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Public lecture at the Akaki Tsereteli University, Kutaisi

02.11.2017

Excellences, ladies and gentlemen,

To start with, I would like to convey my appreciation for the possibility to speak to this audience today, at the last day of my State Visit to Georgia. I firmly believe that in addition to the official meetings, tête-à-tête talks, press points and interviews, it is equally important to reach out to the wider public as well. It is an honour to be in the Akaki Tseretli University in Kutaisi.

In the former capital city of United Georgia. In the city that holds a distinguished place in Georgia with is cultural, educational and business traditions.

Kutaisi and Estonia are geographically far from each other but we are closer than many would imagine. Your hometown has good relations with our university town Tartu. I was for 5 years Chairman of the Board for Tartu University, that's why I know - Estonia and Tartu were very much valued in Georgia almost 200 years ago.

Prince and poet Grigol Orbeliani suggested in 1830s to his nephew, the great Georgian poet Nikoloz Baratashvili to study in the University of Tartu that was well known for its free spirit and good education.

This free spirit was back then seen as something contemporary and forward-looking. Tartu was well known for it then and Estonia today. So the link is there. It is spiritual and future orientated.

I am pleased that the audience in front of me is comprised mostly of young people as the future of your country is in your hands. Majority of you have been born after Georgia regained its independence. You have grown up in a society that has had tough and turbulent times. Nevertheless, you are lucky and privileged to have had the opportunity to grow up and to be educated in a free country and democratic society.

You might take all this for granted. You should not. We should not. Instead, we have to constantly guard these freedoms, speak out and defend them, as these are the cornerstones of every society.

I will use this lecture to give you a brief overview of Estonia's reform process since 1991. But before we talk about technical reform effort, I have to stress the most important of all – you may dream up brilliant economic model upgrades, appetising investment support for foreign capital, no-strings-attached privatisation process, but it will all lead to nothing unless you guarantee the rule of law and fundamental rights. All else fails unless people and businesses, your own and foreigners alike, are convinced of the fairness of the state. Of fair treatment of capital, of respect for human rights and freedom of speech.

There is no case of successful and sustainable reform globally without a sound basement of respect for the rule of law and democratic values. To put it very clearly – every person and business entity, never mind how poor or badly connected, might have a chance to take the state itself to the court and win. This is the cornerstone for success in reform processes looking to deliver better future, from economic prosperity to foreign and security policy.

What future has us to offer depends very much of the decisions we have made in the past or are about to make. One of the most important historical lessons we learned after regaining independence was the realisation that we must integrate into Europe and to the wider international system. Of course, we also realised how important it is to be at the table, not on the menu. But that was not the main reason, in fact. The main reason was to sustain the results of our reforms for ever.

It is crucial to recognise that we did not reform to become members of international clubs. We knew we wanted to become a liberal, democratic country – everything the USSR was not. And we needed the integration into international like-minded networks to make the liberal, democratic values and rule of law sustainable. That even if our democracy might one day deliver leaders with more autocratic or freedom-limiting approach, the international obligations and agreements, belonging to western value-based organisations, would hold us on the right course. We did not think we will see it in merely 20 years' time that some European countries might start doubting liberal democratic values, but of course we recognised that eventually this might be the case.

And where the plague strikes, you never know. It could have been us, you are always only one election round away from bringing illiberal values to power, especially if the world is unpredictable. People may become afraid of the future and prefer to deliver support for those parties who promise to take the decisions for them, not force them to manage the world themselves as they best can, with support for the worst accidents of life, of course, as a European social model would foresee. And then it takes only about two election cycles to cement illiberalism in a society, as with curbed media freedom and judicial independence, perpetrating illiberal rule is strikingly easy.

As you here all know – the USSR was a repressive state that aspired to control peoples 'minds and severely restricted economic freedoms, freedom of movement of people and media freedom. The course for us in 1991 was therefore automatically set – a U-turn, a 180 degrees change, total freedom for everybody to act in Estonia, membership of international organisations which would extend these freedoms for our people across our own boarders, to the whole continent and globally as much as possible.

We realised as well that in addition to insure our freedoms, we must think of the times when our neighbourhood could again become a serious element of risk. Again, we did not predict it will happen so soon that Russia will turn off the democratic development path so rapidly and become unpredictable when its own internationally given promises are concerned. We were quite sure we will have for foreseeable future a Russia on the same development path as us. It was a nascent democracy getting ready to liberalise its economy, as we all were at that point.

But even then, with high hopes for our neighbourhood in general, we realised that in long perspective, if we wish to preserve our independence, we must be able to sit at those negotiation tables where the decisions essential for us are made, and that we must have the right to have our say at these discussions and debates.

We took to building our state with the utmost seriousness and great enthusiasm and never had a doubt about direction we had taken or the achievability of our objectives. We wanted to make Estonia better and after 50 years behind the Iron Curtain, to prove to ourselves and others that we belong to Europe. Thinking back it is interesting to notice that even if elections came and went, prime ministers at power changed, coalitions formed and broke, the direction of movement – towards the EU and NATO – was never questioned. Even at the brink of joining the EU, at the eve of the referendum for joining, there was only one party which was ambiguous about joining, everybody else was for it. We now have a Eurosceptic party in the Parliament. Then there were no gamblers among political elite and no takers at the voters' side.

It all started with understanding the fundamental importance of democratic values and the rule of law. Respecting human rights and fundamental freedoms. It also meant building a society where all actors work together for a common goal. But it also meant that we needed to cut ties with the totalitarian past that was imposed on us.

The foundation for the restored independent Estonia was the new Constitution that was adopted in 1992 by popular vote. Its approval was a step to a new and unknown legal system. One of the most substantial part of the Constitution was the catalogue of fundamental rights and freedoms. This speaks for itself.

The Constitution created the necessary democratic framework. Within it, we had to make a choice between Presidential or parliamentarian systems. We opted for the parliamentarian one because we felt after the experiences of independent Estonia of late 1930s that participatory democracy allows more (political) groups to engage in shaping up the future of the country. But the institutional arrangement is only the basis. The substance comes at the end of the day from the citizens. And a strong civil society plays a big role here. Working together, binding the actors of civil society together with the government actors can make a difference. Civil society reacts in a timely manner, and to the exact problems, we are encountering.

Having laid stable foundations it was time to move on to reforms. But the driving force behind reforms can only be the people behind them. Estonia was fortunate to have also for the technical reforms the continuation of the political course. What one Government started, was continued, and not demolished, by the next one. Some felt more comfortable to go ahead with economic, some with social changes, some governments where quicker to move forward and some were a bit more careful about difficulties the change inflicted on people. But there was a national consensus on the road ahead. Civil servants had a plethora of reform proposals sitting in their drawers and with each new government they tried out which would fly and which need to wait. Governments actually changed quite often, the first ever full 4-year government we had was in office only from 2007 elections. It remains the only one, by the way, to this day. Some of the reforms meant making really tough and controversial decisions, but these were necessary from the rule of law point of view, like restoring the property rights of those people or their heirs whose property the USSR had nationalised.

The privatisation reform paved the way for the economic reforms to follow. We sought to privatise to foreign companies, in order to open new markets and get access to new technologies, rather than co-operatives of workers or former directors, who could have run the old technology selling to the eastern market, but not added really radically to the productivity. We joined WTO as quickly as possible, and went for no customs at all, no protectionism on our home market and full adaptation for enterprises with the international market prices. Even in agriculture, were we before joining the EU had a free market approach, which meant that for our farmers they had to be able to do their business with New Zealand milk prices, as this is the world market commodity price level for milk products on free markets.

We tried to keep all regulations as simple and with as little exemptions as possible. Hence the WTO customs tariff table with zeroes in every cell. At the end of the day for any of the reforms to be successful, it was necessary to guarantee the superiority of laws and the faith of the people to superiority of law. And we were not capable of applying complicated law, administer and control a system loaded with exceptions. We were careful not to overcomplicate things and let the people feel that an existing law might not simply apply because no one is able to make sure it does. Analysis of emerging countries clearly said it was the biggest risk to state's credibility besides corruption, and we strived to alleviate this risk by keeping things simple.

In general, we followed the policy of the so-called Washington consensus. The consensus as originally stated by Williamson included ten broad sets of relatively specific policy recommendations:

1. Fiscal policy discipline;

2. Redirection of public spending from subsidies toward broad-based provision of key pro-growth;

3. Tax reform, broadening the tax base and adopting moderate marginal tax rates;

4. Interest rates that are market determined and positive (but moderate) in real terms;

5. Competitive exchange rates;

6. Trade liberalization:

7. Liberalization of inward foreign direct investment;

8. Privatization of state enterprises;

9. Deregulation;

10. Legal security for property rights.

By the middle of 1990s, Estonia decided to make the State more effective through digital solutions. This jump to the future pushed the entire society to move on and made the reform processes even more successful. One of the first things on our digital agenda was actually addressed to schools – Tiger leap – but it was big enough to give a bigger push for the development of e-State and e-society. Georgia has been interested in our experiences in this field, we have done of lot of cooperation in the e-sphere / digital agenda for years, and we continue to do so.

Our digital society was born from two elements. One was poverty – with digital services and 24/7 open government offices we could grow our state and its support to our people much quicker than going the traditional way. The other was acute incomprehension why technologies already routinely used by private sectors in the western countries has absolutely no traction on government sectors. As Estonia does far less differentiation between public and private sectors than in western world in general, like labour code does not keep people from moving between sectors, this question came to the minds of many people, as lots of young professionals moved and still move freely between private and public jobs.

So we decided to run public sector as efficiently and as paper freely as more efficient companies even in Estonia were doing already. Our government meetings really went paperless, by a simple file management system pretty normal in many private firms at the turn of the century. We were deeply astonished how people from governments, including from very developed countries, looked at it completely in awe and asked questions like "who is helping ministers to manage this system"? We did not think twice about asking ministers to learn the system, no one in Estonia was considered too important to learn.

And then we went for digital signature, which all could use – bank for providing their services, state for its own and all other businesses as they pleased, too. But it was the banks and telecoms who convinced the government to take this step. Government was afraid that while there are very few public services yet online, people would question the value of their digital IDs, and the cost government had to accept to provide them. But banks and telcos promised they will be quick adapters and as most people use banking and telecom services, they could induce wide-spread use of digital IDs. They also partially financed the training programs for people and provided free online services for elderly people to make them use those.

Estonia was successful in implementing the reforms because we had made great progress economically, including improving the quality of life of our citizens. In addition our democratic development among Eastern and Central European countries was seen as very high. And on top of that, like I just mentioned, was our ability to create one of the first digital societies in the world. This paved the way for our euro- integration aspirations.

Joining the European Union and NATO would not have been possible without the hard decisions we made in the first years of our regained independence. Reintegration with the West was far from a walk in the park. It was first and foremost about putting our own house in order. In doing so, we used the best knowhow available. We perceived our integration process as an opportunity, as a blueprint for reform that should be used as vehicle of mobilization, not as an impediment or burden.

It would be an exaggeration to claim that the West was waiting for us with open arms. There were plenty of those who were convinced that eventually we would fall back into the Russian sphere of influence. It was inconceivable at the time that Estonia would be a member of the European Union and a NATO ally. But we decided to take our faith in our own hands.

Regarding the European Union, the main difficulty was to make necessary changes in our society in order to be able to join the Union. As to NATO, then the primary obstacle was NATO's lack of interest. Estonia was small, with relatively weak defence system and at the same time potentially problematic due to the neighbour in the east. Russia's attitude regarding our membership was not positive and that influenced the integration discussions. Quite a few elements might ring the bell for Georgia today.

It came as a surprise when in 1997 Estonia was among the first group of countries that was invited to start negotiations of EU membership. We were not among countries that could naturally expect it because we were a former Soviet republic and the knowledge about Estonia was rather limited. On top of that, there were issues with Russia from unsolved border question to claims about problems with ethnic minorities. But we had done our homework – statistic comes to mind – that showed that our reforms had led to the situations where based on objective criteria it would have been very difficult to exclude us from the so called chosen ones.

Our motto was – be better than Poland. We knew that Poland would never be excluded in any of the rounds. Therefore, we set the target of outdoing Poland on the criteria set to start accession process. Likewise, Georgia should not only be the frontrunner in the Eastern Partnership but also try to be better than some of the current candidate countries. In some respects, e.g. integrating with the Digital Single Market – I know – you are already doing that.

Two things our negotiators brought out when they looked back at our negotiation process with the EU. Convincing the EU to give up some of its approaches rooted in well-established procedures and models in order to achieve more flexibility and individual approach was a challenge. I see some parallels also today in Georgia-EU relations. Another thing we learned was to take advantage of all cooperation models offered, no matter how ambitious they seemed. Even joining the then 5th framework for scientific co-operation was not a risk free and universally supported decision – what if we were to get back less than we put in? Our scientists were self-assured that this will not happen. Government took the risk, based on their word. Beautiful elements of mutual trust of varied actors thus gradually moved us closer to our goal.

Sometimes we sought even more enhanced forms of integration than was prescribed by a given cooperation mechanism. I know that Georgia is also looking ways to further its integration process with the EU, be it stepping up dialogue on security and defence, associating with EU programmes and agencies or harmonising EU acquis beyond the AA/DCFTA requirements.

The Union has offered our people their long-awaited freedoms – freedom to travel, study, work, trade and do business freely with 28 European countries representing over 500 million people. Being a small, open and export-oriented economy, Estonia only stands to gain from the opportunity to freely trade on export markets.

Therefore, we have always supported the fundamental freedoms of the European Union: the principles of free movement of goods, services, capital and people. In addition to these four freedoms, our innovative e-state also considers the implementation of a fifth freedom – the free movement of data – to be of great importance. We are now seeking to expand the digital freedom what exists in Estonia to the whole EU – this is our pay back to our partners in Europe. They helped us and our citizens when we needed it. Now they need our help and support to digitally disrupt their societies. Yes, we are small, but as you know from chemistry, for a catalyst to be effective there does not need to be a lot of it. On five hundredth – the proportion of Estonians in the union - may be enough.

This year Estonia and Georgia celebrate the 25th anniversary of diplomatic relations since both our countries regained their independence. During these years, we have developed very close, substantial and friendly relations. These are based on shared values such as democracy, human rights and fundamental freedoms as well as the rule of law. These lay the foundation of our partnership and only when we continue to adhere to them in letter and spirit can we truly cooperate closely. We would like to see Georgia become a mature democracy. A country in which you no longer worry about democratic procedures, but instead about the future challenges of your nation. Substance, not form. Goals, not only means. After all, democracy is just a tool – what matters is what you do with it.

One of the topics that I have discussed with Georgian politicians during my visit has been Georgia-EU relations and Eastern Partnership in particular. One of the key priorities during our Presidency of the Council of the European Union.

Largely, our aim as Presidency in the Eastern Partnership has been twofold: to keep the EU's relations with its Eastern neighbours on EU's political agenda and to strengthen the policy framework as a whole. We all know there are plenty of issues that compete for EU's attention, therefore the role of Presidency in setting the priorities and accents becomes important.

I know that sometimes people criticize Eastern Partnership as being too rigid, one-size-fits-all or even a straightjacket. I would contest that view. Eastern Partnership has learned to offer a large degree of flexibility within the contours of the framework. For sure, it is not perfect, but considerably better after the last review of European Neighbourhood Policy. Furthermore, the EU is an embodiment of regional integration and takes such regional view also to its external relations. It is a way to get more political attention and more resources. These are definitely issues that cannot be overestimated.

The EU is also interested in success stories for its policies. Georgia has been able to stand out and it is clearly your interest to take advantage of such status. I would advise you to continue supporting Eastern Partnership and use it to both further integration with EU but also between the Partners.

Georgia is the front-runner among the Eastern Partnership countries. Your success has contributed to the stability and prosperity of the region and Europe as a whole. Your achievements may also inspire people in neighbouring countries to demand more results from their respective governments. Estonia is very impressed by your achievements and I encourage your country to continue with reforms, to promote democratic values and to improve the life for your people. An excellent example of your commitment to reform and how it pays off is gaining visa-free travel to the EU's Schengen Zone. So you see, reforms pay off.

Due to the truly excellent relations between our two countries, I am sure that you understand what I mean when I say that our expectations have grown. One thing is that as Georgia has become more successful, we expect more of you. The other is that there is fair criticism of some of the things that have happened in Georgia over the past years. It is very important that while attempting to re-establish justice, the principles of the rule of law do not suffer. We expect Georgia not only to remain committed to but also strengthen reforms that would ensure the stable development of society. A society that embraces a genuinely functioning civil society and opposition. Where the rights of minorities are guaranteed, as is the freedom of expression.

Further integration with both the European Union and NATO are the two goals that Georgia remains committed to. Of course, many within, and outside Georgia are not satisfied with the pace of this integration. But what is most important is that Georgia remains committed to these goals. Disagreements on details are fine, they are acceptable, they belong in a democracy. But these differences in approach must never be allowed to overshadow the fact that the whole of Georgia, the state and the society, the government and the opposition and the people are committed to a European and Euro-Atlantic future for Georgia. Being ready when the window of opportunity opens – and we know from experience that these openings are rare and do not last long – is crucial. We do not know when the moment will come and right now it may look hopeless, as the people of Europe have lost their courage to certain extent in the face of the global difficulties. We are fighting to revive that courage, as you can see, particularly some younger leaders like president Macron, but it may take some time. On the other hand, the Soviet occupation also started to look like it will never end, we started to quietly loose hope and get weary – and then the kaleidoscope of the history turned and there was our window of opportunity. Yours might also be painfully far or surprisingly close. You have to be ready for both options and when it arrives to act swiftly.

It all does not end with the membership in the club. Becoming an EU Member State or a NATO ally does not mean that you can relax and just let things go and watch. For the democratic stability to be in place and in order to keep the country on the democratic course, it is important to defend the principles of separation and balance of powers. Being in the EU does not mean that it is allowed to backtrack on rule of law and fundamental rights. Far from it. Moreover, civil society has an important role to the play here. Citizens who are able to think critically of the developments taking place in the world and to have a sober assessment of the situation. Citizens who are able to hold democratic values. Democracy and the plurality of thoughts require protection on a daily basis.

We have come a long way since first declared our independence in 1918 and restored it 26 years ago. Having physically and mentally broken away from the totalitarian imprisonment, we created for our citizens a State that was based on fundamental freedoms and the rule of law. It allowed us to embark on the reform road that was far from easy. But we did it for ourselves, not for anyone else. We were bold enough to see a few steps ahead. We looked into the future, not the past. We had a goal but not necessarily the road there. Visionary decisions, like the ones related to the IT, that might have felt bizarre for many at the time, allowed us to create a positive image in the world.

Even though times and challenges are different, Georgia has the same potential for great success to stand out and the possibility to achieve the same goals we once set. It requires though a solid foundation with democratic values and the rule of law that in turn creates the basis for the economic forms, allows for the civil society to prosper, to speak out if needed and to take together with the state the country forward. And all of the sudden, at one point in time, you will find that you have reached to the destination you set for yourself. And this is because you did it all for yourself. Not for the others. You will enjoy the fruits of the efforts and hard work.

Thank you!