Vahtras says war fears are delaying foreign investment decisions

Estonian Economy Minister Liina Vahtras said in an interview with ERR’s Aktuaalne kaamera that warnings about the danger posed by Russia have strengthened Estonia’s foreign-policy credibility but made foreign investors more cautious and lengthened their decision-making process.

“Our message must be that we are prepared, we know what we are doing and we have the necessary capabilities,” Vahtras said. She added that the state could help explain what Estonia has done, why it can still be trusted and that the country is protected.

Vahtras said the Enterprise and Innovation Foundation had seen foreign investors take longer to make decisions. She said concerns about war affected not only consumer decisions in Estonia but also investment choices abroad.

Asked about the future of traditional industry, Vahtras said companies needed to move more decisively towards automation, digitalisation and the use of artificial intelligence. Rising prices and wages, also influenced by tax increases, have made production more expensive, she said.

Businesses have shown strong interest in support measures, according to Vahtras. She said the foundation had received many applications and substantial requests for an innovation loan. An artificial intelligence support measure was closed in less than an hour after more than 200 applications were submitted.

Vahtras said she could not yet specify what her ministry might cut from the new budget because she had not reviewed it. She noted that substantial cuts had already been made in the area administered by the Ministry of Economic Affairs and Communications in previous years.

Regarding her political future, Vahtras said she would do her best to stand in the elections and seek a mandate from voters. If she did not receive one, she said she would have to find new challenges.