Estonia’s Islands at the Dawn of the 21st Century – Falling Behind or Coping?
As a whole, the structure of the islands’ economy is often one-sided and very vulnerable, the level of the working population’s skills is lower and there is less innovation than in other regions, the range of public services is limited and the price level is higher.
The unfavourable conditions – a product of geographic position and historical factors – have in the regional policy of many countries raised the question of whether islands need special treatment. Even though the European Union acknowledges in its primary law that the state of being an island is a permanent structural deficiency, in EU regional policy, being island-like is not in itself a factor that conditions aid. Nevertheless, a number of member states (such as Finland) apply insularity to their island regions, which means they use political measures to compensate for the structural deficiency. In this area, the Permanently Inhabited Small Islands Act which entered into force in 2004 is the most important. In the conditions of the positive economic climate seen in recent years, the Act has contributed to many positive shifts in the situation facing small islands. Rural municipalities that have islands have through additional state assistance supported retained connections with the small islands, made investments into ports and roads and organized waste handling. In spite of all of this, the permanent settlement on small islands has continued to decline and there has not been major development in the area of employment and enterprise. The economy of Estonia’s large islands (Saaremaa, Hiiumaa, Muhu) has grown used to being insular and there does not appear to be a development gap on an Estonian scale.