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Three Seas Talks – H.E. Tiit Riisalo, Estonian Ministry of Foreign Affairs

Stefan: Hi, welcome everyone. I’m Stefan Tompson and I’m the host of this series of podcasts about the Three Seas Initiative for the Institute of New Europe. Today I’m speaking with an expert from Estonia. I’d like to welcome Mr Tiit Riisalo, the Ambassador-at-Large for Connectivity at the Estonian Ministry of Foreign Affairs. Tiit, maybe we could start with you telling us a little bit more about your work at the at the Ministry of Foreign Affairs and a little bit about yourself.

Tiit: Yes, thank you for the invitation. It’s a pleasure to be here. Now briefly about my background. I’m a diplomat working for the Estonian Minister of Foreign Affairs. Before my position here, which is the Ambassador-at-Large for Connectivity, I used to be the chief of staff for the President of the Estonia, Kersti Kaljulaid. As we know the Three Seas Initiative was born from the, or initially was more concentrated around, the presidential institutions. So, I know the initiative already from those days well.

I was also one of the persons who was behind the Estonian presidency of the of the Three Seas Initiative, when it happened  a couple of years ago. As it is getting more and more common in modern diplomacy, we don’t just have ambassadors on concrete states or concrete international organizations, but in the globalized and connected world it is necessary to have ambassadors on issues that we call horizontal. Trusted connectivity, especially in current state of play in the world, is something that is very important to us. So, I deal with all connectivity issues and in broader sense 3SI is definitely still on my table as I see it as one of the most important connectivity initiatives in the eastern part of the Europe which already has implications on wider policy.

Stefan: Connectivity is obviously such an interesting thing from an Estonian perspective. Estonia is an absolute heavyweight when it comes to all things digital. I mean the incredible branding of e-Estonia, this idea of it being a digital hub and the number of unicorns that Estonia has produced, despite being a fairly small country and with a fairly small population. That actually makes your work that much more important and much more exciting in a sense, because of the amount of talent that you have regarding the ability to use the Internet and new tech to generate companies, to push your economic development forward, and to play a leading role in the connectivity aspect of the of the Three Seas Initiative.

Tiit: Yes, you described it well. Actually the ground works for our thinking on these issues were done during our presidency of the Three Seas, while we were preparing for our summit. We also have a pretty good understanding what needs to be done with regards to traditional infrastructure –  transport and energy connections – meaning that we need to conceptualize more on the digital side of it.

When I started to look into this, I prepared a white paper called “smart connectivity for the Three Seas Summit”. The main finding or the main point of that white paper was that digital in itself is not that important on its own anymore, of course outside of the e-governments and e-services; we have to understand that all the major infrastructure projects we have ongoing right now need to have the digital layer. In our telecom submarine cables, in our energy grids, in our transport connections, the digital layer make the infrastructure really effective.

This also could be built up if we share the standards, if we share the design from the very beginning. Only in this case the data which is created by this infrastructure is actually usable. We can build rail services on this, either from the public sector or also from the private sector. This enables us to build really competitive infrastructure and it’s also a true green policy. Because if we build our infrastructure effectively, then according to research, even in traditional sectors like let’s moving cargo by the lorries from the Baltic seaports across Europe, we can save 25-30% on energy costs if this is planned in in a maximum effective way. But for this we need data that we can share, which it is not that easy.

We also see that it is possible to physically damage our infrastructure as we have seen in these recent incidents in the Baltic Sea with certain gas pipes. But it is even much easier to attack the infrastructure digital layer. So we could not go without mentioning the security and cyber security side of this.

Getting back to the Three Seas Initiative, I think the reason this initiative is so important is that we’ve already started to work together on these issues. [Infrastructure and security] are not something that we can do alone. As we are like minded partners also in other political spheres, I think that our cooperation is going well and is really meaningful. We see this especially after the events in Ukraine, which have been like a catalyst in this process.

Stefan: You’ve anticipated several of my questions by giving a very concise answer. There are quite a lot of elements to unpack here. Definitely you expanded a lot from the brief description I gave of Estonia.

There is one thing that I’m seeing from a polish perspective when looking at the Baltics – Estonia, Latvia and Lithuania. I had this idea before I spoke to the experts from Latvia and Lithuania, which is a myth apparently, that the Baltic three were incredibly close and cooperated very strongly. One of the very interesting elements that transpired from both the conversation with the Latvian and Lithuanian was that there’s quite a lot of competition between the three of you, there is a competitive element between, a “siblings” rivalry.  But looking at the Baltics and looking especially at Estonia, and it’s incredible branding,  it seems that despite being a small player, a small country, a small population you manage to massively punch above your weight and actually achieve things that seemed impossible. I mean not only were you behind the Iron Curtain, like us in Poland, but also you were literally absorbed, you were a Republic of the Soviet Union. And yet you had this incredible transformation and this incredible success in three decades. It’s such an interesting perspective to have Estonia be a pretty clear leader in that niche or that sort of pillar of the Three Seas.

You are talking about the Three Seas Initiative from an expert’s perspective, from an ambassador’s position, from the position of a diplomat. It’s something you’ve been aware of for many years. But is the 3SI something that’s well known in Estonia? Is it something that the Estonians are enthusiastic about? Or is this still in the realm of diplomats, of geopolitical experts, of think tanks? What is the broad kind of knowledge about the Three Seas in Estonia?

Tiit: Yeah, I don’t think so, to be honest. If you go to the street and ask about the Three Seas Initiative, then I don’t think it is a well-known brand, unless you do it around the parliament, Ministry of Foreign Affairs or Ministry of Economy where you might randomly ask a state employee. I think there is a lot of work to do in this sense.

I think the momentum we have right now is amazing. It came to us on due to a really sad circumstance, tragic circumstance. But I feel a little bit of pride that we got closer to each other and  put more energy into the Three Seas initiative. It was originally more oriented towards the economic cooperation, but any kind of economic cooperation leads to cooperation in the other fields and layers of society. I think it was a smart move from our side to join in, not only from our own strategic perspective. I think we sort of gave a little bit new energy to the whole movement and now we see, why it is important. Already when we joined it was not only the economic perspective that we had in mind, but also our current history. In the last 30 years, we have mainly concentrated on our closest neighbors, because you know we are a small country and we don’t have the energy to do everything. So, we focused on our Scandinavian partners, which are the biggest markets and on our closest neighbors to the south, Latvia and Lithuania. Somewhere there we also had other diplomatic relationship, but not too much. Now it is the right time to take a deeper look on these other relations as well, because one day they could be needed. We still share a common history and a common understanding on some issues that might influence our very physical security. Now we see that unfortunately it all materialized. Now that we have a practical cooperation in everything concerning Ukraine, I think that the general population in Estonia understands that our true friends are the ones on whom we can rely in the hardest possible moments. Those friends are in the East.

Stefan: Yeah, sure. [You mean] Central and Eastern Europe.

Tiit: Yes. Which without Ukraine will not be complete. Now we have this historic opportunity to win the war together, to help Ukrainians in any way, and then with this momentum to rebuild Ukraine. And we will all win from this, big time.

Stefan: Just a slight digression about something you said about the economic Cooperation leading to change in other fields. It’s interesting because actually some of the problems that we’re facing today with the Russian invasion of Ukraine, some of it is actually rooted in German Ostpolitik. It is my opinion, but also the opinion of quite a few experts and even of some Germans as of late. Ostpolitik was started about five decades ago and is based on the theory called “Wandel durch Handel” – that trade brings political change. The idea of Germans was that if they started trading with Russian, buying their oil, supplying them with pipelines and the technical know-how to build them, that essentially Russia would become reliant on Germany and thus would be forced into change, since it would no longer be beneficial for them to wage war. This policy was started during the communist times. Germany at that time was split in half, so I guess from that perspective it makes sense that Western Germans needed that rapprochement between the two. The lesson is nonetheless that not everyone changes through trade or economic cooperation. I guess a little word of word of caution in this digression…

Going back to what you said about the tragic circumstances in which Ukraine has found itself in. And obviously us as well as NATO flank countries. Despite the tragedy that has occurred, the human lives that are being lost, the destruction and the cultural damage that is being imposed on Ukraine, there has been this incredible momentum as you’ve put it. In the sense that suddenly our countries, I think for the first time ever, the Baltics, Poland, Czechia, Slovakia, Romania and a few other countries in the region have become leaders in the humanitarian aid and the military aid. Obviously relative to our GDP; we can’t compete in donations with the country like the United States of America. But as a percentage of budget, the amount that was given by the Baltic three, especially by Estonia is absolutely astounding.

I agree with your diagnosis that this tragedy offers a truly historic opportunity for our region, and then to bring in Ukraine and eventually hopefully a free Belarus back into this community of Central and Eastern European countries. It’s an extraordinary feeling. From a perspective of a fairly relatively young person that energy is quite palpable. You walk around Warsaw, and you get that sense of energy, hope and a sense of optimism, despite what’s happening. You get that also from Ukrainians. I’d be curious to know if it’s the same with you. You know, despite the fact that they are refugees, that they’re in exile or that they found shelter in Poland and other places, there is a really a sense of optimism about them and that victory is possible. Not only possible, but actually likely. There is really a sense that this tragedy has pushed Ukraine much closer to us and further away from Russia. We still need to defeat Russia militarily, of course.

Going back to the to the Three Seas as seen from an Estonian perspective… What are the main things that interest you as an expert? What are the key opportunities that you see in the Initiative for your country and for your people?

Tiit: As I understand the point of this podcast is to look at the economic perspective. In this context, think it is in some ways instrumental to Estonia to be part of the North-South corridor. Up until now we have just been speaking about it, but now I think we start to believe that it is actually doable. [We need to dream, because dreams inspire us to act in reality. We used to dream about things that could happen in 20, 30, 50 years. But now due to all that happened during the past year, I think we started believing that] we can do something, we can influence the politics of the big European Union and that people are listening to us and doing what we are saying because there is truth to what we are saying.

If we want to build the EU based on equality, and make bigger countries listen to what a smaller ones are saying, we need to start believing more in ourselves – that we can do politics and influence the whole world. The initial idea of the Tree Seas, it was to make the eastern part of Europe as prosperous as the western part. [In terms of economies there is nothing that prohibits to be as prosperous as the rest of the Europe. Now we are actually starting to believe that we can prosper politically as well]. That is why it’s important for Estonia to be part of this 140 million, Ukraine included, growing market that could become one of the most vibrant parts in in the world. So, it’s a complete win situation for all of us.

Stefan: And what would you say are the main challenges that stand in the way of making this reality? We’re at a phase where there is belief and a dream has been outlined. There are projects that have been described, some even started. Now there’s this momentum and a real sense of purpose, which I think is a very important driving factor. But there are of course challenges ahead. What would you say are the biggest challenges in making this happen?

Tiit: I truly don’t see any particular. For example, if we talked in this context about Ukraine, and I’ve been dealing with Ukraine for years, you would say that Ukraine has huge potential, but there is a lot of corruption which kills a lot of the development possibilities. I don’t see this sort of one big sort obstacle that is hindering our cooperation in the Tree Seas. I think, we mainly just need to work and with work we can build the trust. I think trust is an important issue, and it comes from practice. We have had these two really difficult periods recently – the COVID pandemics and now the war.  And we are still standing strong. I think these difficulties taught us the importance of trust. We have already more or less solved the health crisis. Let’s keep our fingers crossed for solution to this conflict as well. So we need to work, with this renewed energy, new connections and renewed trust between the partners. It’s doable.

Stefan: One challenge within the 3Sis, that a few people I spoke with have identified, is the issue of money. There is the Three Seas Initiative Investment Fund that has been set up. There have been some pledges, including a pledge of a billion dollars from the Americans. Regardless of that, we still don’t have the amount of money that the Fund hoped to raise for its projects. How can we find this money?

Tiit: There is no easy solution. What concerns the Three Seas Initiative Investment Fund, which I also know pretty well, is that the expectations of the general public are a little bit too high. Maybe the name is a little bit confusing, because it sort of implies that it aims to solve all the problems in the Three Seas region. This is not and never been the case, or even possible, because the investment needs we have are really huge. They go up to hundreds of EUR billions, even up to trillion, depending on the scope. The Fund’s budget is supposed to around EUR 3 billion. Why the 3SIIF is important then, for example for Estonia? For us it is a valuable case study.  We have put in public funds there and we try to see if we can fundraise private money and get the private sector involved. We want to see if we can make some of cross-border infrastructure projects bankable, see if they can be true investments and bring returns of private and taxpayers’ money back. We have looked at this always as an experiment, a case study. It is also about having a joint marketing campaign of the Three Seas area to bring more private capital.

The problem is that the Fund started and made its first investments in difficult times, first COVID and now the war hit. This coupled with generally unstable global situation, makes attracting big investors not so easy. We hope to attract big pension funds and institutional investors. Nevertheless, the model is still there, and I think we will see how successful it really is after we manage to settle these problems we have right now.

The positive side of this momentum we have, is that we have the eyes of the rest of the world on our part of the region. Reconstruction of Ukraine is going to happen anyway. We must focus on building infrastructure that will keep us connected. And then some more to the West and rest of the world. I think there is enough potential to attract investments on a scale we have not reached yet. [Current challenges are not due to something we did wrong or not being capable. They are external, real-life circumstanced to which we need to adapt.] I think we are ready for closer cooperation.

Stefan: Thank you. Thank you very much for your time. Thank you very much for your perspective. I really like the optimism, the hopefulness of it. I really am on board. I agree with the idea of the momentum. I think it’s an incredible time for our region and I’m really so full of hope. Actually after this conversation I’m even more hopeful than I was. Mr Tiit Riisalo, the Ambassador-at-Large for Connectivity at the Estonian Ministry of Foreign Affairs, thank you so much again for your time and all the best.

Tiit: Yeah. Thank you. Together we will win, we will prevail. There is no other option on the table.

Stefan: Thank you.

Tiit: Thank you.