Cold and hungry, Estonia clings to its free standing

THE BALTIMORE SUN

TALLINN, Estonia -- Five months after declaring independence, the people of this Baltic state are teetering on the brink of economic collapse and political crisis.

Fuel oil has almost run out -- many homes have no hot water, and heat has been cut back to a cool 60 degrees Fahrenheit. City officials have begun drawing up plans to evacuate most of Tallinn to the countryside, where people can warm themselves with wood fires.

The country has eaten its last crust of white bread, and black bread is rationed at two slices a day per person. Milk is down to a trickle, available only for children 3 years and younger.

The government, accused of retreating into conservatism in the face of economic distress, resigned Thursday.

Here in tiny Estonia, the future has already arrived. This Baltic nation was among the first of the 15 Soviet republics to proclaim independence and the first to free prices. What and how it endures holds important lessons for the rest of the former Soviet Union.

"It's two to three times worse than anyone imagined it would be," says Ivi Proos, an economist and former government adviser.

Estonians are paying dearly for independence, but they are far from giving up. No one seems to know quite how, but everyone seems convinced they will find some way out.

"Freedom," says Ants Promann, manager of a huge Tallinn bread factory, speaking the word almost reverently. "When we started singing revolution, we said we were ready to eat potato peels to get our freedom. For freedom, we are ready to do that."

Despite ethnic tension, political wavering and too little nourishment, Estonia is holding together. People talk, work and shop with gritty determination. They have already accomplished far more than they would have dreamed possible, even a year ago.

"I feel free," Ants Kaevand, a 33-year-old laboratory technician, says quietly. "It's a good feeling. It's worth the suffering."

When they talk about the last 50 years, Estonians almost invariably describe their country as being held captive by the Soviet Union.

Removing the economic shackles, says Jaak Leimann, Estonia's minister for the economy, was bound to be painful.

"We lived in a closed up world and had a different price scale," Mr. Leimann said in an interview just before he resigned in the dispute that forced the prime minister out. "Now in a way we are prisoners of yesterday."

Fifty years of Russian colonization and occupation left the country dangerously dependent on the Soviet empire, barely able to stand on its own.

After the Soviet Union seized Estonia and its Baltic neighbors, Latvia and Lithuania, in 1940, it turned on end what had been a nearly self-sufficient economy.

Moscow had its own vision for Estonia, building huge factories here and shipping in thousands of Russians to work in them.

That immigration has left a legacy of ethnic tension. Before the war, the population was 88 percent ethnic Estonian. That slipped to about 60 per cent. Most Russians are not assimilated; most do not speak Estonian. Many Estonians resent them enormously.

Moscow enthusiastically exported its ideology, too, firmly installing communism.

"The problem is, people forgot how to work," says Mr. Kaevand, the laboratory worker.

Underneath the surface, the Soviet system had been falling apart for years.

It had been living off its oil, selling it for hard currency and using the dollars to buy wheat from Canada and the United States.

Estonia had the advantages of buying fuel and wheat from the Soviet Union very cheaply, but paid by sending 95 percent of its exports there.

Finally, the same lassitude that sapped the rest of the economy diminished Russia's oil production; it can't afford to buy much wheat, and it certainly can't sell oil cheaply. Even if the Baltics had remained part of the Soviet Union, Moscow would have had trouble keeping up the supplies. Moscow has even less incentive to help out such fully independent states.

"We are such a little country," said Mr. Promann, the energetic manager of Tallinn's Leibur bread factory, "that the sinking took us, too."

Estonians draw some hope from the knowledge that, unlike Russians, they have not forgotten what it is like to own property and work for themselves. And Estonia is small enough -- approximately 1.6 million people in an area the size of Maryland ++ and New Jersey -- that the individual can still make a difference.

"When Estonia was free," Mr. Promann said, "my grandmother owned a bakery. The Russians came and took it over. We're left with only pictures of it. This is what Russia did to us."

When Mr. Promann decided he wanted to become a baker, too, he had no choice but to become an employee of the state.

But the grandmother's entrepreneurial spirit still flickers in the grandson. Another state employee might be content to sit back and bemoan the lack of flour. After all, less flour means less bread to bake, and there's no pay incentive to produce more.

Not Mr. Promann. He's had his fax machine humming, transmitting entreaties. Has the flour been loaded? Is the train under way?

"The Soviet railway," he sighs. "That's another opera."

Leibur produces 40 percent of Estonia's bread -- more than 100,000 loaves a day are baked in the four-story red brick building on the edge of Tallinn.

Since Russia stopped sending wheat, Mr. Promann has tried to make deals with independent suppliers. "It's very risky," he said. "There are many dealers who sell just air. The old system has vanished, and the new one doesn't work yet."

Still, Mr. Promann is confident that somehow it will work again. He is hopeful that new trade agreements can be worked out with Russia.

"We trust [Boris] Yeltsin," he said. "We can accept his word. Gorbachev was representing the Soviet Union. Yeltsin is leading Russia. He has chosen unpopular and risky ways because he understands there is no other way out."

Estonia's government fell last week precisely because it was trying to find a safe way out of the economic crisis. The prime minister, Edgar Savisaar, had managed to persuade Parliament to decree a state of emergency so he could impose direct controls over the economy.

But support for this approach quickly eroded. Critics said that Mr. Savisaar, who was a member of the Communist Party until 1990, was trying to revert to the old command economy.

Western consultants said the only way to save Estonia was to throw it open to the market and let the market sort the future out.

Privately, Western diplomats said that Mr. Savisaar was moving far too slowly on economic reforms. They predicted that Estonia would sink deeper into crisis if he remained.

Estonia's Parliament, which favors privatization, passed an ownership law promising to return property to citizens who owned it before 1940. But no rules were established to settle competing claims. And many other practical details have been ignored: There's no way to transfer a title, for example.

"It's politically very popular to say everyone will get something for their socialistic suffering," said Ms. Proos, "but it doesn't work."

She would like to see land sold off, and quickly.

"What will happen in the spring?" she asks. "Collective farmers ,, won't want to plant seeds if they don't know who owns the land. It all could get much worse before it gets better."

People like Mr. Promann are eager for faster privatization. "What we have now is a camel with a cow's head," he said.

Somehow, though, Estonia is determined to save itself, and there are signs of promise.

Estonia has managed to save part of its past in the beautiful city of Tallinn. The capital was never "Sovietized" as severely as other cities.

Much of the Germanic heart of the city still stands, and there are fewer of the depressing, deteriorating apartment blocks than elsewhere in the former Soviet Union. Tallinn is clean and well kept, full of graceful elegance compared to dog-eared Moscow.

Small hard-currency stores have sprung up about this city of about 600,000 people. They are like bright dots around the city, beckoning with American baby food, European clothing, cosmetics.

There are more such stores here than in Moscow, and anyone lucky enough to have dollars can find just about anything in Tallinn.

Like crocuses promising spring, these little shops offer hints of something better for the future.

By the end of the week, the European Community had decided to send 2,000 tons of wheat flour to Estonia.

Finland had agreed to lend enough oil to last Estonia a month, and economists were hoping that would buy enough time to find other solutions and avoid the evacuation of Tallinn.

Politicians were trying to put a new government together to press on with reform.

"Strategically I think we can find a way," said Mr. Leimann, the former minister for the economy, "but tactically we haven't found it yet."

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