JOURNAL OF BALTIC STUDIES
Urban and Regional Restructuring in the Baltic States
A special volume dedicated to the memory of Professor Salme Nõmmik (03.03.1910 -21.09.1988)
The status and trends of human and territorial assets in the peripheral rural areas of
Estonia
Antti Roose (corresponding author), University of Tartu, Department of Geography, Vanemuise
46-240, Tartu, 51014, Estonia. Tel. +372 737 684, E-mail antti.roose@ut.ee
Garri Raagmaa, University of Tartu, Department of Geography, Vanemuise 46-240, Tartu,
51014, Estonia, +372 737 684, Tel. +372 737 684, E-mail garri@ut.ee
Jaak Kliimask, Estonian University of Life Sciences, Institute of Agricultural and Environmental
Sciences, Kreutzwaldi 5-2C12, Tartu, 51014, Estonia. Tel. (+372) 731 3820, E-mail
jaakk65@hot.ee
Antti Roose (PhD on geoinformatics) is a Senior Research Fellow at the Department of
Geography of the University of Tartu. His research focuses on methods of spatial planning,
peripheral and cross-border studies, land use and environmental impacts of urbanization and
energy appraisal modelling. Acting as ESPON Estonian national contact point, he contributes to
various Pan-European spatial development policy and cross-regional analysis projects. He has
taught courses on European spatial planning, project management, and environmental standards,
using e-learning and GIS tools.
Garri Raagmaa (PhD, Human Geography) is an Associated professor at the Department of
Geography of the University of Tartu. Hi has published three books and over 60 articles about
regional planning and development focusing on planning culture and strategic long term
planning, local/regional innovation and networking, territorial identity and leadership issues. He
has taught regional planning, economic geography and regional innovation systems at several
European universities. He has also practiced since 1992 as a regional/local develop
ment consultant and trainer, mainly for public sector institutions.
Jaak Kliimask (Msc, Human Geography) is a lecturer at the Estonian University of Life Sciences.
He is teaching rural geography and regional development.
1
The status and trends of human and territorial assets in the peripheral rural
areas of Estonia
Abstract
The present study provides an overview of rural peripheries in Estonia; assesses current
socioeconomic trends, the status of human assets and development opportunities; and contributes
to the theory of peripheral areas. Remote areas with excessive population decline and low
population density cover roughly half of Estonia’s territory, while accounting for only 10% of the
total population. The paper discusses the theoretical foundations and causes of rural
peripherization and typologies of rural areas, and it presents a transformation model for rural
areas that is based either on the post-productivist or the marginalization approach.
Keywords: Rural areas, peripherality, remote areas, depopulation, post-productivism,
marginalization
Introduction
Despite Estonia’s small territory (45,200 km2), its rural areas are not uniform but present a
conglomerate that exhibits increasing variety and disparities between city regions and is impacted
by functional urban-rural ties and shrinking remote communities. Since the 1990s, Estonian rural
areas have undergone sharp demographic, social, economic and environmental changes. Primary
sector, which provided the majority of employment in rural areas before the collapse of the
Soviet agro-industrial sector in the early 1990s, lost 87% of its jobs by 2012 (Statistics Estonia,
2013). As a result, unemployment has been considerably higher in remote areas, mainly because
of a skills mismatch but also because of the limited mobility of people living in scattered
farmsteads and tiny villages across a large territory. Some former collective/state farm workers
became farmers and entrepreneurs; some started commuting to neighboring urban centers and
some emigrated. A considerable share of the population dropped out of the labor force and
became discouraged
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Figure 1 about here
This major structural change started a process known as the (negative) cumulative causation
(Drudy 1989). The lack of jobs particularly pushed out the younger population, in turn leading to
two negative causative cycles: a lower birth rate and more conservative local policymaking based
on the ageing electorate (Figure 1). Declining numbers of labor and consumers has led to an
impoverished business milieu: local services have lost their ground and have gradually been
closed which increases unemployment. Ageing populations in own turn strengthens traditional,
not so business-minded values in local politics and policy making, causing less active business
development and generation of new jobs. At the same time, accessible rural areas around cities
have benefited from suburbanization in the 2000s (Roose et al. 2013; Leetma et al. 2012;
Tammaru et al. 2009). Such trends are found elsewhere in Europe as well (Copus et al. 2007)
but, since Estonia lost its rural employment and population at an extreme rate, it deserves a more
detailed exploration. Unfavorable trends in land use, demography, social welfare,
entrepreneurship and education have paradoxically been accelerated after Estonia’s EU
accession, despite the application of common agricultural, cohesion and regional policies
(Raagmaa et al. 2013), which increased productivity in the primary sector but have not been able
to generate enough new jobs in secondary and tertiary industries.
In this paper, we primarily highlight trends and endogenous drivers of rural change with
particular focus on remote areas. First, the article seeks to define peripherality and remoteness in
the Estonian context, points out the applicability of rural typologies in Estonia and discusses
which areas can be categorized as remote rural. Second, it assesses the socioeconomic status and
human assets in remote, sparsely populated rural areas which have faced rapid recession. Third,
the paper discusses the post-productivist
ment path in contrast to the further marginalization, specifically the opportunities of
strengthening and empowering local territorial potential in remote rural areas.
The statistical survey is based on key demographic, social and economic indicators. Long-term
analysis incorporates data going back to the 1950s; short-term analysis summarizes trends since
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the 1990s. The process of rural marginalization is primarily demonstrated through social
indicators. Trends in the territorial perspective are based on municipal aggregation.
Typologies and drivers of development in remote rural areas
Rural areas as geographical peripheries have traditionally been considered a resource base
(Hayter et al. 2003) for national and regional economies, supplying growing urban regions with
raw materials, particularly with food, recreational resources and labor. Rural areas have been
thought of as socially homogenous spaces with relatively passive or politically conservative
populations that have little to contribute to national economies (Thelen et al. 2011). Rural people
have been described as unable to cope with the speed and scale of change in contrast to their
urban counterparts who are viewed as taking a more proactive approach to dealing with change
(Schafft 2000). For many centuries, rural people and their daily activities (jobs, habitation and
social relations) were locked into their places, and there were few changes. Hence the saying
“Stadtluft macht frei” (city air brings freedom) captures the medieval concept of liberty
(Yamagishi et al. 2012). A gradually opening, globalizing world might be frightening and a
disturbance in people’s everyday routines.
Rural typologies and their applicability in Estonia
Many definitions are used for the term “rural” in a variety of contexts and frameworks. But the
definition remains unclear, despite having been discussed for a hundred year (Halfacree 1993).
An early idea was to use “rural” to describe areas which were not-”urban”. The term “rural area”
is generally used as an expression for non-urban or peripheral regions. As the differentiation
between rural and urban areas as opposite types of spatial structures has been decreasing,
attempts to define the spatial category of rural area creates methodological problems associated
with population densities and heterogeneity. Due to distortions, EU and OECD rural typologies
have been refined, switching to the contiguity grid cell approach (Eurostat 2010). Taking into
consideration Local Administrative Unit level 2 (LAU2), it increases the share of rural land area
at the 1 km2 grids to 98.7% which positions Estonia as the most rural EU country in terms of land
use. Similarly, the new typology increases the share of rural population in Estonia by 8.2% to
40.2% (6th position in EU). According to the new urban-rural typology at LAU2 level (Eurostat
2010), Estonian population is mainly intermediate (51.5%) and predominantly rural (48.5%),
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whereas the share of predominantly rural land area has increased to 82.3%. The precision of
typologies has increased and deepened the ”rurality” of Estonia in terms of the share of rural land
area and of rural population. In the present study, the statistical screening of “rurality” has been
aggregated at municipal and county administrative levels, in a few cases constructed as a 1 km2
grid.
The present survey deals not just with rural areas in general but more narrowly with remote and
peripheral rural areas. Therefore, it is crucial to stress the distinction between rurality and
peripherality. The notion of periphery is based on the asymmetry of the core, specified not just by
the nature of the core-periphery relationship and their constitution but also by the relevant
processes and evolution (Herrschel 2011). Peripheries are distant from population and economic
centers; they are described by geographical but also demographic and socioeconomic
characteristics (Suorsa 2007). The distances that help determine the conditions for economic and
social development are mainly, but not necessarily, Euclidian. Peripherality may depend on the
unbalanced mono-centric settlement structure of a region as well as on specific physical
characteristics, land cover and accessibility. As a rule, peripherality as a term is applied to the
outer margins of national or regional units; many peripheral areas feature rural characteristics,
associated with poorly remunerated agriculture, depopulation and limited local investment capital
(Buhalis 1999). The concept of inner peripheries as such is new in the European policy arena, as
illustrated by the lack of any policy documents dealing with it explicitly (Herrschel 2011).
The term “peripheral” has had the connotation of “deep rural” or remote: distant from the capital
and other urban or local service centers. European Environmental Agency delineated deep rural
as an environmental zone of poor accessibility and low economic density (van Eupen et al. 2012).
So far, peripherality in Estonia has always been related to remoteness and backwardness (Mäger
2006) characterized by the ruins of former farms and blocks of flats surrounded by uncultivated
overgrowing fields This picture contrasts with naturally valuable and attractive locations along
the coast and near uplands, forming another type of surreal landscape with cared-for houses that
are unpopulated on off-seasons.
A shift from exogenous to endogenous factors in rural development
A range of exogenous drivers such as globalization, technological change and demographic
trends (CEC 2007) caused shifts in the rural structure. Theories of local and regional
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development have tended to move from exogenous factors towards emphasizing endogenous
ones, elaborating conditions for growth (Galdeano-Gómez et al. 2010). Theories increasingly
account for the diversity found in rural areas (Copus and Hörnström 2011). Endogenous poststructural theories argue that externalities can be complemented by internal strengths such as
knowledge, innovation and entrepreneurialism which may attract capital and companies from
outside and generate internal returns (Woods 2011). “Soft” endogenous factors such as social
capital, cultural particularities, local-regional identity and leadership generate higher selfconfidence among local people and institutions, create a better image for outsiders and are
sources of an improved entrepreneurial milieu (Raagmaa et al. 2012). It has also been widely
accepted by now that “one size does not fit all” (Tödtling and Tripple 2005), which means that
policies should also consider local structural, cultural and social particularities.
Instead of physical distances that hampered development during industrialization, the
environmental qualities of a location that constitute mental and social distances seem much more
important in the era of increasing physical and virtual mobility. Blowers and Leroy (1994)
consider “powerlessness” a central feature of periphery, since it “predisposes the community to
inaction”. This means that, since people are not able to understand the logic of globalized
capitalist development, they tend to encapsulate in their locality even more (Woods 2007). The
formation of a periphery is the result of the process of peripherization itself, not determined
primarily by the structural conditions of economic development in a given locality (Beetz et al.
2008). In many localities, the unwillingness or inability to restructure the community can be seen
as the actual reason of economic decline (Barca 2009). At the same time, many peripheral areas
have temporarily or permanently attracted people with national or even international decisionmaking powers (cultural elites, businessmen, politicians) who may contribute to local
development: mainly by opening the local society to the outer world as middlemen but also by
contributing directly as community members or business partners. This has been labeled as
seasonal buzz (Marjavaara 2005).
Considerable research has been done about the causes and effects of peripherality on regional
economic development over the past 30 years (Copus and Hörnström 2011; Danson and de Souza
2012). Empirical evidence shows particular decline of rural areas and increasing regional
differences in Central and Eastern Europe (CEE) (Lentz 2007; Gorzelak and Goh 2010; Lang
2012; Aidukaite 2011; Ehrlich et al. 2012). The transition to a new economic system caused
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institutional change and created a sharp divide between “winners” and “losers”. Increased
territorial disparity and intensifying rural degradation in CEE has been at least partly caused by
neoliberal thinking in national regional policies (Talbot et al. 2008). The socialist heritage has led
to skepticism towards public sector interventions and has supported the laissez faire approach
(Aligica and Evans 2009).
The 2008–2010 financial crisis has further reinforced polarization processes in CEE, since
governments have tended to cut regional development budgets (Gorzelak and Goh 2010) which
has most likely caused further widening in socio-spatial disparities. The post-socialist cases also
display significant discontinuity with past trajectories caused by a rapid restructuring of the
former industrial base. More than ever before, local development depends on the nature of urban–
rural interaction and, increasingly, on the ability to also account for the global–local axis (Copus
and Hörnström 2011). Rural diversity has become an integral feature in policymaking, focusing
rather on places than sectors (OECD 2006). Previously dominant natural resources and amenities
should at least partly be replaced by local human assets, which would allow local businesses to
produce higher added value through innovation and improve their position in the increasingly
complex value chains impacted by corporate power games. At the same time, due to new
productive technologies and the erosion of low skilled jobs to Asia, rural areas should generate
alternative employment opportunities, which is usually only possible via new start-ups. Thus,
such institutional capacities as networking, education and knowledge, cultural attractiveness,
entrepreneurialism and innovation are far more important than they were only a few decades ago.
The key drivers of rural development and recent policies
According to European rural studies and comparisons based on NUTS3 indicators, rural Estonia
is still predominantly treated as old-fashioned and agrarian (EDORA 2009). This is not entirely
true anymore. The primary sector remains an important rural activity as the natural resource base,
but its employment has fallen below 12% in most counties (NUTS 4) and as low as 3.9%
nationwide by 2008 (4.7% in 2012). During the mid-2000s, manufacturing industries from the
rapidly restructuring cities of Tallinn and Tartu moved to rural areas because of the lack of labor,
leading to manufacturing employing 3–4 times more people (30–35%) in rural regions than the
primary sector. Another well-extended sector has been tourism, especially in the Western coastal
regions that have a long-lasting spa and hospitality tradition (Kask and Raagmaa 2010).
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However, the number of new jobs created in rural areas has been fairly modest when compared to
the primary sector losses of the 1990s. There are two more issues related to the rural
industrialization in Estonia. First, most new factories are branch plants owned and managed from
the outside and, therefore, not ideally integrated into local economies. Second, due to increasing
salaries, labor intensive plants tend to move further away to Asia.
One reason for this has been the fact that neither rural development nor regional/cohesion
policies followed the industrialization trend. Large agricultural producers benefited from several
public policy measures (e.g., direct payment), resulting in increased productivity through the use
of modern technology (e.g. dairy robots). Technological change continuous to lead to a steady
loss of farm jobs and economies of scale motivate a continuous process of holdings
amalgamation (Holt-Jensen and Raagmaa 2010). Since entering the EU in 2004, the agricultural
sector in Estonia has been upgraded by the Common Agricultural Policy, including agroenvironmental and rural development schemes which encourage rural people’s community life on
the micro level. Rural diversification policies mainly focused on tourism and recreation in
Estonia, mostly building new lodging capacity, and did not support many new manufacturing
start-ups. Similarly, white-collar jobs have steadily been disappearing in Estonian rural areas, as
regional policies have not coped with the need to restructure: only about 10% of ERDF regional
policy measures money has been invested in industrial restructuring since 2007 (Enterprise
Estonia 2012). Due to administrative centralization most central government agencies and state
owned enterprises (eg. State Forest Management Centre, Estonian Post) have concentrated their
operations to the capital city and some regional centers (Põhjala 2013). 80% of enterprise
development and innovation measures were directed to the two largest city regions with only half
the population, leaving rural centers without any remarkable restructuring support (Raagmaa et
al. 2013). The above confirms empirical evidence from the Nordic countries with similar disperse
rural populations, which demonstrates that primary branches have not been able to preserve
employment despite intensive public policies (Copus 2007). However, differently from the
Nordic regional policies which have supported restructuring of rural regions, the Estonian
approach has been unsuccessful.
8
The status and trends of Estonian remote rural areas
Research questions and indicators
In analyzing the causes of peripherization, the complexity of historical legacies, social structures
and governance issues need to be considered. Processes in local communities progress according
to internal causal factors that may impact structural and social change. A hypothesis is raised by
which remote rural areas in Estonia are increasingly diverse, depending on their position relative
to urban core areas and also on their natural and cultural amenities. Locational advantage should
hypothetically benefit amenity-rich and better accessible remote rural areas, which means that
their demographic situation (both permanent and seasonal), entrepreneurial activity and social
affairs should be in a considerably better state compared to amenity-poor and less accessible
locations.
A good social environment and strong viable communities are characterized by the institutional
thickness of the community, for example, by the number and membership of NGOs. The
availability of services also has a positive impact on residential and recreational activities. It is
assumed that socially active and service-secured communities have a decreased tendency of
peripherization, since they attract new and returning residents and visitors (Agyeman and Neal
2009).
The following clusters of data are used to assess human assets in peripheral rural areas:

Proximity: distance from Tallinn, Tartu and county centers;

Demography: population, population density, age groups, seasonal/temporary inhabitants,
etc.;

Socio-economic status: unemployment, discouraged persons, dependence on social
security benefits, education, income, sector distribution, enterprises, NGOs, etc.
The basic unit of analysis is the Local Administrative Unit (LAU, NUTS 5) as defined by local
authorities - municipalities. If data on that level unavailable, regional (NUTS 3) and county
(NUTS 4) level aggregates are used.
Identifying remote rural areas in Estonia
Two basic categories of peripheries: (1) remote and (2) exposed-to-risk are specified. Remote
rural areas are defined according to the following criteria:
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1) long-term exodus: total population loss is more than 50% since 1959,
2) short-term exodus: annual average population loss over 1% since 2000.
The long-term period is chosen on the basis of census data availability and with the aim of
lessening the effect of short-term demographic fluctuations in the 1990s, caused by changes in
birth rates, migration to Russia, counter-urbanization and commuting. The category “exposed-torisk” is defined by objective geographical features: population density and proximity to a county
center. Rural municipalities are exposed to the risk of peripherization if their population density
is less than 8 inhabitants per km2 and/or the distance from a county center is over 50 km or the
driving time is 45 minutes across the country, a criterion used Europe-wide by Dijkstra and Ruiz
(2010). The authors have marginally adjusted the strict statistical criteria in a few instances due to
other peripheral features and indicators. The focus is not specifically on uninhabited areas but on
local communities that are economically vulnerable due to the small size of the labor and
consumer market which makes it difficult to deliver private and public services cost-efficiently.
A two-stage exclusive approach has been chosen – areas which are already nominated as remote
are not assessed according to exposed-to-risk criteria.
Table 1 about here
Figure 2 about here
Remote rural Estonia forms roughly half of the country’s territory (22,724 km2) and includes
about 11% of the population (141,322 inhabitants, see Table 1). The map in Figure 2 shows a
clustering of peripheral rural municipalities in Eastern and Southern Estonia, on borders with
Russia and Latvia, and also in Western Estonia and the archipelago. An inner-periphery develops
in Järva and Rapla Counties, areas of loosening hinterland of Tallinn and of highly intensified
agriculture.
Demographic trends
Depopulation over an extensive period could be the best indicator of peripherization, reflecting
several negative causation cycles. Rural exodus in the Estonian countryside began after World
War II and lasted for more than 60 years in most remote areas. A stage of relative de10
concentration in the demographic structure began at the end of the 1970s. In general, rural
population began to rise after 1983 (Katus 1989). Due to the growth of the agricultural sector,
new jobs and higher wages spread all over Estonia with the exception of Southern Estonia
(Marksoo 1992) and some other remote areas. Rural growth was mainly based on Estonia’s
specializing on supplying food to the industrial regions of the USSR. At the beginning of the
1980s, the so-called “Soviet nutrition program” raised procurement prices and facilitated both
collective and private farm production through subsidies.
Figure 3 about here
During the growth period of rural areas, the annual population decline continued in remote rural
areas and reached -1.6% between the 1960s and 1980s. This was due to the concentration of
production and new housing estates in collective farm centers (Raagmaa 2009). The agricultural
reforms of the early 1990s and weak rural and regional policies throughout the 1990s amplified
the negative demographic processes. Demographic decline between remote and exposed-to-risk
areas differs since the 1980s. Remote rural population decreased by -1.05% on a yearly basis
compared to areas exposed-to-risk (-0.4%) and the Estonian average (-0.2%) 2000-2012 (Fig. 3).
The proportion of elderly population (65 and older) has increased in remote areas, nearing a
quarter of the population. The elderly also move from costly urban residents to their restituted
farmhouses or summer cottages. The young-to-old ratio is much lower (0.61) in peripheral areas
compared to the Estonian average of 0.90 in 2012 (Fig. 4). It has decreased by about a half during
the 1990s and 2000s. The ratio indicates a deep aging burden in Alajõe (0.16), Piirissaare (0.18),
Nõva (0.29) and Ruhnu (0.35). Greater out-migration of young women also correlates with
peripherality and discourages starting families. Internal migration of the more competitive and
skilled workforce to the Tallinn metropolitan area, county centers and abroad continues.
Figure 4 about here
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Population density in remote rural areas has declined from 12 inhabitants per km2 in 1959 to 5
inhabitants per km2 in 2010. Many forest villages have died out. The declining population density
causes a multitude of further problems from decreased access to services to scarcity of human
resources. This demographic overview of remote areas uses the official population register and
census data which does not account for weekly commuting and seasonality. According to Ahas et
al. (2010) large seasonal contrasts occur in population residence, especially in the West-Estonian
islands, most of the coastal strip on the Baltic Sea and Lake Peipus, and in the South-Eastern
hilly landscapes. Population at seasonal municipalities differs twofold between winter and
summer months, having exceptional highs in Alajõe (+356.7%) and Illuka (+155.5%) on the
Peipus coast, Vihula (+161.8%) in the Lahemaa National Park on the Gulf of Finland and Nõva
(+127.8%) on the West coast. All these communities are listed as remote. There is twice the
number of dwellings without permanent residency in the remote areas compared to the Estonian
average. Island counties such as Saaremaa and Hiiumaa have a high share of temporarily used
dwellings (Statistics Estonia 2013).
Table 2 about here
Rural unemployment and poverty
The rural jobs gap is reflected in lower rates of employment and economic activity, higher rates
of unemployment and lower levels of human capital (CEC 2007). The collectivization of
agriculture under Communism concentrated the population in agro-towns which are now in
decline. A drastic decrease in agricultural production had a devastating effect on rural areas. The
sown area of field crops decreased by 46.9%, milk production by 45.7%, cattle by 70.4% and
pigs by 66.2%, while agricultural employment declined by 86.2% during 1989–2011 (Statistics
Estonia 2012). In 1989, 174,500 people were employed in the primary sector (140,600 in
agriculture) which counted for 20.8% (16.8%) of the total workforce. Primary sector employment
of 19% dropped to 7.1% (6.7%) by 2000 and further to 3.7% (2.6%)) by 2009. The established
rural enterprises surrendered social functions and community services – part of these functions
were taken over by municipalities but larger share of service jobs just disappeared due to low
demand and are now partly supplied by some village societies on a voluntary basis.
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This transition resulted in the rapid growth of rural unemployment and out-migration. The
decline primarily affected remote areas since two thirds of the jobs were in the primary sector.
Over the previous decade, constant decrease in the share of employment in the primary sector (1–
2% per year), growth of the secondary sector (about 1% per year) and stabilization of tertiary
sector (at 50–53%) have been observed. Many rural areas, tied to city-region functionalities,
became processing or service oriented, but this is seldom the case with remote rural areas.
Similarly to other European convergence regions, EU funding acted as a capital subsidy and had
a negative effect on jobs in a low skill environment (Mohl and Hagen 2011). The labor markets
of regions that are remote from the main centers of economic activity have distinctive
characteristics (SERA 2006).
Figure 5 about here
In the 1990s, employment rates declined by half in remote areas. During the economic boom of
the mid-2000s, employment in remote areas did not recover as it did in urban areas. Remote areas
have the small number of suitable jobs and the low level of income which makes it hard to retain
and attract skilled workers. Entrepreneurship in rural areas is lower (69.2 firms per 1000 persons
in 2011) compared to the Estonian average (78.6). If 9.6 workers were employed per company in
2005, only 5.6 were employed in 2010, reflecting the productivity increase of the late 2000s
(EULS 2012). At the same time, in terms of supply, the availability of skilled labor is poor.
Rural labor mobility has considerably grown in recent years. 50% of rural employees used to
have employment and residence in the same place in 2000 but, by 2010, only 41% worked in the
municipality of permanent residence. The number of rural people employed abroad has also
grown significantly from 1100 (0.7% of the employed) in 2005 to 8600 (5.2%) in 2010 (Statistics
Estonia 2012). The effects of commuting and declining employment trends are far from clear cut.
The employees in rural labor markets are faced with three alternative pathways – out-migration,
commuting and staying unemployed which usually means work at small so-called subsistence
farms or doing some odd jobs. Salaries of high skilled employees tend to be lower in rural areas
which may lead them to look for jobs in urban areas (EULS 2012). Roughly a third of Estonians
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commute between different municipalities on a daily basis and a fourth change their living place
either seasonally or weekly (Ahas et al. 2010).
The unemployment rate, similarly to other socioeconomic indicators, shows growth in regional
disparities in the 2000s, remaining substantially lower in the Tallinn metropolitan area and in
Tartu. Unemployment is high in Valga (13.4%), Hiiu (13.3%), and Põlva (13.0%) counties. Since
2011 employment has improved significantly due to economic recovery and unemployment has
decreased also as people move abroad in search of better jobs. In some economically depressed
rural areas, official unemployment was as high as 30% in 2010 (Statistics Estonia 2012).
Unemployment among rural men compared to women was higher by a third (Ministry of
Agriculture 2012). Registered unemployment in urban and remote areas does not differ much. In
reality, unemployment in rural areas is much higher than the official figures indicate, being often
masked by subsistence farming, seasonal jobs and working abroad.
The speed of structural reform in the first half of the 1990s made it impossible for the Estonian
government, which chose a strongly neoliberal market-driven approach, to tackle the vast
complexity of social issues (Yao 2005). The neoliberal political program was chosen for
implementing structural reforms instead of setting social goals and balancing social needs. Rural,
regional and labor market policies were very limited in their ability to mitigate the social
consequences of structural change. The number of discouraged persons is a straightforward
indicator for the marginalization. That number is four times higher in remote municipalities than
in urban areas. The increase of discouraged people among rural inhabitants with a lower level of
education, particularly among men, is a major marginalization characteristic.
Figure 6 about here
Rural poverty mirrors the distribution of unemployment. Between 2000 and 2010, the poverty
rate among persons at-risk-of-poverty (those living in a household with an equalized disposable
income below the risk-of-poverty threshold, which is set at 60% of the national median equalized
disposable income (after social transfers)) in urban Estonia increased from 13.5% to 16% while
remaining largely at the same level or even decreasing slightly (from 21.7% to 20.5%) in rural
areas (Statistics Estonia 2012). This can be explained by the 2008–2010 economic crisis which,
14
in combination with joining the Schengen Area in 2007 and the opening of Nordic labor markets,
made it possible to move abroad. Poverty was highest in the rural counties of Valga (24.7%) and
Jõgeva (23.9%). Yearlong social allowances were granted to 4.14 households in remote areas per
100 inhabitants and 2.88 households in areas exposed-to-peripheral risk, compared to just 0.05
households in the Tallinn hinterland (Statistics Estonia 2012).
Welfare, income and services of general interest
Disparities in regional GDP per capita have increased since 2000: on the county level, from 2.9
times in 2000 to 3.6 times in 2010, remaining below 50% of the national average in the rural
counties of Jõgeva (44.4%), Põlva (45,7%) and Valga (48,6 %) (Statistics Estonia 2013). The
average monthly income is 657 Euros in remote areas and 676 in exposed-to-peripheral risk
areas, compared to the Estonian average of 767 Euros. Lowest incomes are found in Peipsiääre
(480 EUR), Piirissaare (496 EUR), Kallaste (511 EUR), which are all on the coast of Lake
Peipus, and Mõisaküla (563 EUR) near Estonia’s Southern border (Statistics Estonia 2012). The
well-being and quality of life for remote rural residents is significantly below the Estonian
average. In remote communities, the share of shadow economy and untaxed income (”envelope
wages”) is considerably higher than in urban and more centrally located rural areas (EIER 2012).
Furthermore, rural schools with their deteriorating quality cause a widening in the educational
divide, motivating young families to leave. Remote areas have 1.5 times fewer inhabitants with
third-level education than the Estonian average.
Decreasing access to services (public transport, shopping, medical and social care) in rural areas
is driven both by technological change (use of ICT and personal cars) and by the retrenchment
and austerity measures in the public sector. Banks and retailers avoid remote rural municipalities
due to an insufficient customer base, with many offices and even ATM-machines that were put
up during the growth years being removed recently. In addition to the labor supply, the rural
business environment very much depends on the quality of the technical infrastructure.
Entrepreneurs consider the condition of local roads the most crucial factor (EULS 2012). Rural
local authorities are increasingly forced to focus on acute social care, thus, failing to initiate and
manage advanced development projects. Most Estonian municipalities do not have direct fiscal or
economic incentives for entrepreneurship, hence, they contribute to the business environment and
life quality indirectly: through the quality of education, culture, recreation and sports, local
15
amenities, local branding and public relations. OECD (2011) stresses in the Estonian report that
the provision of public services in very small (rural) municipalities is inefficient. Thus,
fragmented local government units should either be amalgamated or required to cooperate for an
efficient provision of services.
Alternatives for remote rural areas
The analysis of the present development path of remote areas draws attention to the differences in
their starting positions and framework conditions. The most geographically remote areas show a
steady downward trajectory over decades according to demographic and socioeconomic
indicators. However, some remote areas have been subject to significant shocks in the recent past,
which have not been entirely negative: several restructuring, modernization and diversification
initiatives have brought positive, as we going to explore below – post-productivist, development
trajectories. Primarily, tourist areas, areas of special interest and seasonal living appear in the
category of performing/open and dynamic remote rural areas. These restructured remote areas,
exemplified by Emmaste rural municipality in Hiiu County, Vihula in W-Viru County, Avinurme
in E-Viru County, Häädemeeste in Pärnu County and Värska in Põlva County, have several
common characteristics (see Fig. 2). All of them have a coastal location or some other particular
amenity. These remote municipalities also have several characteristics of social and economic
development in common (Table 3).
First of all, there are well-organized local communities and active leadership on the village or
village group level. Village societies and NGOs are usually also active in local politics which
guarantees in general more efficient and motivated governance. Related to that, the joint feature
is active local politics, campaigning and competition during the local elections, capable mayors
and municipal staff. These municipalities have succeeded in attracting well-educated people,
some of them networking on the national or even international level. This has supported the
application and implementation of several public, NGO or privately initiated development
projects, making these municipalities successful in absorbing external development funds and
measures.
Another characteristic of vitality of these remote municipalities is a much more diversified
employment structure, not only via tourism, which is in most cases employs a remarkable number
16
of local people, but also in other sectors such as manufacturing, construction and services. Still,
more secondary sector jobs are available in nearby county centers, so the joint characteristic for
the restructuring peripheries is the higher personal mobility of labor: commuting for both short
and long distances on a daily and weekly basis. Considered as a whole, this also means a
relatively lower level of unemployment.
Another indicator of success is the presence of places and premises for local gatherings:
village/NGO centers, pubs, tourism farm dining halls, saunas or other places that could house the
frequent meetings of local people and the governing bodies for many NGOs. The availability and
good access to high quality social services such as primary schools, kindergartens, daily care, and
youth centers supports the stability of population in these remote areas. Finally, these
communities have good external image and positive public relations. However, several of these
positive features are not measurable and quantifiable with basic mainstream statistics. Only
mobile positioning data (Ahas et al. 2010), measuring actual movement of people, shows
seasonally and temporarily considerably higher populations within these municipalities than in
the population register.
Table 3 about here
Naturally, these findings and signs of openness or marginalization need precise and systematic
in-depth surveys, though there are multiple arguments which allow us to claim that some
geographically remote communities with poor accessibility do not express socioeconomic
peripherality, as these are interconnected with cities and their part time and seasonal population
contributes to local development to a remarkable degree. At the same time, many nearby
communities continue to decline despite similar natural amenities and endogenous potential. On
the basis of the binary distinction and policy measures for two confronting development paths of
remote rural areas are described (Table 3). First, there is a post-productivist attempt to envision a
future in which policy succeeds in improving the positive characteristics outlined above. Second,
there is the business-as-usual baseline development path for marginalization of remote areas.
17
The post-productivist development path
The post-productivist approach is associated with strong localism and with empowering
communities, the local cultural identity and a renewed sense of confidence. Post-productivism is
a contested concept. Arguably, it is too complex, fuzzy and, like many buzzwords, it is stretched
to unrealistic extents (Mather et al. 2006). The concept that became widespread after the 1990s
reflects a fundamental change in the post-war agriculture. It recognizes the declining significance
of agriculture in the social and economic fabric of rural space, a shift in rural development policy
and the diversification of farm population strategies (Ilbery and Bowler 1998). The postproductivist approach also includes less intensive forms of agriculture and the emergence of the
countryside as a place of consumption, amenity-rich living and recreational environment
(Marsden 1999). The diversity of post-productivism benefits the countryside, including not only
the “back-to-the-country” schemes but also super-productivism and mainstream counterurbanization processes (Halfacree 2006). In combination with environmental activities, all other
kinds of recreation, producer services (training, in particular), tourism and cultural industries
form a wide complex of activities and are highly applicable to rural and semi-rural areas with
natural beauty and a rich cultural heritage.
Structural shifts are captured in the notion of a Consumption Countryside (Copus and Hörnström
2011, EDORA 2009) which stresses diversification and restructuring towards a recreational
economy. Tourism expresses the commodification of the rural environment and the attractive
heritage. Within this path, niche or specialized agriculture (such as ecological food, horticulture
and energy crops) is a substantial part of rural economy, triggered also by climate change and
environmental policies. The value chain of renewable energy has boomed in the late 2000s next
to clean-tech manufacturing and support services that are increasingly positioned in rural areas
(Roose et al. 2012). Natural resources and amenities are seen as a strategic asset and they have an
important role to play in the new economy. Remote villages are an abundant source of
inexpensive land and housing, attracting urbanites to invest into second homes.
Emerging recreational services and tourism have been considered a smooth restructuring
platform, although their socioeconomic impact was somewhat over-emphasized. The number of
tourist farms has increased to a noticeable extent. Referred to as “agriturismo” in Italy, “sleeping
in the straw” in Switzerland, “farmstays” in New Zealand and “farm holidays” in England,
18
agritourism is spreading in Europe and elsewhere (Rilla 1999, cf. Beus 2008). The number of
rural accommodation establishments in Estonia (including tourism farms) grew from 333 in 2001
to 763 in 2010, an increase of 129% (Estonian Rural Tourism 2010). Despite seasonality and rely
on lower-qualified labor, tourism is an important asset for the localities because it values a
positive living, supports business environment and attractive public relations.
The number of seasonal rural inhabitants increases by third during summer in Estonia (Ahas et al.
2010). Second housing and holiday-making in rural locations means extensive weekly
commuting off season and has a number of preconditions and restrictions. First of all, there is a
preference for accessible places, less than one-hour-drive, with natural and cultural amenities. A
secure social environment is another precondition. The availability of local services like sports
facilities, shopping centers, bars, taverns, and restaurants also has a positive effect (Marjavaara
2008). Consequently, second homes and lifestyle migration form one way of mitigating
marginalization in remote areas.
In addition to the recreational sector, the post-productivist scenario focuses on accessibility to
urban labor markets, this is implicit in many official typologies of rural areas, such as those of
OECD and DEFRA and the ESDP. Rising mobility is pushing rural localities towards the postproductivist model. Distance from a large urban center that generates growth has fed rural
development from a spill-over effect (Dijkstra and Poelman 2008). As car ownership has
substantially increased people’s mobility, labor market areas have significantly widened, and the
willingness to commute up to 50 km daily (CASS 2011) gives remote rural dwellers access to
employment centers and also giving them access to a wider range of services. This 30–40 minute
approach has been applied for the National Spatial Plan “Estonia 2030+” (Eesti 2030+, 2012).
Modern communication tools, especially the spread of high speed mobile internet in the 2010s
enables people to work in the countryside without extended stays in the city. However, the
impact of ICT to distance and part time work is still unclear and might have too high expectations
attached to it.
As the importance of secondary and tertiary sectors in rural economies increases, the nature and
strength of the urban-rural linkage have become increasingly important to their well-being. Small
and medium sized towns fill an important employment function for rural residents in sectors that
exhibit particularly strong levels of local economic integration in and around such towns (Mayfield
19
et al. 2005, Courtney et al. 2007). New business and technology parks are born in remote Estonia
(e.g., Räpina, Sõmerpalu, Viru-Nigula). For local empowerment and the use of city-region
functional networks, intra-and inter-sector cooperation between regional innovation and
developments needs supportive measures and tools (Värnik 2011). The strength of rural
communities and the multi-stakeholder approach play an important role in revitalizing a rural area.
The marginalization path
The second development path as the baseline scenario involves further marginalization of remote
rural areas. Marginal areas are not ultimately defined by distance. Remote localities, where the
standard of living has decreased, may gradually lose their ties to the rest of the country; their
links to urban regions may become primitive, one-way and colonial. The opportunistic local
micro-culture closes in on itself economically and culturally (and, thus, often also politically) and
becomes increasingly intolerant towards national mainstream policies and views. Next to low
business activity, the lack of societal interaction and an unfavorable business climate, this
segregation is associated with the emigration of young generations who may be disappointed by
rural degradation. Social marginalization has a cumulative character.
The primary sector is highly concentrated and functions within “quota” agriculture. The decline
of primary economies and the rise of unemployment encourage the emergence of shadow
economy (Kockel 1993). Economic recession and unemployment reduce people’s real income
and force some to seek additional earnings. Rural people dealing with primary activities,
handicraft and tourism practice “pocket based book-keeping” and primarily use cash transactions.
Shadow economy and illegal activities like trafficking, forest thefts etc. tend to grow in declining
rural areas. Local marginalizing groupings may distance themselves from national structures (Sik
1994) and they tend to reproduce their own subculture (Putnam et al. 1993). Once established,
informal rules tend to be reinforced and are very persistent. It would be rather difficult to
restructure such areas economically.
The concern with marginalization is related not only to the future of agriculture as a form of
production but also to a much wider range of related issues such as the socioeconomic dynamics
of an area, loss or simplification of cultural rural landscapes and traditional rural lifestyles
(Palang and Printsmann 2010; Roose et al. 2013). In the 2000s, land use, land economy and real
estate were greatly shaped by agricultural change, land restitution and privatization, and
20
ecologization, including broad nature protection regulations such as the introduction of
NATURA 2000 (introducing the network of nature protection areas established under the
Habitats and Birds Directive). Local people are often complaining that central government
agencies set up so called EU-rules they do not understand and which make their further living
complicated. In a reality, several regulations are just ignored.
Thus, it might be impossible or even harmful to apply top-down policy instruments without
considering the specifics of the local resources and culture. Marginalization could be
counteracted by establishing a distinctive branding and niche for the rurality and by searching for
synergies based on territorial assets, seeking tiers between “remote rural” and “technology” for
diversifying and growing sectors such as leisure and tourism and higher-added-value primary
sectors.
Conclusion
This study critically addresses the status of Estonian remote rural areas and their human assets,
questioning rural fundamentals and doctrines that have dominated through the 1990s and 2000s.
Unfavorable trends in remote rural Estonia are characterized by a complex relationship between
depopulation, weak entrepreneurship, skills shortage and social deprivation. Entrepreneurship has
declined in remote rural areas where the low diversity of economic activity and the unavailability
of jobs are major economic issues. Unfavorable trends also concern democracy and the civil
society: conservative leaders tend to work against new initiatives, inward investment and
business allocation decisions. Economic inability in village communities in a globalized and
urbanized Estonia and world requires a stronger public policy intervention on the national level.
Current interventions, including the Common Agricultural and Cohesion Policies, have been
unable to turn the tide of depopulation and loss of production-related jobs in remote areas.
The depopulation of remote areas has continued in Estonia for more than half a century and this
has multiple implications. The restructuring that occurred after 1990 made social impacts more
acute and accelerated marginalization. But remote rural communities are far from homogeneous
in terms of human and territorial categories, most commonly differentiated by urban region
processes in the hinterland which highlights their dependence on environmental amenities. The
typology used in this survey distinguishes remote areas from areas that are “exposed-to-risk” of
21
peripherization. It embraces conventional geographic as well as socio-communicative and
socioeconomic peripheries characterized by negative natural growth rates, out-migration of
young people and ageing populations. In small and isolated settlements, maintaining access to
services is costly, functioning and balanced labor markets nonexistent and the quality of
infrastructure (energy, transport, communication) highly variable.
Two bold development scenarios are proposed for remote rural areas: post-productivist versus
marginalization. For the post-productivist path, remote rural areas should provide a range of
quality amenities to attract highly skilled, high value-added and knowledge intensive distance
workers. Based on their endogenous and territorial assets, remote communities have to establish a
distinctive sense of local identity (Agyeman and Neal 2009) and a brand of products and services
in relation to diversification within urban networking. In terms of economic vulnerability and
resilience, it is impossible to identify one typical economic structure or labor market profile. With
many of the specializations that remote areas have, they are directly or indirectly linked to their
geographic specificity as, for instance, is seen in the strong focus on tourism found in many areas
which undermines the scale of economy, the size and profile of target markets. Economic
specialization also relies on natural resources that are only found in particular locations. Focusing
on a typical activity is not necessarily an advantage, since many of these activities (such as
agriculture, forestry or fishing) lead to a decrease in employment through rationalization and
mechanization. Primary products of low added-value do not generate high income for the areas,
though they may create a competitive advantage regionally and internationally. Both agriculture
and tourism tend to be marked by seasonal employment. At the same time, environmental and
historical values should be protected and regenerated. Rural assets (heritage landscapes and
active local communities) can offer opportunities to find innovative solutions (e.g. specialized
nature tourism, ecological agriculture) to counterbalance differences between remote rural and
urban areas.
The new rural geography is not entirely distance dependent. Several of the above listed
municipalities are the most distant ones on the core-periphery axis, whereas similarly located and
resourced neighboring communities have remarkably different development patterns. Local trust
and togetherness that form the local identity might be decisive factors in economic restructuring
(Raagmaa 2002). Thus, reasons for successful local development can be also found in existing
local networks and power relations. Overcoming such internally generated and reproduced
22
peripherality and the absence of economic and social connectivity means introducing new forms
of governance and territorial cooperation (Bryden 2007). Rural development trajectories are
generally negative in peripheries but they are not as uniform as current population and economic
statistics show. In fact, some data does not reflect reality. Due to increased physical and virtual
mobility, which has been reflected in commuting distances, the consumption of rural amenities is
spreading and the population of several remote communities has changed in a positive postproductivist mode, being supplemented by part-timers, people close to their retirement age and
specific communities. At the same time, deterioration and marginalization of other remote rural
settlements can clearly be observed.
Acknowledgements
This survey was supported by the Estonian Target Funding Project SF0180052s07, Institutional
Research Grant IUT2-17, Grant ETF7459 of the Estonian Research Council and the FP7PEOPLE-2013-ITN project “Socio-economic and Political Responses to Regional Polarization in
Central and Eastern Europe“ PITN-GA-2013-607022. The authors wish to thank two anonymous
reviewers for their constructive feedback and Ms Pille Põiklik for language editing and proofreading.
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FIGURE 1. The factors of the cumulative stagnation cycle of rural areas (adapted from Drudy
1989).
29
FIGURE 2. Peripheral municipalities in Estonia (Source: Statistics Estonia 2012, authors’ compilation).
30
%
2.5
2.0
Tallinn metropolitan
Estonian average
Exposed-to-risk
Remote
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
1959-1970 1970-1979 1979-1989 1989-2000 2000-2012
FIGURE 3. Annual population change in different type of areas compared to the Estonian
average (Source: Statistics Estonia, censuses data, authors’ compilation).
31
Young-to-old ratio
2.5
Remote
2
Estonian average
1.5
1
0.5
0
1989
2000
2012
FIGURE 4. Young-to-old ratio in remote rural areas compared to the Estonian average. Old:
65+; young: 0–14 years (Source: Statistics Estonia, authors’ compilation).
32
%
40
20
0
Primary sector
Secondary sector
Tertiary sector
Employed total
-20
-40
-60
-80
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
-100
FIGURE 5. Dynamics of cumulative employment by sectors in remote areas (Data: Statistics
Estonia).
33
2010
2009
2008
2007
2006
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
2005
Remote
Estonian average
%
10
9
8
7
6
5
4
3
2
1
0
FIGURE 6. The share of discouraged persons among the active population (20–64%) (Statistics
Estonia 2012).
34
TABLE 1. Estonian peripheral areas in 2011 (Statistics Estonia 2012).
Category of
Residents
Territory
Peripherality
Inhabitants
% of Estonia
km2
% of Estonia
Remote
49,461
3.7%
8,616
19.0%
Exposed-to-
91,861
6.8%
14,108
31.2%
risk
Total
141,322
10.5%
22,724
50.2%
35
TABLE 2. Share of dwellings without permanent residency from the total in 2011, % (Data:
Statistics Estonia 2012).
Estonia (total)
Remote
Exposed-to-risk
Hiiu County
Saare County
Vihula municipality
14.2
31.9
26.0
30.3
32.9
53.9
36
TABLE 3. Main features of two prospective paths: alternative development path versus
marginalization.
Characteristic
Alternative (post-productivist) path
Marginalization path
Population trend
Stabilizing with balanced age structure
Declining and ageing
Employment structure
Diverse, partly based on commuting
Primary sector only, extensive
agriculture
Unemployment rate
Low, below 10%
High, over 10%
Personal daily/weekly mobility
High
Low
Availability and access to social
services
Good
Problematic, varies
The role of external development
(incl. EU) funds
High
Low
Number of local non-farming
enterprises per 100 inhabitants
High, over 5
Low, below 5
Number of NGOs per 1000
inhabitants
High, over 10
Low, below 10 or none
Places for local gatherings
Many
Few or none
Social capital (SC) and trust,
networking extent
High trust on micro-community level,
balanced bridging and bonding SC,
different networks
Low trust, dominant bonding SC,
local networks only
Community (strength, identity,
image, etc.)
Several active communities with strong
local identity, pride and leadership,
improving image
Diverse community pattern; few
active village societies, informal
ties, low leadership capacity;
worsening image
Long term perspective
Sustainable communities with high quality
living environment
Declining villages with few
farms and summer houses
37