340 million euro fund leaves Ida-Virumaa facing uncertain future

Ida-Virumaa has received support for new businesses and public projects, but questions remain about what will happen after the 340 million euro Just Transition Fund is spent, Erik Gamzejev, editor-in-chief of the Põhjarannik newspaper, writes in a commentary for ERR’s Vikerraadio.

A group of University of Tartu social scientists this week published some of their research findings through ERR’s Novaator portal. The study examines how satisfied residents of Ida-Virumaa are with their lives.

The research project, officially titled “Socio-economic well-being and labour force monitoring of Ida-Viru residents”, will continue for years and cost nearly 1.5 million euros. It is financed by the Just Transition Fund, which is intended to sustain life in Ida-Virumaa after the region’s main industry, oil shale, is effectively priced out of existence by European climate policy.

The survey results published so far offer little new information about residents’ expectations for the future. The main conclusion is that people will not leave the region if they can find decent-paying jobs, schools, healthcare and affordable opportunities to build a home. If those conditions are absent, they are more likely to leave. High unemployment and lower incomes increase insecurity and anxiety.

These findings would apply to most regions located farther from Tallinn and Tartu. Surveys of residents in southern or western Estonia would likely produce similar results, Gamzejev writes. Ida-Virumaa’s distinctive problem is that European Union carbon-trading rules have accelerated the negative trends caused by the decline of the oil shale industry.

The fund has supported numerous projects in Ida-Virumaa. The first stage of a magnet factory in Narva has been completed, while a nature spa has opened on the shores of Peipsi. Film studios are due to be completed in Jõhvi, companies are being established in a business park in Kohtla-Järve, and an oxygen plant is being built in Auvere.

Dozens of small businesses have used the funding to construct new buildings and purchase equipment. Local university colleges have also strengthened their position with the support. Municipalities have received funding as well. Alutaguse Municipality has renovated an old post office in Iisaku into a municipal government building, Jõhvi is building a new social welfare house, and Kohtla-Järve is giving new life to the Punamütsike kindergarten. The fund has also covered the costs of cultural festivals and sporting competitions.

Compared with the jobs and tax revenue previously provided by oil shale companies to local residents, municipalities and the state, the fund’s one-off support of 340 million euros remains only a decorative garnish, Gamzejev writes. The Just Transition Fund has proved a slower-acting painkiller than hoped.