Sweden’s Economy – Still
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Sweden is still one of the wealthiest countries in the world, even though it went through an economic crisis in the early Nineties.
Sweden used to be agricultural, but is now a highly developed, industrial country. More than 90 percent of the industry is privately owned.
It is Europe’s largest producer of timber products. Also mining (iron-ore) is of significant importance. Swedish agriculture is almost self sufficient.
Manufacturing products of Swedish origin include paper, electrical goods, trucks and cars, food products, chemicals, metal products and machinery. Foreign trade is very important.
Sweden's economy had a long way to go before it reached this point.
During the 17th Century the nation was one of Europe’s leading powers, with an empire that included parts of Germany, Poland and Russia. But the empire declined and by the early 19th Century the country was completely impoverished.
The Swedish leaders - who were very much in control of Sweden's economy back then - decided to do it differently. They opened the door to free enterprise, improved infrastructure and made the forests, ores and hydroelectric power accessible to export markets.
The development from an agricultural into a modern, industrialized nation was successful.
The world wars during the 20th Century even helped the Swedish industry. The country remained neutral which gave manufacturers the opportunity to export to belligerent nations and benefit from the postwar reconstruction.
From 1945 to 1970 Sweden flourished like almost no other country in the world.
Taxes were high, but nobody complained, because the money was well spent. It delivered a very good educational system, excellent health care, a revolutionary child care system and numerous other social benefits and insurances.
The social solidarity in the Nordic country was amazing in the eyes of others. Parts of the social insurance system were copied by other Western European countries. The Swedish system was often referred to as the third way – the alternative to both capitalism and socialism.
The word 'socialism' didn't mean people couldn't get rich. The Forbes list of billionaires 2005 still mentions nine Swedes, showing the power of Swedens economy.
After some temporary setbacks in the Seventies and Eighties, Sweden went through a serious economic crisis in the early Nineties.
Unemployment rose to a level that was previously unseen. Social insurance systems were reformed to cut costs, and taxes were lowered.
However, Sweden's economy once again proved to be vital and recovered almost quicker than expected. Unemployment fell back, inflation got low (only 1.9 % in 2003) and the krona regained some of its strength.
As in many other countries, Sweden's economy has suffered severely from the economic recession which started at the end of 2008. Thousands of Swedes lost their job. If the government and Swedish business world find a way out of the crisis largely depends on international developments.
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