• Sweden edition
 
Sweden's economy on display in Davos
Carlsson, Reinfeldt, Bildt, Borg--Regeringskansliet; World Economic Forum/Flickr

Sweden's economy on display in Davos

Published: 28 Jan 2011 09:01 GMT+01:00
Updated: 28 Jan 2011 09:01 GMT+01:00

Sweden is currently much talked of throughout the world. At international meetings, we are greeted increasingly often with positive comments and sometimes pats on the back. The reason is that our economy and social model stand out compared with those of other countries that are burdened by the crisis. Strong public finances, high growth figures and unemployment levels that are gradually on the decline make Sweden, in many ways, unique in international comparisons.

The way we are building society is also stirring curiosity. In Sweden, we do not have the deep divisions that cause social tension in other countries. Instead, there is a great deal of confidence between people here, which creates both a sense of security and the opportunity to develop. We have a well-developed welfare system that levels the playing field of life opportunities. We require equal accountability of both employers and employees, and at the same time, we are home to many successful and innovative export-oriented companies. Our public institutions are relatively efficient, we have minimal corruption and, unlike large parts of the rest of the world, we have growing confidence in politics and political representatives.

Sweden also has the major advantage of being a gender-equal society. Good childcare provision and pre-schools have enabled women and men to participate in the labour market on more equal terms. This creates not only greater personal freedom, but also a higher level of growth and development.

Over the next few days, representatives of politics, the business sector and community life will meet in the Swiss winter resort of Davos for talks and discussions. There are a number of topical issues and challenges on the agenda. One key item on the agenda is the Nordic model, where Sweden is one of the countries in focus. This is, of course, pleasing and gives us cause to feel proud.

In this flurry of encouragement, where our economy has been likened in strength to Pippi Longstocking, it is important to remember that our strong position builds on long-term reform efforts that have sometimes been very hard. Sweden has drawn important conclusions from previous crises that have affected us. In recent decades, governments of all colours have taken necessary measures to make Sweden stronger and better able to withstand both the challenges of globalisation and the fluctuations of crises, without abandoning the core of the Swedish social model.

In the wake of the crisis in the 1990s, a number of key foundation stones were laid to ensure that Sweden was on stable ground. An independent central bank, clear rules for fiscal policy and the pension reform were perhaps the most important elements. The importance of EU membership for the development of both legislation and regulatory frameworks, and ways of thinking, must not be underestimated. Add to this the numerous deregulations and privatisations that have opened up new opportunities for the Swedish economy. All of this has been important for Sweden’s development, but it is not enough to explain the strong position that Sweden has here and now.

During the crisis in the 1990s, total production (GDP) fell substantially three years in a row and employment dropped by 11 percent. At the same time, the budget deficit was around 10 percent of GDP for several years and the national debt rose from 45 percent to almost 80 percent of GDP. The crisis brought cuts, tax rises and social exclusion in its wake.

Such was not the case this time. We avoided locking up large sums in subsidies to industry and bank support. Instead, Sweden has shown its ability to take responsibility for its public finances and at the same time pursue an active labour market policy and make major additional contributions to core welfare activities. Today, the national debt is lower than in 2006, and we have 100,000 more people in work now than before the financial crisis.

Crisis-struck countries are now looking to Sweden, to learn from our example. However, it is not only the cornerstones of the economy that are arousing interest. There is also curiosity about the reform policy to get more people in work that has clearly contributed to the crisis having less of an impact than many expected. The image of a country with a world title in tax burdens on low and middle income earners, a rigid labour market and social insurance systems that pushed people into sick leave and early retirement is now changing.

In a short period, the Swedish tax burden, particularly on low and middle income earners, has decreased markedly. In total, the implemented stages of the in-work tax credit and our declared reform ambitions equate to around 2 percent of GDP in 2011. Sweden is therefore making excellent progress in its ambition to shape income taxes in a way that counters marginal effects and poverty traps and enduringly raises the employment level.

Labour market policy has also been reorganised to focus on activity and adjustment. Alongside clearer requirements and rules for transfers and benefit payments, this has discernibly lowered the thresholds into the labour market. In addition, reforms to the sickness insurance system, with improved support and more paths back into work, mean that in a short space of time Sweden has lifted itself off the bottom of the Western world’s sick leave league.

In a time when other countries have acted for more closed borders and increased protectionism, Sweden is a clear exception. We have a solid reputation in efforts to increase free trade and bring down border barriers. Moreover, Sweden has proved that even a small and trade-dependent economy can assert itself relatively well in the face of growing global competition. We are among the top countries in world rankings for factors such as competitiveness, technology and innovation climate. Sweden’s investment in research, at nearly 4 percent of GDP, is exceeded only by Israel in the OECD statistics.

The image of Sweden that is now emerging in the rest of the world corresponds to all of this. It is, to some extent, a new image of Sweden that challenges what other countries have come to see in Sweden and where it is heading. We are convinced that our country has valuable experiences to share with regard to the efforts that have got us where we are today. At the same time, we must dare to be frank: the strong position we occupy today has not developed of its own accord, nor will it endure without continued social reforms.

In our own recent history and immediate vicinity, we have seen clear examples of how rapidly success can turn into decline. We must not, therefore, allow praise to deceive us into thinking that we are the finished article. We cannot afford to rest on our laurels. Sweden is facing a number of key challenges.

We must ensure that we once again attain a surplus in our public finances, so that we are well equipped for the next crisis. We must also nurture the recovery and move Sweden even closer to full employment. Despite strong employment growth, unemployment levels are still far too high. The work-first principle and a properly functioning labour market will continue to be absolutely crucial in reducing exclusion.

Continued reforms will contribute to enduringly high employment, promote high productivity growth and strengthen Sweden’s competitiveness. In concrete terms, it is a matter of continuing efforts to create good conditions for education, research, entrepreneurship, innovation and running businesses. The importance of accountability and reforms cannot be overstated. In a world where the financial crisis continues to make itself felt, this will be Sweden’s most important message.

Fredrik Reinfeldt, Prime Minister

Anders Borg, Minister of Finance

Carl Bildt, Minister of Foreign Affairs

Gunilla Carlsson, Minister for International Development Cooperation

Related links:

Paul Rapacioli (paul.rapacioli@thelocal.com)

Your comments about this article

23:16 January 28, 2011 by sureiam
aha, Hypocritical swedes!
10:13 January 29, 2011 by Nemesis
This is nonsense.

All growth in the economy is based on exports to the growing German economy.
14:18 January 29, 2011 by miss79
bullshit article...german ,norway, denmark, finland are doing better than sweden..
18:51 January 30, 2011 by BobWas
Boy, these guys are full of it.
00:59 February 1, 2011 by Luke35711
So far it looks like the praise is rightly earned; but only if this is not achieved through a housing bubble. Please, also note that the honors should be shared by the Leaders, and the People alike. The great silent majority of citizens in Sweden

are honest, hard-working, creative, tolerant, and very dedicated to their beautiful northern land.
09:47 February 3, 2011 by Great Scott
What crap you talk, can you not see these conservative cronies are lying to you?

Sweden's unemployment is growing all the time and is amongst the highest in Europe.

If it is so good in Sweden why are the unemployed being forced to work for free?
14:31 February 6, 2011 by mikmak
Great Scott, the second result on a Google search for "european unemployment" does not agree with you:

http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-01022011-AP/EN/3-01022011-AP-EN.PDF

Of course, arguing with facts is maybe a waste of time here...
Today's headlines
Stockholm 'sub hunt'
Sweden calls off suspect submarine search
Ships are returning to shore in Sweden. Photo: TT

Sweden calls off suspect submarine search

UPDATED: The core search for a suspected foreign vessel in Swedish waters has been called off. The armed forces said they remained convinced foreign underwater activity had taken place but had not identified an intruder. READ  

Diplomacy
US to get first female ambassador in Sweden
File photo: Athena Center for Leadership Studies

US to get first female ambassador in Sweden

The United States Embassy in Stockholm is set to get its first female ambassador after the White House announced it was nominating the Iranian-American ex-investment banker Azita Raji to take over from Mark Brzezinski. READ  

Politics
Sweden to get EU 'Christmas present'
Sweden's Prime Minister Stefan Löfven at an EU summit in Brussels this week. Photo: TT

Sweden to get EU 'Christmas present'

Sweden is set to get 1.2 billion kronor ($168 million) back from the EU on December 1st, according to leaked EU documents which suggest that other European countries will have to make large top-up payments this year. READ  

Science
Asteroids leave mark on Sweden
Astroids can leave marks like these. Photo: TT

Asteroids leave mark on Sweden

Some 458 million years ago, Earth was whacked in a double asteroid strike, leaving craters visible in Sweden today, space scientists have reported. READ  

New coalition
New coalition reveals 'compromise' budget
Prime Minister Stefan Löfven and Green Party leader Åsa Romson. Photo: TT

New coalition reveals 'compromise' budget

UPDATED: Prime Minister Stefan Löfven's Social Democrat-led coalition has revealed its first budget proposal, listing plans to spend more than 20 billion kronor. READ  

Royal family
Swedish royal couple set wedding date
The couple pictured in the summer. Photo: TT

Swedish royal couple set wedding date

Sweden's Prince Carl Philip and Sofia Hellqvist, who got engaged earlier this year, have announced they will marry next June. READ  

Analysis
Sweden Democrat threats 'just a show'
Sweden Democrat leader Jimmie Åkesson. Photo: TT

Sweden Democrat threats 'just a show'

There is talk that the nationalist Sweden Democrats could trigger a fresh election, by rejecting the new coalition's budget. But leading Political Scientist Li Bennich Björkman tells The Local that the party is just game-playing and should be focusing on getting its fatigued leader back. READ  

Lifestyle
What's On in Sweden: October 24th - 31st
Chocolate and liquorice are on the menu in Gothenburg this weekend. Photo: Shutterstock

What's On in Sweden: October 24th - 31st

A secret gig in Stockholm, a short film festival in Uppsala and a gastronomy event in Gothenburg have caught our eye this week. READ  

Science
Astronaut helps launch first student satellite
Christer Fuglesang on a previous space mission. Photo: TT

Astronaut helps launch first student satellite

Sweden's debut astronaut Christer Fuglesang is helping students at KTH Royal Institute of Technology to become the first in the country to make their own satellite and send it into space. READ  

Weather
Sweden braces for ten centimetres of snow
Kiruna, in far northern Sweden, has already been hit by snow this season. Photo: TT

Sweden braces for ten centimetres of snow

Sweden's weather agency has warned that up to ten centimetres of snow are on the way for Sweden. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
People-watching: October 22nd
Gallery
In Pictures: Prince Carl Philip and Sofia Hellqvist
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
Blog updates

24 October

Is darkness weather? (Blogweiser) »

"I try very hard not to talk about the weather. This has come after a decade..." READ »

 

21 October

Denna & den här (The Swedish Teacher) »

"“Denna” or “den här”? Swedish language students often ask question about different pronouns. One pronoun that especially..." READ »

 
 
 
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
National
Get 20% off unique Swedish homeware
National
Dentist gives free care to Roma beggars
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
Gallery
People-watching: October 19th
TT
Society
QUIZ: How good is your Swedish?
Lifestyle
What's on in Sweden: October 17th - 24th
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
What's on in Sweden: October 10th - 17th
National
Stockholm is 'best' region for well-being
Gallery
People-watching: October 8th
National
Five facts to know about Patrick Modiano
Society
My Swedish Career: A French fashionista in Sweden
Society
Swede's anti-bully Facebook tale goes viral
Society
Have you seen Sweden's viral subway cancer campaign?
National
Isis: Swedes linked to Turkish prisoner swap
National
Should Swedes be banned from buying sex abroad?
Gallery
Fredrik Reinfeldt's leaving presents
National
Five Swedish TV shows you shouldn't miss
Gallery
A tool belt, a casserole, and a book. Fredrik Reinfeldt's parliament gifts
TT
Lifestyle
Top five winter festivals in Sweden
TT
National
Sami reindeer herders win mine reprieve
Gallery
Property of the Week: Gamla Enskede
Sponsored Article
How to catch the first lobster of the year
Politics
Ten new minister faces you should know
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

967
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN