Mart Laar

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 (1960-04-22) (age 51)
Viljandi, Estonia
Political party Union of Pro Patria and Res Publica
Alma mater University of Tartu
Nickname(s) Mõmmibeebi (Teddybear)

Mart Laar (born April 22, 1960) is an Estonian statesman, historian and a founding member of the Foundation for the Investigation of Communist Crimes.[1] He was the Prime Minister of Estonia from 1992 to 1994 and from 1999 to 2002,[2] and is the leader of the conservative party Union of Pro Patria and Res Publica. Mart Laar is credited with having brought about Estonia’s rapid economic development in the 1990s.[3]

On 6 April 2011, Mart Laar became Minister of Defence in the cabinet of Prime Minister Andrus Ansip.[4]



Mart Laar was born in Viljandi. He studied history at the University of Tartu and graduated in 1983, he received his Master's degree in Philosophy from the same university in 1995 and his Doctorate in 2005. Laar worked as a history teacher in Tallinn, and was the past presidents of Council of Historians of the Foundation of the Estonia Inheritance, the Society for the Preservation of Estonia History and the Estonian Students' Society. As a professional historian Laar has written many books on Estonian and Soviet history, among them his book War in the Woods: Estonia's Struggle for Survival, 1944–1956 a work about the Forest Brothers anti-Soviet resistance movement.

Laar's political career began when he became a member of the conservative Pro Patria Union party (which later merged with the more technocratic Res Publica Party in 2006). He was elected prime minister by the Riigikogu on 21 October 1992, launching what were perhaps the most thorough economic reforms in the post-Soviet space.[5]

In the 1994 no-confidence vote Laar lost the office due to several scandals after which some members of the coalition withdrew their support to the Prime minister.[6] The scandals included the aspects of an arms deal contract with Israel; disagreements about political allies in the opposition, and the sale of banknotes in the amount of 2.3 billion Soviet rubles,[7] withdrawn from circulation during the Estonian monetary reform of 1992, to the breakaway Chechen Republic of Ichkeria by Laar's associates at an Estonian company, Maag, which was done without consulting the Estonian Parliament.[8][9][10][11]

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.

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.[12]

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.[13] 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. His primary advisor on privatization was the German economist Herbert B. Schmidt[14]
  • 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,[15] 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

The geopolitical reorientation of Estonia was followed by changes in international economic relations. Estonia went from near total dependence on the Soviet Union for trade before 1991[16] to a large decoupling of trade with Russia by 2007, Russia being about 9% of its total trade (4th largest trade partner). Since 2004, Estonia is a full member of both the European Union and NATO. In 2007, the EU accounted for 70% of Estonia's exports and 78% of its imports, while the share of the CIS countries were accordingly 11% and 13%.[17]

Trade with countries of the former Soviet Union, mainly with Russia and fellow EU members Latvia and Lithuania, made up about a quarter of Estonian foreign trade in 2007.[17]


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), 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), and the Cato Institute, which awarded Laar the Cato Institute's Milton Friedman Prize for Advancing Liberty in 2006.[18]

The Acton Institute awarded Dr. Laar their Faith & Freedom Award on October 24, 2007.

The World Bank's Doing Business project has several times recognized Estonia as the top reformer in improving the business environment. Estonia is currently ranked 17 (of 178 economies) on the ease of doing business index.

Mart Laar has been appointed to the Advisory Board of the European Association of History Educators (EUROCLIO). He is also a member of the international advisory council of the Victims of Communism Memorial Foundation.[19]

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.

Laar and Mikheil Saakashvili at the European People's Party summit in 2010

Laar is a member of the International Council of the New York-based Human Rights Foundation.

Minister of finance of Finland Jyrki Katainen, Mart Laar and the chancellor of Germany, Angela Merkel in the EPP Summit of 2010

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 the country's President Mikheil Saakashvili and assisted his government in carrying out radical liberal reforms.

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.

On 26 May 2007 he was elected a Chairman of the Union of Pro Patria and Res Publica.

Relationship with the media

In 1994, the Estonian Newspaper Association declared Laar the Year's Press Friend. This was the first time this award was given; since that, it has been a yearly occurrence.[20]

Interestingly, in 2001, Laar was given the complementary award and titled the Year's Press Enemy.[21]

Published works


  1. ^ The Wall street Journal; August 7, 2008; Page A13
  2. ^ Europe Review 2003/04: The Economic and Business Report By World of Information ISBN 0749440678
  3. ^ Braithwaite, Rodric (2008). "Misreading Russia". Survival (Routledge) 50 (4): 169–176. doi:10.1080/00396330802329097. 
  4. ^ Baltic Voices: Atlantic Council: Mart Laar becomes Estonia's new Defense Minister, April 7, 2011, Jorge Benitez
  5. ^ Magnus Feldmann, "Free Trade in the 1990s: Understanding Estonian Exceptionalism," Demokratizatsiya, Fall 2003
  6. ^ Hare, P. G; Judy Batt, Saul Estrin (1999). Reconstituting the Market. Routledge. p. 205. ISBN 9057023296. 
  7. ^ Smith, David James (2002). The Baltic States. Routledge. p. 91. ISBN 0415285801. 
  8. ^ Sebastian Smith, Allah's Mountains, Tauris Parke Paperbacks, 2005, p.132, ISBN 1850439796
  9. ^ Baltic Voices: Estonia: the Constitutional Framework
  10. ^ The Baltic Course: "Estonian rubles traced to Chechnya"
  11. ^ (Estonian) Eesti Päevaleht 3 January 2005: "Kõvemad mehed kui Leedo: Marcel ja Tiit" by Marii Karell
  12. ^ See "'Just Do It': Interview with Mart Laar," Demokratizatsiya, Fall 2003,
  13. ^ "The Baltic Tiger: how Estonia did it" Conference at Francisco Marroquin University. Guatemala, September 2006
  14. ^ Privatization in Developing Countries, John Nellis, SAIS Review, Vol. 27, No. 2, 2007.
  15. ^ Walking on Water: How to Do It, 27 August 2005
  16. ^ Romuald Misiunas, Rein Taagepera, The Baltic States: Years of Dependence, 1940–1990, University of California Press, 1993, ISBN 0520082273
  17. ^ a b Last year the growth of exports and imports slowed down
  18. ^ Mart Laar's Biography at the Cato Institute.
  19. ^ "International Advisory Council". Victims of Communism Memorial Foundation. Archived from the original on 2011-05-20. Retrieved 2011-05-20. 
  20. ^ (Estonian) Eesti Ajalehtede Liit 3 December 1998: Ajalehtede Liit valis viiendaks pressisőbraks president Meri
  21. ^ (Estonian) Eesti Ajalehtede Liit 6 December 2001: 2001. aasta pressisőbraks valiti Ingrid Rüütel

External links

Political offices
Preceded by
Tiit Vähi
Prime Minister of Estonia
Succeeded by
Andres Tarand
Preceded by
Mart Siimann
Prime Minister of Estonia
Succeeded by
Siim Kallas
Preceded by
Jaak Aaviksoo
Defence Minister of Estonia
Succeeded by

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