmarked 52% of its total 
bilateral assistance for these four priority countries. 
(Note.  More detailed information on Estonia's development 
assistance for Afghanistan has been reported (reftel) with 
a septel report on assistance to Georgia, Ukraine, and 
Moldova.  End Note.) 
 
¶9. (U) A relatively small slice of Estonia's bilateral 
assistance (less than 10%) was spent on high tech-focused 
projects, but these often attract the greatest 
international attention and interest from aid recipient 
countries (e.g., the "Deer Leap" program to provide 
internet access in Georgian schools and the E-Governance 
Academy's efforts to help regional Egyptian authorities 
create a "paperless government").  According to Marje Lupp, 
MFA Director for Development Cooperation and Assistance, 
"There are many other countries with an IT reputation as 
good as or better than Finland, but Estonia had to create 
its IT/high tech industry from nothing in just over 16 
years...which is why people want our expertise." 
 
¶10. A full accounting of the MFA's assistance, including 
project specific details, is available on the MFA's 
website: 
http://www.vm.ee/eng/kat_178/3463.html 
 
The Future of Estonian Assistance 
--------------------------------- 
 
¶11. (SBU) The MFA is currently at work drafting a new 
development assistance strategy to succeed its 2003-2006 
strategy.  Our MFA interlocutors who were involved in the 
drafting have informed us that Estonia will continue to 
focus on sharing its experience in the areas of political 
and economic reform.  While Belarus may be added as a 
priority country in the future, in the short- to mid-term 
Afghanistan, Georgia, Ukraine, and Moldova will continue to 
remain the GOE's priority countries.  The GOE will keep its 
0.1% of GDP assistance budget target, but MFA interlocutors 
have told us that their long term goal is 0.17% (which is 
the EU target for member states that joined in 2004) and 
they will continue to lobby the cabinet for the EU target. 
 
¶12. (U) Since Estonian foreign assistance is modest in 
absolute terms, the GOE is seeking ways to promote more 
trade between itself and its priority countries.  However, 
with a population of just 1.3 million, MFA interlocutors 
have told us that Estonia is actively lobbying within EU 
fora for the EU to open up the much larger EU market for 
developing states.  In the July Eesti Express editorial, FM 
Paet wrote that development aid by itself is not enough to 
reduce poverty.  He called on the EU to reduce and/or 
simplify its import tariffs on goods from developing 
countries to the EU market. 
 
¶13. (SBU) Comment. In just over 16 years, Estonia has gone 
from an aid recipient to being a donor nation.  Estonia is 
a model of political and economic transformation, which 
gives it a much higher level of influence and credibility 
with countries seeking its assistance.  End Comment. 
 
PHILLIPS