Mart Laar

Mart Laar
Prime Minister of Estonia
In office March 25, 1999 – January 28, 2002
Preceded by	Mart Siimann
Succeeded by	Siim Kallas
In office October 21, 1992 – November 8, 1994
Preceded by	Tiit Vähi (acting)
Succeeded by	Andres Tarand
Personal details
Born	April 22, 1960 Viljandi, Estonia
Political party	Union of Pro Patria and Res Publica

Mart Laar (born April 22 1960 in Viljandi) is an Estonian statesman and historian. He was the Prime Minister of Estonia from 1992 to 1994 and from 1999 to 2002.

Laar was a member of the right-of-center Pro Patria Union, which in 2006 merged with the more technocratic Res Publica Party. In addition to being a politician, Laar has written several books on Estonian and Russian history. He was also a history teacher in Tallinn, as well as the past president of Council of Historians of the Foundation of the Estonia Inheritance, the Society for the Preservation of Estonia History and the Society of University Students of Estonian. Laar graduated form Tartu University in 1983, and received his masters degree from the same university in 1995. Among his books are War in the Woods: Estonia's Struggle for Survival, 1944-1956. It is about all those who collaborated with Nazi and refused to live in the "workers paradise" and who continued to fight in the woods against the Soviet authority after Nazi Germany had been defeated. ISBN 0-929590-09-0

His installment as Prime Minister, by the Riigikogu on 21 October 1992, launched what is perhaps the single most dramatic transformation of a politician (even in purely physical terms) on the Estonian scene: Laar went from bespectacled young Turk with a bookish cachet as a heritage scholar, to a politician's politician, a somewhat senatorial figure -- in the Roman sense -- with appetites to match, and murky dealings that extended far out of Estonia's geopolitical realm. In a 1994 no-confidence vote, parliament removed Laar from office amid opposition accusations of lying to the people, following sale of billions of ruble banknotes collected during the Estonian monetary reform of 1992 to the cash-deprived Chechen Republic of Ichkeria instead of delivering them for free to Russian Federation, as the latter had demanded.

Five years later, in 1999, Laar returned to the post, with his main policy goals being to pull the economy out of a slump and lead the country toward the European Union. He remained in the post until he stepped down in 2002.

Many credit Laar for leading Estonia through lightning economic reforms that won Western praise and ultimately laid the groundwork for rapid economic growth and acceptance to European Union entry talks. It is also believed that Laar's economic reforms led to the Baltic Tiger period starting for Estonia after 2000. But the reforms were tough, and Laar was hurt by scandal concerning the ruble deal and by a multimillion-dollar Israeli arms purchase.

Political and economic Reforms

Laar’s reforms are referred to as the most thorough in the region and are occasionally used as a model for other transitions. The contributions to the study of transitions made by the Estonian reforms are often categorized as mainly three: lustration, economic reforms and geopolitical reorientation.

Economic reforms

Estonia benefited from hindsight, in that its transition came two years after the transitions in the other former Soviet satellites of Central Europe. Estonia was able to implement many of their lessons while seemingly avoiding pitfalls. Three innovations to the study of economic transitions stand out:

• Hybrid privatization. By combining the Hungarian and Treuhand models on the one hand, with the Czech voucher privatization program on the other, Estonia implemented a hybrid privatization system which was perceived as both just and efficient while avoiding the pitfalls of the earlier models. Laar’s director of privatization was Jaan Manitski, a Swede-Estonian and former manager of the Swedish pop group ABBA.
• Flat tax. Estonia under Laar was the first country to implement a flat tax, which was partially emulated by some other countries, including Latvia, Lithuania, Russia, Slovakia, Ukraine, Romania and others. Russia, for example, dramatically increased tax collection revenues while slashing tax rates. Laar claims the only book on economics he had read before becoming prime minister at the age of 32 was Free to Choose by Milton Friedman, although according to his autobiography he is a Conservative, not a Libertarian.
• Banking reform. Laar implemented harsh banking reform by encouraging the bankruptcy of banks suspected of having been taken over by the mafia. Though the International Monetary Fund at the time criticized this policy (as they did the Estonian policy of leaving the ruble zone in 1992), it was proven successful as Estonia did not suffer a banking crisis later as other transition countries did (even the Czech Republic). After 2000, the Yugoslavian reformers applied this same policy.

Geopolitical reorientation

Estonia also became a case study in "escaping geography". From near total dependence on Russia for trade, by 2004, trade with that country was less than 4% of the total. Estonia since 2004 is a full member of both the European Union and NATO.

Recognition and criticism

The results of the radical reforms have been recognized by Transparency International (which ranked Estonia the least corrupt country in the post-communist region), the Heritage Foundation / Wall Street Journal (whose index qualified Estonia as the most economically free in all of Europe), and the United Nations Development Program (whose Human Development Index measured Estonia’s rapid rise in such quality-of-life parameters as education, health, income and environment). On the other hand, serious criticism both within Estonia and abroad has focused on the harsh social effects of the reforms (to which Laar admits), rash privatizations and economic measures that actually did not increase economic productivity and were innovation-unfriendly, and other drawbacks.

It may be said that, especially from the outside, the evaluation of Laar's performance and heritage mainly depends on the evaluators' econo-political outlook, but that the evaluation of his tenure generally tends towards the positive. Many of the social and economic problems attributed to Laar's rapid form of transition can also be found, and to greater degrees, in more gradual post-communist transition cases as well.

Recent activities

Laar has been involved in assisting and counseling other democratic activists and reformers in the region and beyond, including in Yugoslavia (before 2000), Moldova, Ukraine (before 2004), Mexico (after its own transition in 2000) and Cuba (the Miami-Dade city council in Florida enacted a "Mart Laar Day" in 2003). Together with Václav Havel, Filip Dimitrov, Árpád Göncz, Petr Pithart, Vytautas Landsbergis, Patricio Aylwin and other transition leaders, he participates in the International Committee for Democracy in Cuba.

In 2003, Laar received the Wharton Infosys Business Transformation Award for his contributions to the development of the electronic systems in Estonia.

After the Rose Revolution in Georgia, Laar became advisor to President Saakashvili and assisted his government in carring out radical liberal reforms.

Laar was the 2006 recipient of the Cato Institute's Milton Friedman Prize for Advancing Liberty which is awarded biannually to "an individual who has made a significant contribution to advancing human freedom."

In September 2006, Laar announced that he will come out of political retirement to run for the candidacy for Prime Minister of the new Union of Pro Patria and Res Publica party.

In January 2007, it was announced that Mart Laar would become a Mont Pelerin Society member.

References

• Laar's biography for the Friedman Prize

External links

• The Baltic Tiger: How Estonia Did It (Conference at UFM, Guatemala)