Estonian e-solution is running for the best data visualization (14/10/2013)

The Estonian e-solution that shows the financial capacity  and public services by local municipalities is competing in the first data visualization competition.
There are 10 e-solutions at the international competition,  so cast your vote by October 16 and take the chance to support the only e-solution developed by the Estonian think tank Praxis at “Competition entries include web applications from countries as diverse as Chile and Kenya; several applications focus on national or local budgets, and the use or misuse of public money,†Hille Hinsberg, one of the authors of from Praxis Center of Policy Studies, explains. can be used either for browsing data or for comparison of indicators, e.g. water and sewage tariffs for home owners; the price per person in elderly care facilities or the number of kids per teacher in the nearest kindergarten. Financial data includes tax revenue and investments per capita which show the ability to develop local services and infrastructure and therefore attract residents. The user can easily make a comparison between their home municipality and another region, or get data on the country as a whole. All this information is especially valuable right before the local government elections, which take place on October 20th this year.
The webpage was designed by Praxis and Geomedia, the author of the interactive web solution is Tanel Kärp. The information presented on the web page comes from various public databases. The project is funded by Open Society Foundations.

Praxis: Quality of IT education is a concern (04/11/2013)

According to Jürgenson, the study revealed two main problematic areas in education.
“The first thing we found is that contrary to popular belief, not all parts of the ICT sector are plagued by a shortage of labour,†she explained. “We primarily lack professionals who are able to develop software at an advanced level and people who can administer databases and systems.â€
Jürgenson went on to say that the supply of labour does not necessarily meet the need. “In the case of higher education, the aggregate figures remain in the same category, but the proportions could change: we should focus more on training people for the professions mentioned above. In the case of vocational education, it could happen that supply exceeds demand and schools fail to offer what employers need.â€
“Secondly, the quality of ICT education offered in Estonia has failed to keep up with the increase in the number of students, especially in vocational education, but there are problems in higher education as well,†said Jürgenson. “The general competences level of our ICT teachers is really not up to scratch.†She added that the communication, presentation, self-management and project management skills of graduates are often modest.
The study highlights that employers expect ICT education in institutions of higher education to be more practical. The situation could be improved through a better work placement system for ICT students, as employers are not satisfied with the way these are currently organised in either vocational or higher education. “This isn’t news to anyone, and employers therefore expect to finally see the system thoroughly updated, as the achievement and announcement of small steps of success doesn’t cut it,†said Jürgenson.
The study focussed on the need for ICT specialists in the ICT sector and in other areas of activity. There are currently 16,300 such specialists in Estonia, aroundhalf of whom work in the ICT sector and half in other areas. A labour demand forecast for the ICT sector was prepared considering current labour proportions, labour turnover elasticity and the future scenarios of the sector. It was found that the number of additional workers required to fill positions requiring professional ICT qualifications until 2020 is up to 4,500 in the ICT sector and 6,600-8,500 in the economy as a whole, both depending on growth scenarios.
A summary of the study is available online at link (in english) and the full version at link (in estonian).
The study was carried out with the support of the ‘Estonian higher education information and communications technology and research and development activities state programme 2011-2015’ (ICTP) and the European Regional Development Fund via the Estonian ICT Cluster.

For further information please contact:
Anne Jürgenson
Economic Policy Analyst, Praxis

No country is alone…? (1/08/2013)

Article has been published in Eesti Päevaleht. Twenty-six years ago these lines echoed from the lips of many Estonians in support of Viru County. Nevertheless, we are today in a situation in which Ida-Viru County has Estonia’s highest unemployment rate, the county’s average salary is among the lowest in Estonia, the population is ageing faster than the Estonian average, and a quarter of the young people are unemployed and leaving the area en masse. During the Phosphorite War, people desired to save the nature of Viru County from the predatory mining of a foreign power. Today, we can decide on our own possible mining volumes and the tolerance limit of the accompanying environmental impact. Therefore, we should act as responsible owners and find a compromise between profit gained from using resources and possible damages.
Socio-economic dependence on oil shale
The socio-economic impact of the oil shale industry is often overshadowed by environmental damages. Undoubtedly, this is the county’s biggest employer, important in a region suffering from a severe unemployment rate. The oil shale sector engages about 7000 people, whose earned income is about EUR 75 million per year. If you add to this goods and services related to the oil shale industry, such as transport, equipment maintenance, catering, and the staff of services companies, which is about the same number, then the employment associated with the oil shale sector is about one-fourth of total employment in Ida-Viru County. Proprietary income created during mining and processing oil shale is about EUR 100-120 million a year, the majority of which is earned by Eesti Energia AS, and the entire country benefits from this. The local governments of the area receive about EUR 10-11 million per year in income tax from oil shale sector workers.
The negative environmental impact of oil shale mining should not be underestimated; the region’s development could also be damaged by overestimating it. The oil shale industry is a field where the supervision is among the strictest found in the industrial sectors. As a result, the companies have invested a great deal in environmental measures: installed air filters and water treatment equipment, searched for solutions to recycle mine waste, and improved waste depositing technologies.
Besides the current environmental impact, we should pay more attention to alleviating the aftereffects of direct (for example, self-igniting mine waste hills, ground sinks, excess water drainage) and indirect consequences (empty former miner’s residential areas, higher building costs for buildings on underground mined areas, etc.) of intense mining during Soviet times. Although the Earth’s Crust Act states that damages from mining activities from more than ten years ago shall be compensated by the state from the mining rights income, in reality these expenses are covered by local governments or even the residents themselves. One example would be the condition of buildings located on areas that have been mined empty underground. Afterwards, it is hard to determine whether the cracks and rifts in the structure of a building are the result of construction works, poor material quality, or sinking ground.
Mining fees as the state’s source of income
At the same time, companies pay environmental charges related to oil shale mining and processing, for example, mining rights fee, pollution charge, and special water use right, in the order of magnitude of EUR 45-50 million per year — more than two thirds of the environmental charges paid in Estonia. From this, EUR 12 million per year is redirected to the budget of Ida-Viru rural municipalities with active mining activity and EUR 3.7 million is used to improve the environment through the Environment Investment Centre. Considering that most environmental damage is local and even the extent of impact of such factors as the air quality or groundwater situation is highest in regions with active mining and industry, this proportion seems to be strongly inclined: mining fees as the state’s source of income, not the source of alleviating environmental damages.
When regulating mining, we should weigh what impact the planned changes have on the socio-economic development of Ida-Viru County (recent quick increase in environmental charges, possible mining volume limitation). Income earned from mineral resources should be used to improve the living environment of Ida-Viru County and favourable development conditions should be created for the time when oil shale deposits are exhausted.
Dear governors, let us show that Ida-Viru County is not alone…
The article is based on the results of research recently completed by Praxis, “Evaluating the socio-economic impacts of mining and processing oil shaleâ€.

Moldova following Estonian example in development of e-Health services (14/08/2013)

On the leadership of Praxis and support of Estonian Ministry of Foreign Affairs, Estonian e-Health specialists are visiting Moldova last week, to share knowledge and experiences of e-Health solutions implemented in Estonia. During the previous year, experts have helped to develop Moldova’s national e-Health strategy and now, the services that are going to be introduced in the coming two years are selected.
One of the experts, doctor Peeter Ross notes, that many of the important components of Moldovas e-Health solution are already set. “It is very nice to note, that in present phase of development, experience from Estonian e-Health implementation benefits Moldova the most. At the moment we can use Estonian experience the most effectively in order to complete what is already started in Moldova,†states Ross.
Expert of healthcare informatics, Ain Aaviksoo, brings out that Moldova is a good example of utilizing practical experiences from Estonia. “There exists a unique opportunity in Moldova to support the necessary rearrangements in healthcare system, by using information and communication technology,†he adds.
E-services help to increase the transparency of health related procedures, increase the quality of treatments, give the opportunity to analyze already exciting processes and carry out more effective healthcare investments. In Moldova’s present phase, it is important to find these services which benefit the inhabitants the fastest and most direct. Examples of this are the constant flow of information in the integrated network of hospitals and general practitioners and the digital prescription service which has solidly implemented in Estonia.
Estonian specialists involved in the development of e-Health services project are healthcare analyst Priit Kruus from Praxis, expert of healthcare informatics Ain Aaviksoo, expert of e-Health Peeter Ross and expert from the e-Governance Academy Arvo Ott.
Praxis Center for Policy Studies is the Estonian leader of the project, in Moldova the project is run by the Ministry of Healthcare and local WHO office. The project is co-funded by development cooperation and humanitarian aid means of Ministry of Foreign Affairs in Estonia. The project of e-Health services development is a part of a wider cooperation between Estonia and Moldova sectoral organizations.

Priit Kruus
Analyst of Health Policy
Praxis Center for Policy Studies

Report outlines results of major public involvement process of non-citizens (19/09/2013)

Recommendations by people from 25 different countries focus on such policy areas as employment, education, access to public services, participation in the local community and policy-making processes, cultural diversity and learning Estonian. The objectives of the project were to include third-country nationals living in Estonia in decision-making processes and to garner recommendations contributing to the development of the national Strategy on Integration and Social Cohesion and its implementation plan.
“Several challenges remain in the field of integration – it’s impossible to single out one major problem or recommendation,†said Praxis analyst Maiu Uus, one of the organizers of the process, commenting on the results of the debates. “The most important result was getting confirmation that integration is a shared responsibility and that the success of the new strategy depends on the success of the cooperation between ministries and state offices. The recommendations presented in the report will help experts in various fields develop activities in the coming years.â€
The debates at the open forums were constructive, lively and mostly focused on positives, as the main objective was to work on finding solutions. “There’s no reason to think that this part of the population consists of extremists or that they’re highly critical,†said Uus, adding that there is clear consensus regarding the new direction of the development plan in focussing more on joint activities that bring together different national groups.
“It was clearly visible from all of the debates that access to information is a problem for both ethnic Russian speakers who’ve lived here longer and newly arrived immigrants,†explained Kristina Kallas from the Institute of Baltic Studies. “It’s often been mentioned how the Russian-speaking population lives in a different infosphere compared to Estonians, but now it’s become clear that newly arrived English-speaking immigrants aren’t well informed about daily life in Estonia either.â€
A number of key issues were also raised in regard to how informed people are. For example, those taking part in the debates remain concerned not only about the varying quality of language teaching, but also the availability (or rather lack) of language practice opportunities and language courses, particularly outside of Tallinn and Tartu. Representatives of both the Russian-speaking and new immigrant groups also highlighted ostracism by Estonians as a problem area, which often manifests itself in direct or indirect discrimination.
As in previous surveys, the foreigners who participated in the Russian- and English-language debates considered it important that Estonia’s laws be made available to them in a language they understand. “In that respect it’s disappointing that the proposal in the Riigikogu yesterday to have the country’s laws translated into Russian didn’t make it beyond a first reading after just 40 minutes of discussion,†analysts remarked.
Among other things, the report highlights that the expectations of the target group of a reduction in bureaucracy are high and that proposals in this area touch on the quality of the provision of service at Citizenship and Migration Board offices.
The largest group taking part in the debates in Tallinn, Tartu and Ida-Viru County was Russian citizens, while the number of American citizens was proportionally larger and the number of stateless citizens proportionally smaller than their overall representation among the population.
The organizers of the Open Forums on Integration and the authors of the final report are the politically independent organisations the Praxis Center for Policy Studies and the Institute of Baltic Studies (IBS). The project is being funded by the European Fund for the Integration of Third-Country Nationals, the Ministry of Culture and the ‘Our People’ Integration and Migration Foundation (MISA).

Report in Estonian Report in Russian Report in English

New Tax Calculator launched today shows individual contributions to state expenses (1/10/2013)

At Estonian taxpayers can now assess their personal tax burden. The calculator takes into consideration all personal expenses and income that influence the tax burden.
“We are used to looking at income tax  alone, or talk about the general tax burden of the state as ratio of GDP”, the portal developer Hille Hinsberg from Praxis says. “The current calculator takes into consideration taxes paid by the individual, as well as their employer (social insurance taxes) and taxes related to consumptionâ€, she explains.
“When we consume, we pay the VAT. When we pay for electricity, buy alcohol or tobacco products, we pay an additional excise tax. So a person’s income and the costs related to consumption are taxed at least twice and sometimes even three times. All these taxes combined form the real tax burdenâ€, says the expert.
In order to calculate the tax burden, one should insert the personal income (incl salary, dividends or pensions and estimate expenses related to consumption. The calculator then shows the individual tax burden based on the expenses and income, as inserted into equation.
“In return, we receive public services – those are stipulated by laws and decided upon by the Government and the Parliament. The calculator shows how the taxes we pay are used in policy cost areas in the state budgetâ€, Hinsberg says. Each tax payer can get a picture on his or her contribution – how the tax sum is spent on national defence, education, social care and other areas.
The calculator is part of the portal developed by Praxis. The aim is to provide an easy-to-understand overview of the state budget that lets people see how much money is spent during one year and what are the sources of revenue in the budget. is supported by the Open Estonia Foundation.

Praxis: People’s saving habits are seriously worrisome

The Praxis study presented today, on January 15, on behavioral aspects of saving in Estonia encourages people to focus more on long-term savings, and urges service providers to introduce unnoticeable saving measures and offer impartial finance counselling.
The study was inspired by the notion that Estonians’ expectations regarding maintaining their current living standard during their retirement age are high, whereas their present saving habits offer no guarantees that such expectations would be fulfilled.
“It is known that solidary social insurance system will not completely cover our expectations in the future, but people still to do not sense the magnitude of personal responsibilityâ€, Praxis Economic Policy Analyst Anne Jürgenson explains.
According to Jürgenson it is vitally important to raise people’s awareness on the importance of savings in relation to reduced social risks such as long-term health problems, inability to work etc. It can often happen that risks come into effect simultaneously and aging plays a relevant role here.
“Awareness raising alone is not enough, because even if people become informed, they do not always act accordinglyâ€, the analyst remarks. “In reality, the decision to save is in constant competition with the decision to consume and we all sense the social pressure to consume moreâ€, the think tank analyst noted and added that very often decisions to consume are made based on the desire to belong to a particular social group.
“Here the state could play a much bigger role- discuss the topic in the media, turn saving habits into an everyday discussion topic among people, make saving popular and valued by using more effective measures such as TV shows or finding speakers that are trustedâ€, Jürgenson explains.
The authors of the study also wish to introduce the so-called unnoticeable means of saving and offer impartial financial counselling. A simple and unnoticeable way to save would, for example, be the employer depositing part of the pay on payday directly to the employee’s savings account. The state could in turn create additional benefits that would motivate more employers to use the employer pension scheme.
According to pension study by the Swedbank Institute of Private Finances, Estonians feel that pensions should be circa 70% of the last salary. At the same time 1st and 2nd pillars of the pension fund provide only about 40% compared to income before retirement.
According to the manager of Private Finances Lee Maripuu, this means that there is a huge discrepancy between expectations and reality. “Not much is known about the state saving pension and it is also not widely trusted. When it comes to retirement, many people put their trust in non-monetary solutions such as relying on the support of relatives and ability to continue workingâ€, Maripuu mentioned other important details from the study and added that Estonians do not have a long-term saving strategy or financial buffers in cases of emergencies.
In the joint study of Praxis and Swedbank  on Behavioral aspects of saving and options of influencing Estonians’ saving habits representatives of different social groups (young people, parents, households with and without loans, elderly working people etc.) were interviewed and asked to assess their long-term saving habits and potential measures influencing saving behavior.
You can find the report here!

Anne Jürgenson
Economic Policy Analyst

New member of the Supervisory Board – Karsten Staehr (17/04/2013)

Karsten Staehr is a professor of international and public finance at Tallinn University of Technology and is also working as a part-time research supervisor in Eesti Pank. He has Danish nationality but has lived in Tallinn since 2006. Karsten holds a master degree in economics from the Massachusetts Institute of Technology, USA, and master and Ph.D. degrees in economics from Copenhagen University, Denmark. He undertakes research and policy analysis within public economics, international finance, monetary economics and transition economics. Karsten has previously worked at Statistics Denmark, the World Bank, Copenhagen University, Vilnius University, Bank of Norway, Tartu University, Bank of Finland and the Environmental Assessment Institute in Copenhagen.
“I am happy to join the supervisory council of Praxis. Praxis is the main think-tank in Estonia and is highly regarded in Estonia and abroad. It does a great job in analysing societal issues and in stimulating public debate. I believe that continued democratic, economic and social development in Estonia depends on informed policy-making and public participation, and Praxis plays a key role in these respects. I hope to contribute to the on-going processes of internationalisation and academic advancement at Praxis.â€