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A developed country with an advanced, high-income economy and high living standards, Estonia ranks very high in the Human Development Index, and performs favourably in measurements of economic freedom, civil liberties, education, and press freedom (third in the world in 2012). Estonia has been among the fastest growing economies in the European Union and is a part of the World Trade Organization and the Nordic Investment Bank. Estonia is often described as one of the most internet-focused countries in Europe.
In the first centuries AD, political and administrative subdivisions began to emerge in Estonia. Two larger subdivisions appeared: the province (Estonian: kihelkond) and the land (Estonian: maakond). Several elderships or villages made up a province. Nearly all provinces had at least one fortress. The king or other highest administrative official elder directed the defense of the local area. By the thirteenth century Estonia consisted of the following provinces: Revala, Harjumaa, Saaremaa, Hiiumaa, Läänemaa, Alempois, Sakala, Ugandi, Jogentagana, Soopoolitse, Vaiga, Mõhu, Nurmekund, Järvamaa and Virumaa.
The Oeselians or Osilians (Estonian saarlased; singular: saarlane) were a historical subdivision of Estonians inhabiting Saaremaa (Danish: Øsel; German: Ösel; Swedish: Ösel), an Estonian island in the Baltic Sea. They were first mentioned as early as the second century BC in Ptolemy's Geography III. The Oeselians were known in the Old Norse Icelandic Sagas and in Heimskringla as Víkingr frá Esthland (Estonian Vikings). Their sailing vessels were called pirate ships by Henry of Latvia in his Latin chronicles written at the beginning of the 13th century.
Perhaps the most famous raid by Oeselian pirates occurred in 1187, with the attack on the Swedish town of Sigtuna by Finnic raiders from Couronia and Oesel. Among the casualties of this raid was the Swedish archbishop Johannes. The city remained occupied for some time, contributing to its decline as a center of commerce in the 13th century and the rise of Uppsala, Visby, Kalmar and Stockholm. The Livonian Chronicle describes the Oeselians as using two kinds of ships, the piratica and the liburna. The former was a warship, the latter mainly a merchant ship. A piratica could carry approximately 30 men and had a high prow shaped like a dragon or a snakehead and a rectangular sail. Viking-age treasures from Estonia mostly contain silver coins and bars. Saaremaa has the richest finds of Viking treasures after Gotland in Sweden. This strongly suggests that Estonia was an important transit country during the Viking era.
The superior god of Oeselians as described by Henry of Latvia was called Tharapita. According to the legend in the chronicle Tharapita was born on a forested mountain in Virumaa (Latin: Vironia), mainland Estonia from where he flew to Oesel, Saaremaa The name Taarapita has been interpreted as "Taara, help!"/"Thor, help!" (Taara a(v)ita in Estonian) or "Taara keeper"/"Thor keeper" (Taara pidaja) Taara is associated with the Scandinavian god Thor. The story of Tharapita's or Taara's flight from Vironia to Saaremaa has been associated with a major meteor disaster estimated to have happened in 660 ± 85 BC that formed Kaali crater in Saaremaa.
The capital of Danish Estonia (Danish: Hertugdømmet Estland) was Reval (Tallinn), founded at the place of Lyndanisse after the invasion of 1219. The Danes built the fortress of Castrum Danorum at Toompea Hill. Estonians still call their capital "Tallinn", which according to legend derives from Taani linna (meaning Danish town or castle). Reval was granted Lübeck city rights (1248) and joined the Hanseatic League. Even today, Danish influence can be seen in heraldic symbols. The Danish cross is on the city of Tallinn's coat of arms, and Estonia's coat of arms displays three lions similar to those found on the Danish coat of arms.
On St. George's Night (Estonian: Jüriöö ülestõus) 23 April 1343, the indigenous Estonian population in the Duchy of Estonia, the Bishopric of Ösel-Wiek and the insular territories of the State of the Teutonic Order tried to rid themselves of the Danish and German rulers and landlords, who had conquered the country in the 13th century during the Livonian crusade, and to eradicate the non-indigenous Christian religion. After initial success the revolt was ended by the invasion of the Teutonic Order. In 1346 the Duchy of Estonia was sold for 19,000 Köln marks to the Teutonic Order by the King of Denmark. The shift of sovereignty from Denmark to the State of the Teutonic Order took place on 1 November 1346.
From 1228, after of the Livonian Crusade, through the 1560s, Estonia was part of Terra Mariana, established on 2 February 1207 as a principality of the Holy Roman Empire and proclaimed by Pope Innocent III in 1215 as subject to the Holy See. The southern parts of the country were conquered by Livonian Brothers of the Sword who joined the Teutonic Order in 1237 and became its branch known as the Livonian Order. The Duchy of Estonia was created out of the northern parts of the country and was a direct dominion of the King of Denmark from 1219 until 1346, when it was sold to the Teutonic Order and became part of the Ordenstaat. In 1343, the people of northern Estonia and Saaremaa rebelled against German rule in the St. George's Night Uprising, which was put down by 1345. The unsuccessful rebellion led to a consolidation of power for the Baltic German minority. For the subsequent centuries they remained the ruling elite in both cities and in the countryside.
After the decline of the Teutonic Order following its defeat in the Battle of Grunwald in 1410, and the defeat of the Livonian Order in the Battle of Swienta on 1 September 1435, the Livonian Confederation Agreement was signed on 4 December 1435. The Livonian Confederation ceased to exist during the Livonian War (1558–82). The wars had reduced the Estonian population from about 250–300,000 people before the Livonian War to 120–140,000 in the 1620s. The Grand Duchy of Moscow and Tsardom of Russia also attempted invasions in 1481 and 1558, both of which were unsuccessful .
The Reformation in Europe officially began in 1517 with Martin Luther (1483–1546) and his 95 Theses. The Reformation greatly changed the Baltic region. Its ideas came quickly to the Livonian Confederation and by the 1520s were widespread. Language, education, religion and politics were transformed. Church services were now conducted in the vernacular instead of in Latin, previously used. During the Livonian War in 1561, northern Estonia submitted to Swedish control. In the 1560s two voivodeships of present-day southern Estonia, Dorpat Voivodeship (Tartu region) and Parnawa Voivodeship (Pärnu region), became the autonomous Duchy of Livonia within the Polish-Lithuanian Commonwealth, under joint control of the Polish Crown and the Grand Duchy. In 1629, mainland Estonia came entirely under Swedish rule. Estonia was administratively divided between the provinces of Estonia in the north and Livonia in southern Estonia and northern Latvia. This division persisted until the early twentieth century.
As a result of the abolition of serfdom and the availability of education to the native Estonian-speaking population, an active Estonian nationalist movement developed in the 19th century.[citation needed] It began on a cultural level, resulting in the establishment of Estonian language literature, theatre and professional music and led on to the formation of the Estonian national identity and the Age of Awakening. Among the leaders of the movement were Johann Voldemar Jannsen, Jakob Hurt and Carl Robert Jakobson.
On 14 June, while the world's attention was focused on the fall of Paris to Nazi Germany a day earlier, the Soviet military blockade on Estonia went into effect, two Soviet bombers downed the Finnish passenger aeroplane "Kaleva" flying from Tallinn to Helsinki carrying three diplomatic pouches from the US delegations in Tallinn, Riga and Helsinki. On 16 June, the Soviet Union invaded Estonia. The Red Army exited from their military bases in Estonia on 17 June. The following day, some 90,000 additional troops entered the country. In the face of overwhelming Soviet force, the Estonian government capitulated on 17 June 1940 to avoid bloodshed.
Most of the Estonian Defence Forces surrendered according to the orders of the Estonian government, believing that resistance was useless and were disarmed by the Red Army. Only the Estonian Independent Signal Battalion showed resistance to Red Army and Communist militia "People's Self-Defence" units in front of the XXI Grammar School in Tallinn on 21 June. As the Red Army brought in additional reinforcements supported by six armoured fighting vehicles, the battle lasted several hours until sundown. Finally the military resistance was ended with negotiations and the Independent Signal Battalion surrendered and was disarmed. There were two dead Estonian servicemen, Aleksei Männikus and Johannes Mandre, and several wounded on the Estonian side and about ten killed and more wounded on the Soviet side.
On 6 August 1940, Estonia was annexed by the Soviet Union as the Estonian SSR. The provisions in the Estonian constitution requiring a popular referendum to decide on joining a supra-national body were ignored. Instead the vote to join the Soviet Union was taken by those elected in the elections held the previous month. Additionally those who had failed to do their "political duty" of voting Estonia into the USSR, specifically those who had failed to have their passports stamped for voting, were condemned to death by Soviet tribunals. The repressions followed with the mass deportations carried out by the Soviets in Estonia on 14 June 1941. Many of the country's political and intellectual leaders were killed or deported to remote areas of the USSR by the Soviet authorities in 1940–1941. Repressive actions were also taken against thousands of ordinary people.
After Germany invaded the Soviet Union on 22 June 1941, the Wehrmacht crossed the Estonian southern border on 7 July. The Red Army retreated behind the Pärnu River – Emajõgi line on 12 July. At the end of July the Germans resumed their advance in Estonia working in tandem with the Estonian Forest Brothers. Both German troops and Estonian partisans took Narva on 17 August and the Estonian capital Tallinn on 28 August. After the Soviets were driven out from Estonia, German troops disarmed all the partisan groups.
Although initially the Germans were welcomed by most Estonians as liberators from the USSR and its oppressions, and hopes were raised for the restoration of the country's independence, it was soon realised that the Nazis were but another occupying power. The Germans used Estonia's resources for their war effort; for the duration of the occupation Estonia was incorporated into the German province of Ostland. The Germans and their collaborators also carried out The Holocaust in Estonia in which they established a network of concentration camps and murdered thousands of Estonian Jews and Estonian Gypsies, other Estonians, non-Estonian Jews, and Soviet prisoners of war.
Some Estonians, unwilling to side directly with the Nazis, joined the Finnish Army (which was allied with the Nazis) to fight against the Soviet Union. The Finnish Infantry Regiment 200 (Estonian: soomepoisid) was formed out of Estonian volunteers in Finland. Although many Estonians were recruited into the German armed forces (including Estonian Waffen-SS), the majority of them did so only in 1944 when the threat of a new invasion of Estonia by the Red Army had become imminent. In January 1944 Estonia was again facing the prospect of invasion from the Red Army and the last legitimate prime minister of the Republic of Estonia (according to the Constitution of the Republic of Estonia) delivered a radio address asking all able-bodied men born from 1904 through 1923 to report for military service. The call resulted in around 38,000 new enlistments and several thousand Estonians who had joined the Finnish Army came back to join the newly formed Territorial Defense Force, assigned to defend Estonia against the Soviet advance. It was hoped[by whom?] that by engaging in such a war Estonia would be able to attract Western support for Estonian independence.
In the face of the country being re-occupied by the Red Army, tens of thousands of Estonians (including a majority of the education, culture, science, political and social specialists) chose to either retreat with the Germans or flee to Finland or Sweden where they sought refuge in other western countries, often by refugee ships such as the SS Walnut. On 12 January 1949, the Soviet Council of Ministers issued a decree "on the expulsion and deportation" from Baltic states of "all kulaks and their families, the families of bandits and nationalists", and others.
Half the deported perished, and the other half were not allowed to return until the early 1960s (years after Stalin's death).[citation needed] The activities of Soviet forces in 1940–41 and after reoccupation sparked a guerrilla war against Soviet authorities in Estonia by the Forest Brothers, who consisted mostly of Estonian veterans of the German and Finnish armies and some civilians. This conflict continued into the early 1950s. Material damage caused by the world war and the following Soviet era significantly slowed Estonia's economic growth, resulting in a wide wealth gap in comparison with neighbouring Finland and Sweden.
Militarization was another aspect of the Soviet state. Large parts of the country, especially the coastal areas, were closed to all but the Soviet military. Most of the sea shore and all sea islands (including Saaremaa and Hiiumaa) were declared "border zones". People not actually residing there were restricted from travelling to them without a permit. A notable closed military installation was the city of Paldiski, which was entirely closed to all public access. The city had a support base for the Soviet Baltic Fleet's submarines and several large military bases, including a nuclear submarine training centre complete with a full-scale model of a nuclear submarine with working nuclear reactors. The Paldiski reactors building passed into Estonian control in 1994 after the last Russian troops left the country. Immigration was another effect of Soviet occupation. Hundreds of thousands of migrants were relocated to Estonia from other parts of the Soviet Union to assist industrialisation and militarisation, contributing an increase of about half a million people within 45 years.
The U.S., UK, France, Italy and the majority of other Western countries considered the annexation of Estonia by the USSR illegal. They retained diplomatic relations with the representatives of the independent Republic of Estonia, never de jure recognised the existence of the Estonian SSR, and never recognised Estonia as a legal constituent part of the Soviet Union. Estonia's return to independence became possible as the Soviet Union faced internal regime challenges, loosening its hold on the outer empire. As the 1980s progressed, a movement for Estonian autonomy started. In the initial period of 1987–1989, this was partially for more economic independence, but as the Soviet Union weakened and it became increasingly obvious that nothing short of full independence would do, Estonia began a course towards self-determination.
In 1989, during the "Singing Revolution", in a landmark demonstration for more independence, more than two million people formed a human chain stretching through Lithuania, Latvia and Estonia, called the Baltic Way. All three nations had similar experiences of occupation and similar aspirations for regaining independence. The Estonian Sovereignty Declaration was issued on 16 November 1988. On 20 August 1991, Estonia declared formal independence during the Soviet military coup attempt in Moscow, reconstituting the pre-1940 state. The Soviet Union recognised the independence of Estonia on 6 September 1991. The first country to diplomatically recognise Estonia's reclaimed independence was Iceland. The last units of the Russian army left on 31 August 1994.
Estonia's land border with Latvia runs 267 kilometers; the Russian border runs 290 kilometers. From 1920 to 1945, Estonia's border with Russia, set by the 1920 Tartu Peace Treaty, extended beyond the Narva River in the northeast and beyond the town of Pechory (Petseri) in the southeast. This territory, amounting to some 2,300 square kilometres (888 sq mi), was incorporated into Russia by Stalin at the end of World War II. For this reason the borders between Estonia and Russia are still not defined.
Estonia lies on the eastern shores of the Baltic Sea immediately across the Gulf of Finland from Finland on the level northwestern part of the rising East European platform between 57.3° and 59.5° N and 21.5° and 28.1° E. Average elevation reaches only 50 metres (164 ft) and the country's highest point is the Suur Munamägi in the southeast at 318 metres (1,043 ft). There is 3,794 kilometres (2,357 mi) of coastline marked by numerous bays, straits, and inlets. The number of islands and islets is estimated at some 2,355 (including those in lakes). Two of them are large enough to constitute separate counties: Saaremaa and Hiiumaa. A small, recent cluster of meteorite craters, the largest of which is called Kaali is found on Saaremaa, Estonia.
Estonia is situated in the northern part of the temperate climate zone and in the transition zone between maritime and continental climate. Estonia has four seasons of near-equal length. Average temperatures range from 16.3 °C (61.3 °F) on the Baltic islands to 18.1 °C (64.6 °F) inland in July, the warmest month, and from −3.5 °C (25.7 °F) on the Baltic islands to −7.6 °C (18.3 °F) inland in February, the coldest month. The average annual temperature in Estonia is 5.2 °C (41.4 °F). The average precipitation in 1961–1990 ranged from 535 to 727 mm (21.1 to 28.6 in) per year.
A maakond (county) is the biggest administrative subdivision. The county government (Maavalitsus) of each county is led by a county governor (Maavanem), who represents the national government at the regional level. Governors are appointed by the Government of Estonia for a term of five years. Several changes were made to the borders of counties after Estonia became independent, most notably the formation of Valga County (from parts of Võru, Tartu and Viljandi counties) and Petseri County (area acquired from Russia with the 1920 Tartu Peace Treaty).
Estonia is a parliamentary representative democratic republic in which the Prime Minister of Estonia is the head of government and which includes a multi-party system. The political culture is stable in Estonia, where power is held between two and three parties that have been in politics for a long time. This situation is similar to other countries in Northern Europe. The former Prime Minister of Estonia, Andrus Ansip, is also Europe's longest-serving Prime Minister (from 2005 until 2014). The current Estonian Prime Minister is Taavi Rõivas, who is the former Minister of Social Affairs and the head of the Estonian Reform Party.
The Parliament of Estonia (Estonian: Riigikogu) or the legislative branch is elected by people for a four-year term by proportional representation. The Estonian political system operates under a framework laid out in the 1992 constitutional document. The Estonian parliament has 101 members and influences the governing of the state primarily by determining the income and the expenses of the state (establishing taxes and adopting the budget). At the same time the parliament has the right to present statements, declarations and appeals to the people of Estonia, ratify and denounce international treaties with other states and international organisations and decide on the Government loans.
The Riigikogu elects and appoints several high officials of the state, including the President of the Republic. In addition to that, the Riigikogu appoints, on the proposal of the President of Estonia, the Chairman of the National Court, the chairman of the board of the Bank of Estonia, the Auditor General, the Legal Chancellor and the Commander-in-Chief of the Defence Forces. A member of the Riigikogu has the right to demand explanations from the Government of the Republic and its members. This enables the members of the parliament to observe the activities of the executive power and the above-mentioned high officials of the state.
The Government of Estonia (Estonian: Vabariigi Valitsus) or the executive branch is formed by the Prime Minister of Estonia, nominated by the president and approved by the parliament. The government exercises executive power pursuant to the Constitution of Estonia and the laws of the Republic of Estonia and consists of twelve ministers, including the Prime Minister. The Prime Minister also has the right to appoint other ministers and assign them a subject to deal with. These are ministers without portfolio — they don't have a ministry to control.
The Prime Minister has the right to appoint a maximum of three such ministers, as the limit of ministers in one government is fifteen. It is also known as the cabinet. The cabinet carries out the country's domestic and foreign policy, shaped by parliament; it directs and co-ordinates the work of government institutions and bears full responsibility for everything occurring within the authority of executive power. The government, headed by the Prime Minister, thus represents the political leadership of the country and makes decisions in the name of the whole executive power.
Estonia has pursued the development of the e-state and e-government. Internet voting is used in elections in Estonia. The first internet voting took place in the 2005 local elections and the first in a parliamentary election was made available for the 2007 elections, in which 30,275 individuals voted over the internet. Voters have a chance to invalidate their electronic vote in traditional elections, if they wish to. In 2009 in its eighth Worldwide Press Freedom Index, Reporters Without Borders ranked Estonia sixth out of 175 countries. In the first ever State of World Liberty Index report, Estonia was ranked first out of 159 countries.
According to the Constitution of Estonia (Estonian: Põhiseadus) the supreme power of the state is vested in the people. The people exercise their supreme power of the state on the elections of the Riigikogu through citizens who have the right to vote. The supreme judicial power is vested in the Supreme Court or Riigikohus, with nineteen justices. The Chief Justice is appointed by the parliament for nine years on nomination by the president. The official Head of State is the President of Estonia, who gives assent to the laws passed by Riigikogu, also having the right of sending them back and proposing new laws.
Estonia was a member of the League of Nations from 22 September 1921, has been a member of the United Nations since 17 September 1991, and of NATO since 29 March 2004, as well as the European Union since 1 May 2004. Estonia is also a member of the Organization for Security and Cooperation in Europe (OSCE), Organisation for Economic Co-operation and Development (OECD), Council of the Baltic Sea States (CBSS) and the Nordic Investment Bank (NIB). As an OSCE participating State, Estonia's international commitments are subject to monitoring under the mandate of the U.S. Helsinki Commission. Estonia has also signed the Kyoto Protocol.
Since regaining independence, Estonia has pursued a foreign policy of close co-operation with its Western European partners. The two most important policy objectives in this regard have been accession into NATO and the European Union, achieved in March and May 2004 respectively. Estonia's international realignment toward the West has been accompanied by a general deterioration in relations with Russia, most recently demonstrated by the protest triggered by the controversial relocation of the Bronze Soldier World War II memorial in Tallinn.
Since the early 1990s, Estonia is involved in active trilateral Baltic states co-operation with Latvia and Lithuania, and Nordic-Baltic co-operation with the Nordic countries. The Baltic Council is the joint forum of the interparliamentary Baltic Assembly (BA) and the intergovernmental Baltic Council of Ministers (BCM). Nordic-Baltic Eight (NB-8) is the joint co-operation of the governments of Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. Nordic-Baltic Six (NB-6), comprising Nordic-Baltic countries that are European Union member states, is a framework for meetings on EU related issues. Parliamentary co-operation between the Baltic Assembly and Nordic Council began in 1989. Annual summits take place, and in addition meetings are organised on all possible levels: speakers, presidiums, commissions, and individual members. The Nordic Council of Ministers has an office in Tallinn with a subsidiary in Tartu and information points in Narva, Valga and Pärnu. Joint Nordic-Baltic projects include the education programme Nordplus and mobility programmes for business and industry and for public administration.
An important element in Estonia's post-independence reorientation has been closer ties with the Nordic countries, especially Finland and Sweden. Indeed, Estonians consider themselves a Nordic people rather than Balts, based on their historical ties with Sweden, Denmark and particularly Finland. In December 1999, then Estonian foreign minister (and since 2006, president of Estonia) Toomas Hendrik Ilves delivered a speech entitled "Estonia as a Nordic Country" to the Swedish Institute for International Affairs. In 2003, the foreign ministry also hosted an exhibit called "Estonia: Nordic with a Twist".
In 2005, Estonia joined the European Union's Nordic Battle Group. It has also shown continued interest in joining the Nordic Council. Whereas in 1992 Russia accounted for 92% of Estonia's international trade, today there is extensive economic interdependence between Estonia and its Nordic neighbours: three quarters of foreign investment in Estonia originates in the Nordic countries (principally Finland and Sweden), to which Estonia sends 42% of its exports (as compared to 6.5% going to Russia, 8.8% to Latvia, and 4.7% to Lithuania). On the other hand, the Estonian political system, its flat rate of income tax, and its non-welfare-state model distinguish it from the Nordic countries and their Nordic model, and indeed from many other European countries.
The military of Estonia is based upon the Estonian Defence Forces (Estonian: Kaitsevägi), which is the name of the unified armed forces of the republic with Maavägi (Army), Merevägi (Navy), Õhuvägi (Air Force) and a paramilitary national guard organisation Kaitseliit (Defence League). The Estonian National Defence Policy aim is to guarantee the preservation of the independence and sovereignty of the state, the integrity of its land, territorial waters, airspace and its constitutional order. Current strategic goals are to defend the country's interests, develop the armed forces for interoperability with other NATO and EU member forces, and participation in NATO missions.
Estonia co-operates with Latvia and Lithuania in several trilateral Baltic defence co-operation initiatives, including Baltic Battalion (BALTBAT), Baltic Naval Squadron (BALTRON), Baltic Air Surveillance Network (BALTNET) and joint military educational institutions such as the Baltic Defence College in Tartu. Future co-operation will include sharing of national infrastructures for training purposes and specialisation of training areas (BALTTRAIN) and collective formation of battalion-sized contingents for use in the NATO rapid-response force. In January 2011 the Baltic states were invited to join NORDEFCO, the defence framework of the Nordic countries.
The Ministry of Defence and the Defence Forces have been working on a cyberwarfare and defence formation for some years now. In 2007, a military doctrine of an e-military of Estonia was officially introduced as the country was under massive cyberattacks in 2007. The proposed aim of the e-military is to secure the vital infrastructure and e-infrastructure of Estonia. The main cyber warfare facility is the Computer Emergency Response Team of Estonia (CERT), founded in 2006. The organisation operates on security issues in local networks.
As a member of the European Union, Estonia is considered a high-income economy by the World Bank. The GDP (PPP) per capita of the country, a good indicator of wealth, was in 2015 $28,781 according to the IMF, between that of Slovak Republic and Lithuania, but below that of other long-time EU members such as Italy or Spain. The country is ranked 8th in the 2015 Index of Economic Freedom, and the 4th freest economy in Europe. Because of its rapid growth, Estonia has often been described as a Baltic Tiger beside Lithuania and Latvia. Beginning 1 January 2011, Estonia adopted the euro and became the 17th eurozone member state.
Estonia produces about 75% of its consumed electricity. In 2011 about 85% of it was generated with locally mined oil shale. Alternative energy sources such as wood, peat, and biomass make up approximately 9% of primary energy production. Renewable wind energy was about 6% of total consumption in 2009. Estonia imports petroleum products from western Europe and Russia. Oil shale energy, telecommunications, textiles, chemical products, banking, services, food and fishing, timber, shipbuilding, electronics, and transportation are key sectors of the economy. The ice-free port of Muuga, near Tallinn, is a modern facility featuring good transshipment capability, a high-capacity grain elevator, chill/frozen storage, and new oil tanker off-loading capabilities.[citation needed] The railroad serves as a conduit between the West, Russia, and other points to the East.[citation needed]
Because of the global economic recession that began in 2007, the GDP of Estonia decreased by 1.4% in the 2nd quarter of 2008, over 3% in the 3rd quarter of 2008, and over 9% in the 4th quarter of 2008. The Estonian government made a supplementary negative budget, which was passed by Riigikogu. The revenue of the budget was decreased for 2008 by EEK 6.1 billion and the expenditure by EEK 3.2 billion. In 2010, the economic situation stabilized and started a growth based on strong exports. In the fourth quarter of 2010, Estonian industrial output increased by 23% compared to the year before. The country has been experiencing economic growth ever since.
Since re-establishing independence, Estonia has styled itself as the gateway between East and West and aggressively pursued economic reform and integration with the West. Estonia's market reforms put it among the economic leaders in the former COMECON area.[citation needed] In 1994, based on the economic theories of Milton Friedman, Estonia became one of the first countries to adopt a flat tax, with a uniform rate of 26% regardless of personal income. In January 2005, the personal income tax rate was reduced to 24%. Another reduction to 23% followed in January 2006. The income tax rate was decreased to 21% by January 2008. The Government of Estonia finalised the design of Estonian euro coins in late 2004, and adopted the euro as the country's currency on 1 January 2011, later than planned due to continued high inflation. A Land Value Tax is levied which is used to fund local municipalities. It is a state level tax, however 100% of the revenue is used to fund Local Councils. The rate is set by the Local Council within the limits of 0.1–2.5%. It is one of the most important sources of funding for municipalities. The Land Value Tax is levied on the value of the land only with improvements and buildings not considered. Very few exemptions are considered on the land value tax and even public institutions are subject to the tax. The tax has contributed to a high rate (~90%) of owner-occupied residences within Estonia, compared to a rate of 67.4% in the United States.
In 1999, Estonia experienced its worst year economically since it regained independence in 1991, largely because of the impact of the 1998 Russian financial crisis.[citation needed] Estonia joined the WTO in November 1999. With assistance from the European Union, the World Bank and the Nordic Investment Bank, Estonia completed most of its preparations for European Union membership by the end of 2002 and now has one of the strongest economies of the new member states of the European Union.[citation needed] Estonia joined the OECD in 2010.
Estonia is a dependent country in the terms of energy and energy production. In recent years many local and foreign companies have been investing in renewable energy sources.[citation needed] The importance of wind power has been increasing steadily in Estonia and currently the total amount of energy production from wind is nearly 60 MW while at the same time roughly 399 MW worth of projects are currently being developed and more than 2800 MW worth of projects are being proposed in the Lake Peipus area and the coastal areas of Hiiumaa.
Estonia has had a market economy since the end of the 1990s and one of the highest per capita income levels in Eastern Europe. Proximity to the Scandinavian markets, its location between the East and West, competitive cost structure and a highly skilled labour force have been the major Estonian comparative advantages in the beginning of the 2000s (decade). As the largest city, Tallinn has emerged as a financial centre and the Tallinn Stock Exchange joined recently with the OMX system. The current government has pursued tight fiscal policies, resulting in balanced budgets and low public debt.
In 2007, however, a large current account deficit and rising inflation put pressure on Estonia's currency, which was pegged to the Euro, highlighting the need for growth in export-generating industries. Estonia exports mainly machinery and equipment, wood and paper, textiles, food products, furniture, and metals and chemical products. Estonia also exports 1.562 billion kilowatt hours of electricity annually. At the same time Estonia imports machinery and equipment, chemical products, textiles, food products and transportation equipment. Estonia imports 200 million kilowatt hours of electricity annually.
Between 2007 and 2013, Estonia receives 53.3 billion kroons (3.4 billion euros) from various European Union Structural Funds as direct supports by creating the largest foreign investments into Estonia ever. Majority of the European Union financial aid will be invested into to the following fields: energy economies, entrepreneurship, administrative capability, education, information society, environment protection, regional and local development, research and development activities, healthcare and welfare, transportation and labour market.
Between 1945 and 1989, the share of ethnic Estonians in the population resident within the currently defined boundaries of Estonia dropped to 61%, caused primarily by the Soviet programme promoting mass immigration of urban industrial workers from Russia, Ukraine, and Belarus, as well as by wartime emigration and Joseph Stalin's mass deportations and executions.[citation needed] By 1989, minorities constituted more than one-third of the population, as the number of non-Estonians had grown almost fivefold.
At the end of the 1980s, Estonians perceived their demographic change as a national catastrophe. This was a result of the migration policies essential to the Soviet Nationalisation Programme aiming to russify Estonia – administrative and military immigration of non-Estonians from the USSR coupled with the deportation of Estonians to the USSR. In the decade following the reconstitution of independence, large-scale emigration by ethnic Russians and the removal of the Russian military bases in 1994 caused the proportion of ethnic Estonians in Estonia to increase from 61% to 69% in 2006.
Modern Estonia is a fairly ethnically heterogeneous country, but this heterogeneity is not a feature of much of the country as the non-Estonian population is concentrated in two of Estonia's counties. Thirteen of Estonia's 15 counties are over 80% ethnic Estonian, the most homogeneous being Hiiumaa, where Estonians account for 98.4% of the population. In the counties of Harju (including the capital city, Tallinn) and Ida-Viru, however, ethnic Estonians make up 60% and 20% of the population, respectively. Russians make up 25.6% of the total population but account for 36% of the population in Harju county and 70% of the population in Ida-Viru county.
The Estonian Cultural Autonomy law that was passed in 1925 was unique in Europe at that time. Cultural autonomies could be granted to minorities numbering more than 3,000 people with longstanding ties to the Republic of Estonia. Before the Soviet occupation, the Germans and Jewish minorities managed to elect a cultural council. The Law on Cultural Autonomy for National Minorities was reinstated in 1993. Historically, large parts of Estonia's northwestern coast and islands have been populated by indigenous ethnically Rannarootslased (Coastal Swedes).
The 2008 United Nations Human Rights Council report called "extremely credible" the description of the citizenship policy of Estonia as "discriminatory". According to surveys, only 5% of the Russian community have considered returning to Russia in the near future. Estonian Russians have developed their own identity – more than half of the respondents recognised that Estonian Russians differ noticeably from the Russians in Russia. When comparing the result with a survey from 2000, then Russians' attitude toward the future is much more positive.
Estonia's constitution guarantees freedom of religion, separation of church and state, and individual rights to privacy of belief and religion. According to the Dentsu Communication Institute Inc, Estonia is one of the least religious countries in the world, with 75.7% of the population claiming to be irreligious. The Eurobarometer Poll 2005 found that only 16% of Estonians profess a belief in a god, the lowest belief of all countries studied (EU study). According to the Lutheran World Federation, the historic Lutheran denomination remains a large presence with 180,000 registered members.
Another major group, inhabitants who follow Eastern Orthodox Christianity, practised chiefly by the Russian minority, and the Russian Orthodox Church is the second largest denomination with 150,000 members. The Estonian Apostolic Orthodox Church, under the Greek-Orthodox Ecumenical Patriarchate, claims another 20,000 members. Thus, the number of adherents of Lutheranism and Orthodoxy, without regard to citizenship or ethnicity, is roughly equal. Refer to the Table below. The Catholics have their Latin Apostolic Administration of Estonia.
Although the Estonian and Germanic languages are of very different origins, one can identify many similar words in Estonian and German, for example. This is primarily because the Estonian language has borrowed nearly one third of its vocabulary from Germanic languages, mainly from Low Saxon (Middle Low German) during the period of German rule, and High German (including standard German). The percentage of Low Saxon and High German loanwords can be estimated at 22–25 percent, with Low Saxon making up about 15 percent.
Academic higher education in Estonia is divided into three levels: bachelor's, master's, and doctoral studies. In some specialties (basic medical studies, veterinary, pharmacy, dentistry, architect-engineer, and a classroom teacher programme) the bachelor's and master's levels are integrated into one unit. Estonian public universities have significantly more autonomy than applied higher education institutions. In addition to organising the academic life of the university, universities can create new curricula, establish admission terms and conditions, approve the budget, approve the development plan, elect the rector, and make restricted decisions in matters concerning assets. Estonia has a moderate number of public and private universities. The largest public universities are the University of Tartu, Tallinn University of Technology, Tallinn University, Estonian University of Life Sciences, Estonian Academy of Arts; the largest private university is Estonian Business School.
The Estonian Academy of Sciences is the national academy of science. The strongest public non-profit research institute that carries out fundamental and applied research is the National Institute of Chemical Physics and Biophysics (NICPB; Estonian KBFI). The first computer centres were established in the late 1950s in Tartu and Tallinn. Estonian specialists contributed in the development of software engineering standards for ministries of the Soviet Union during the 1980s. As of 2011[update], Estonia spends around 2.38% of its GDP on Research and Development, compared to an EU average of around 2.0%.
Today, Estonian society encourages liberty and liberalism, with popular commitment to the ideals of the limited government, discouraging centralised power and corruption. The Protestant work ethic remains a significant cultural staple, and free education is a highly prized institution. Like the mainstream culture in the other Nordic countries, Estonian culture can be seen to build upon the ascetic environmental realities and traditional livelihoods, a heritage of comparatively widespread egalitarianism out of practical reasons (see: Everyman's right and universal suffrage), and the ideals of closeness to nature and self-sufficiency (see: summer cottage).
The Estonian Academy of Arts (Estonian: Eesti Kunstiakadeemia, EKA) is providing higher education in art, design, architecture, media, art history and conservation while Viljandi Culture Academy of University of Tartu has an approach to popularise native culture through such curricula as native construction, native blacksmithing, native textile design, traditional handicraft and traditional music, but also jazz and church music. In 2010, there were 245 museums in Estonia whose combined collections contain more than 10 million objects.
The tradition of Estonian Song Festivals (Laulupidu) started at the height of the Estonian national awakening in 1869. Today, it is one of the largest amateur choral events in the world. In 2004, about 100,000 people participated in the Song Festival. Since 1928, the Tallinn Song Festival Grounds (Lauluväljak) have hosted the event every five years in July. The last festival took place in July 2014. In addition, Youth Song Festivals are also held every four or five years, the last of them in 2011, and the next is scheduled for 2017.
Estonia won the Eurovision Song Contest in 2001 with the song "Everybody" performed by Tanel Padar and Dave Benton. In 2002, Estonia hosted the event. Maarja-Liis Ilus has competed for Estonia on two occasions (1996 and 1997), while Eda-Ines Etti, Koit Toome and Evelin Samuel owe their popularity partly to the Eurovision Song Contest. Lenna Kuurmaa is a very popular singer in Europe[citation needed], with her band Vanilla Ninja. "Rändajad" by Urban Symphony, was the first ever song in Estonian to chart in the UK, Belgium, and Switzerland.
The Estonian literature refers to literature written in the Estonian language (ca. 1 million speakers). The domination of Estonia after the Northern Crusades, from the 13th century to 1918 by Germany, Sweden, and Russia resulted in few early written literary works in the Estonian language. The oldest records of written Estonian date from the 13th century. Originates Livoniae in Chronicle of Henry of Livonia contains Estonian place names, words and fragments of sentences. The Liber Census Daniae (1241) contains Estonian place and family names.
Oskar Luts was the most prominent prose writer of the early Estonian literature, who is still widely read today, especially his lyrical school novel Kevade (Spring). Anton Hansen Tammsaare's social epic and psychological realist pentalogy Truth and Justice captured the evolution of Estonian society from a peasant community to an independent nation. In modern times, Jaan Kross and Jaan Kaplinski are Estonia's best known and most translated writers. Among the most popular writers of the late 20th and early 21st centuries are Tõnu Õnnepalu and Andrus Kivirähk, who uses elements of Estonian folklore and mythology, deforming them into absurd and grotesque.
The architectural history of Estonia mainly reflects its contemporary development in northern Europe. Worth mentioning is especially the architectural ensemble that makes out the medieval old town of Tallinn, which is on the UNESCO World Heritage List. In addition, the country has several unique, more or less preserved hill forts dating from pre-Christian times, a large number of still intact medieval castles and churches, while the countryside is still shaped by the presence of a vast number of manor houses from earlier centuries.
Historically, the cuisine of Estonia has been heavily dependent on seasons and simple peasant food, which today is influenced by many countries. Today, it includes many typical international foods.[citation needed] The most typical foods in Estonia are black bread, pork, potatoes, and dairy products. Traditionally in summer and spring, Estonians like to eat everything fresh – berries, herbs, vegetables, and everything else that comes straight from the garden. Hunting and fishing have also been very common, although currently hunting and fishing are enjoyed mostly as hobbies. Today, it is also very popular to grill outside in summer.
Sport plays an important role in Estonian culture. After declaring independence from Russia in 1918, Estonia first competed as a nation at the 1920 Summer Olympics, although the National Olympic Committee was established in 1923. Estonian athletes took part of the Olympic Games until the country was annexed by the Soviet Union in 1940. The 1980 Summer Olympics Sailing regatta was held in the capital city Tallinn. After regaining independence in 1991, Estonia has participated in all Olympics. Estonia has won most of its medals in athletics, weightlifting, wrestling and cross-country skiing. Estonia has had very good success at the Olympic games given the country's small population. Estonia's best results were being ranked 13th in the medal table at the 1936 Summer Olympics, and 12th at the 2006 Winter Olympics.
Basketball is also a notable sport in Estonia. Estonia national basketball team previously participated in 1936 Summer Olympics, appeared in EuroBasket four times. Estonia national team also qualified to EuroBasket 2015, which will be held in Ukraine. BC Kalev/Cramo, which participates in EuroCup, is the most recent Korvpalli Meistriliiga winner after becoming champion of the league for the 6th time. Tartu Ülikool/Rock, which participates in EuroChallenge, is the second strongest Estonian basketball club, previously winning Korvpalli Meistriliiga 22 times. Six Estonian basketball clubs participates in Baltic Basketball League.
Alaska (i/əˈlæskə/) is a U.S. state situated in the northwest extremity of the Americas. The Canadian administrative divisions of British Columbia and Yukon border the state to the east while Russia has a maritime border with the state to the west across the Bering Strait. To the north are the Chukchi and Beaufort Seas, the southern parts of the Arctic Ocean. To the south and southwest is the Pacific Ocean. Alaska is the largest state in the United States by area, the 3rd least populous and the least densely populated of the 50 United States. Approximately half of Alaska's residents (the total estimated at 738,432 by the Census Bureau in 2015) live within the Anchorage metropolitan area. Alaska's economy is dominated by the fishing, natural gas, and oil industries, resources which it has in abundance. Military bases and tourism are also a significant part of the economy.
Alaska is the northernmost and westernmost state in the United States and has the most easterly longitude in the United States because the Aleutian Islands extend into the eastern hemisphere. Alaska is the only non-contiguous U.S. state on continental North America; about 500 miles (800 km) of British Columbia (Canada) separates Alaska from Washington. It is technically part of the continental U.S., but is sometimes not included in colloquial use; Alaska is not part of the contiguous U.S., often called "the Lower 48". The capital city, Juneau, is situated on the mainland of the North American continent but is not connected by road to the rest of the North American highway system.
Also referred to as the Panhandle or Inside Passage, this is the region of Alaska closest to the rest of the United States. As such, this was where most of the initial non-indigenous settlement occurred in the years following the Alaska Purchase. The region is dominated by the Alexander Archipelago as well as the Tongass National Forest, the largest national forest in the United States. It contains the state capital Juneau, the former capital Sitka, and Ketchikan, at one time Alaska's largest city. The Alaska Marine Highway provides a vital surface transportation link throughout the area, as only three communities (Haines, Hyder and Skagway) enjoy direct connections to the contiguous North American road system.
The North Slope is mostly tundra peppered with small villages. The area is known for its massive reserves of crude oil, and contains both the National Petroleum Reserve–Alaska and the Prudhoe Bay Oil Field. Barrow, the northernmost city in the United States, is located here. The Northwest Arctic area, anchored by Kotzebue and also containing the Kobuk River valley, is often regarded as being part of this region. However, the respective Inupiat of the North Slope and of the Northwest Arctic seldom consider themselves to be one people.
With its myriad islands, Alaska has nearly 34,000 miles (54,720 km) of tidal shoreline. The Aleutian Islands chain extends west from the southern tip of the Alaska Peninsula. Many active volcanoes are found in the Aleutians and in coastal regions. Unimak Island, for example, is home to Mount Shishaldin, which is an occasionally smoldering volcano that rises to 10,000 feet (3,048 m) above the North Pacific. It is the most perfect volcanic cone on Earth, even more symmetrical than Japan's Mount Fuji. The chain of volcanoes extends to Mount Spurr, west of Anchorage on the mainland. Geologists have identified Alaska as part of Wrangellia, a large region consisting of multiple states and Canadian provinces in the Pacific Northwest, which is actively undergoing continent building.
According to an October 1998 report by the United States Bureau of Land Management, approximately 65% of Alaska is owned and managed by the U.S. federal government as public lands, including a multitude of national forests, national parks, and national wildlife refuges. Of these, the Bureau of Land Management manages 87 million acres (35 million hectares), or 23.8% of the state. The Arctic National Wildlife Refuge is managed by the United States Fish and Wildlife Service. It is the world's largest wildlife refuge, comprising 16 million acres (6.5 million hectares).
Of the remaining land area, the state of Alaska owns 101 million acres (41 million hectares), its entitlement under the Alaska Statehood Act. A portion of that acreage is occasionally ceded to organized boroughs, under the statutory provisions pertaining to newly formed boroughs. Smaller portions are set aside for rural subdivisions and other homesteading-related opportunities. These are not very popular due to the often remote and roadless locations. The University of Alaska, as a land grant university, also owns substantial acreage which it manages independently.
Another 44 million acres (18 million hectares) are owned by 12 regional, and scores of local, Native corporations created under the Alaska Native Claims Settlement Act (ANCSA) of 1971. Regional Native corporation Doyon, Limited often promotes itself as the largest private landowner in Alaska in advertisements and other communications. Provisions of ANCSA allowing the corporations' land holdings to be sold on the open market starting in 1991 were repealed before they could take effect. Effectively, the corporations hold title (including subsurface title in many cases, a privilege denied to individual Alaskans) but cannot sell the land. Individual Native allotments can be and are sold on the open market, however.
The climate in Southeast Alaska is a mid-latitude oceanic climate (Köppen climate classification: Cfb) in the southern sections and a subarctic oceanic climate (Köppen Cfc) in the northern parts. On an annual basis, Southeast is both the wettest and warmest part of Alaska with milder temperatures in the winter and high precipitation throughout the year. Juneau averages over 50 in (130 cm) of precipitation a year, and Ketchikan averages over 150 in (380 cm). This is also the only region in Alaska in which the average daytime high temperature is above freezing during the winter months.
The climate of Western Alaska is determined in large part by the Bering Sea and the Gulf of Alaska. It is a subarctic oceanic climate in the southwest and a continental subarctic climate farther north. The temperature is somewhat moderate considering how far north the area is. This region has a tremendous amount of variety in precipitation. An area stretching from the northern side of the Seward Peninsula to the Kobuk River valley (i. e., the region around Kotzebue Sound) is technically a desert, with portions receiving less than 10 in (25 cm) of precipitation annually. On the other extreme, some locations between Dillingham and Bethel average around 100 in (250 cm) of precipitation.
Numerous indigenous peoples occupied Alaska for thousands of years before the arrival of European peoples to the area. Linguistic and DNA studies done here have provided evidence for the settlement of North America by way of the Bering land bridge.[citation needed] The Tlingit people developed a society with a matrilineal kinship system of property inheritance and descent in what is today Southeast Alaska, along with parts of British Columbia and the Yukon. Also in Southeast were the Haida, now well known for their unique arts. The Tsimshian people came to Alaska from British Columbia in 1887, when President Grover Cleveland, and later the U.S. Congress, granted them permission to settle on Annette Island and found the town of Metlakatla. All three of these peoples, as well as other indigenous peoples of the Pacific Northwest Coast, experienced smallpox outbreaks from the late 18th through the mid-19th century, with the most devastating epidemics occurring in the 1830s and 1860s, resulting in high fatalities and social disruption.
The Aleutian Islands are still home to the Aleut people's seafaring society, although they were the first Native Alaskans to be exploited by Russians. Western and Southwestern Alaska are home to the Yup'ik, while their cousins the Alutiiq ~ Sugpiaq lived in what is now Southcentral Alaska. The Gwich'in people of the northern Interior region are Athabaskan and primarily known today for their dependence on the caribou within the much-contested Arctic National Wildlife Refuge. The North Slope and Little Diomede Island are occupied by the widespread Inupiat people.
Some researchers believe that the first Russian settlement in Alaska was established in the 17th century. According to this hypothesis, in 1648 several koches of Semyon Dezhnyov's expedition came ashore in Alaska by storm and founded this settlement. This hypothesis is based on the testimony of Chukchi geographer Nikolai Daurkin, who had visited Alaska in 1764–1765 and who had reported on a village on the Kheuveren River, populated by "bearded men" who "pray to the icons". Some modern researchers associate Kheuveren with Koyuk River.
Starting in the 1890s and stretching in some places to the early 1910s, gold rushes in Alaska and the nearby Yukon Territory brought thousands of miners and settlers to Alaska. Alaska was officially incorporated as an organized territory in 1912. Alaska's capital, which had been in Sitka until 1906, was moved north to Juneau. Construction of the Alaska Governor's Mansion began that same year. European immigrants from Norway and Sweden also settled in southeast Alaska, where they entered the fishing and logging industries.
Statehood for Alaska was an important cause of James Wickersham early in his tenure as a congressional delegate. Decades later, the statehood movement gained its first real momentum following a territorial referendum in 1946. The Alaska Statehood Committee and Alaska's Constitutional Convention would soon follow. Statehood supporters also found themselves fighting major battles against political foes, mostly in the U.S. Congress but also within Alaska. Statehood was approved by Congress on July 7, 1958. Alaska was officially proclaimed a state on January 3, 1959.
On March 27, 1964, the massive Good Friday earthquake killed 133 people and destroyed several villages and portions of large coastal communities, mainly by the resultant tsunamis and landslides. It was the second-most-powerful earthquake in the recorded history of the world, with a moment magnitude of 9.2. It was over one thousand times more powerful than the 1989 San Francisco earthquake. The time of day (5:36 pm), time of year and location of the epicenter were all cited as factors in potentially sparing thousands of lives, particularly in Anchorage.
The Alaska Native Language Center at the University of Alaska Fairbanks claims that at least 20 Alaskan native languages exist and there are also some languages with different dialects. Most of Alaska's native languages belong to either the Eskimo–Aleut or Na-Dene language families however some languages are thought to be isolates (e.g. Haida) or have not yet been classified (e.g. Tsimshianic). As of 2014[update] nearly all of Alaska's native languages were classified as either threatened, shifting, moribund, nearly extinct, or dormant languages.
According to statistics collected by the Association of Religion Data Archives from 2010, about 34% of Alaska residents were members of religious congregations. 100,960 people identified as Evangelical Protestants, 50,866 as Roman Catholic, and 32,550 as mainline Protestants. Roughly 4% are Mormon, 0.5% are Jewish, 1% are Muslim, 0.5% are Buddhist, and 0.5% are Hindu. The largest religious denominations in Alaska as of 2010[update] were the Catholic Church with 50,866 adherents, non-denominational Evangelical Protestants with 38,070 adherents, The Church of Jesus Christ of Latter-day Saints with 32,170 adherents, and the Southern Baptist Convention with 19,891 adherents. Alaska has been identified, along with Pacific Northwest states Washington and Oregon, as being the least religious states of the USA, in terms of church membership.
In 1795, the First Russian Orthodox Church was established in Kodiak. Intermarriage with Alaskan Natives helped the Russian immigrants integrate into society. As a result, an increasing number of Russian Orthodox churches gradually became established within Alaska. Alaska also has the largest Quaker population (by percentage) of any state. In 2009 there were 6,000 Jews in Alaska (for whom observance of halakha may pose special problems). Alaskan Hindus often share venues and celebrations with members of other Asian religious communities, including Sikhs and Jains.
The 2007 gross state product was $44.9 billion, 45th in the nation. Its per capita personal income for 2007 was $40,042, ranking 15th in the nation. According to a 2013 study by Phoenix Marketing International, Alaska had the fifth-largest number of millionaires per capita in the United States, with a ratio of 6.75 percent. The oil and gas industry dominates the Alaskan economy, with more than 80% of the state's revenues derived from petroleum extraction. Alaska's main export product (excluding oil and natural gas) is seafood, primarily salmon, cod, Pollock and crab.
Employment is primarily in government and industries such as natural resource extraction, shipping, and transportation. Military bases are a significant component of the economy in the Fairbanks North Star, Anchorage and Kodiak Island boroughs, as well as Kodiak. Federal subsidies are also an important part of the economy, allowing the state to keep taxes low. Its industrial outputs are crude petroleum, natural gas, coal, gold, precious metals, zinc and other mining, seafood processing, timber and wood products. There is also a growing service and tourism sector. Tourists have contributed to the economy by supporting local lodging.
Alaska has vast energy resources, although its oil reserves have been largely depleted. Major oil and gas reserves were found in the Alaska North Slope (ANS) and Cook Inlet basins, but according to the Energy Information Administration, by February 2014 Alaska had fallen to fourth place in the nation in crude oil production after Texas, North Dakota, and California. Prudhoe Bay on Alaska's North Slope is still the second highest-yielding oil field in the United States, typically producing about 400,000 barrels per day (64,000 m3/d), although by early 2014 North Dakota's Bakken Formation was producing over 900,000 barrels per day (140,000 m3/d). Prudhoe Bay was the largest conventional oil field ever discovered in North America, but was much smaller than Canada's enormous Athabasca oil sands field, which by 2014 was producing about 1,500,000 barrels per day (240,000 m3/d) of unconventional oil, and had hundreds of years of producible reserves at that rate.
The Trans-Alaska Pipeline can transport and pump up to 2.1 million barrels (330,000 m3) of crude oil per day, more than any other crude oil pipeline in the United States. Additionally, substantial coal deposits are found in Alaska's bituminous, sub-bituminous, and lignite coal basins. The United States Geological Survey estimates that there are 85.4 trillion cubic feet (2,420 km3) of undiscovered, technically recoverable gas from natural gas hydrates on the Alaskan North Slope. Alaska also offers some of the highest hydroelectric power potential in the country from its numerous rivers. Large swaths of the Alaskan coastline offer wind and geothermal energy potential as well.
Alaska's economy depends heavily on increasingly expensive diesel fuel for heating, transportation, electric power and light. Though wind and hydroelectric power are abundant and underdeveloped, proposals for statewide energy systems (e.g. with special low-cost electric interties) were judged uneconomical (at the time of the report, 2001) due to low (less than 50¢/gal) fuel prices, long distances and low population. The cost of a gallon of gas in urban Alaska today is usually 30–60¢ higher than the national average; prices in rural areas are generally significantly higher but vary widely depending on transportation costs, seasonal usage peaks, nearby petroleum development infrastructure and many other factors.
The Alaska Permanent Fund is a constitutionally authorized appropriation of oil revenues, established by voters in 1976 to manage a surplus in state petroleum revenues from oil, largely in anticipation of the recently constructed Trans-Alaska Pipeline System. The fund was originally proposed by Governor Keith Miller on the eve of the 1969 Prudhoe Bay lease sale, out of fear that the legislature would spend the entire proceeds of the sale (which amounted to $900 million) at once. It was later championed by Governor Jay Hammond and Kenai state representative Hugh Malone. It has served as an attractive political prospect ever since, diverting revenues which would normally be deposited into the general fund.
The Alaska Constitution was written so as to discourage dedicating state funds for a particular purpose. The Permanent Fund has become the rare exception to this, mostly due to the political climate of distrust existing during the time of its creation. From its initial principal of $734,000, the fund has grown to $50 billion as a result of oil royalties and capital investment programs. Most if not all the principal is invested conservatively outside Alaska. This has led to frequent calls by Alaskan politicians for the Fund to make investments within Alaska, though such a stance has never gained momentum.
Starting in 1982, dividends from the fund's annual growth have been paid out each year to eligible Alaskans, ranging from an initial $1,000 in 1982 (equal to three years' payout, as the distribution of payments was held up in a lawsuit over the distribution scheme) to $3,269 in 2008 (which included a one-time $1,200 "Resource Rebate"). Every year, the state legislature takes out 8% from the earnings, puts 3% back into the principal for inflation proofing, and the remaining 5% is distributed to all qualifying Alaskans. To qualify for the Permanent Fund Dividend, one must have lived in the state for a minimum of 12 months, maintain constant residency subject to allowable absences, and not be subject to court judgments or criminal convictions which fall under various disqualifying classifications or may subject the payment amount to civil garnishment.
The Tanana Valley is another notable agricultural locus, especially the Delta Junction area, about 100 miles (160 km) southeast of Fairbanks, with a sizable concentration of farms growing agronomic crops; these farms mostly lie north and east of Fort Greely. This area was largely set aside and developed under a state program spearheaded by Hammond during his second term as governor. Delta-area crops consist predominately of barley and hay. West of Fairbanks lies another concentration of small farms catering to restaurants, the hotel and tourist industry, and community-supported agriculture.
Most food in Alaska is transported into the state from "Outside", and shipping costs make food in the cities relatively expensive. In rural areas, subsistence hunting and gathering is an essential activity because imported food is prohibitively expensive. Though most small towns and villages in Alaska lie along the coastline, the cost of importing food to remote villages can be high, because of the terrain and difficult road conditions, which change dramatically, due to varying climate and precipitation changes. The cost of transport can reach as high as 50¢ per pound ($1.10/kg) or more in some remote areas, during the most difficult times, if these locations can be reached at all during such inclement weather and terrain conditions. The cost of delivering a 1 US gallon (3.8 L) of milk is about $3.50 in many villages where per capita income can be $20,000 or less. Fuel cost per gallon is routinely 20–30¢ higher than the continental United States average, with only Hawaii having higher prices.
Alaska has few road connections compared to the rest of the U.S. The state's road system covers a relatively small area of the state, linking the central population centers and the Alaska Highway, the principal route out of the state through Canada. The state capital, Juneau, is not accessible by road, only a car ferry, which has spurred several debates over the decades about moving the capital to a city on the road system, or building a road connection from Haines. The western part of Alaska has no road system connecting the communities with the rest of Alaska.

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