Swedish social democracy has lost some of its gloss, but still has striking achievements
Sweden can be divided into three regions. The largest, in the north and centre, is Norrland whose mountains and forests constitute around 60% of the country. In the far south is Götaland, which includes the Småland Highlands and, on the southern tip, the plains of Skåne. Between these, in the south-centre, is Svealand, a lowland area with numerous lakes.
Sweden's people until recently were ethnically quite homogenous—the largest minorities being people of Finnish origin and small numbers of the reindeer-herding Sami in the north. From the 1970s, however, Sweden's liberal immigration and asylum policies welcomed people from further afield. In 2007 around 13% of the population were foreign born. Previously immigrants tended to come from other Nordic countries, but in the 1990s many people arrived from further afield as refugees.
Sweden's people enjoy one of the world's highest standards of living. Between the 1930s and the 1970s, Sweden created an extensive welfare state. Around 85% of healthcare expenditure, for example, comes from public sources. This has ensured that the benefits of economic growth have been equitably distributed.
Some of the credit for this must go to a strong civil society, including well-organized trade unions and a large number of voluntary organizations. Sweden has also created other institutions like the ‘ombudsman’, which many countries have since copied. Public-sector spending has been reduced in recent years but in 2007 still accounted for over 53% of GDP, and the government employed 33% of the workforce. Most of this expenditure is based on local taxes spent by local governments.
Sweden's early industrialization was based on raw materials like wood and iron ore, though it has neither coal nor oil and is heavily dependent on hydroelectric power. Forestry provides around 11% of exports. Minerals are also still important: Sweden produces most of the EU's iron ore. But Sweden's investment in education also ensured that the country could move rapidly to higher levels of technology. In the internet age Sweden has the advantage that many of its people speak English well.
This small country has also produced some of the world's leading manufacturing companies including SKF, the world's largest producer of ball-bearings, and the Swiss–Swedish engineering group ABB. Some leading companies like Saab and Volvo have had their car divisions bought up by US companies, but Volvo and Scania are among the world's largest producers of trucks. And one of the most striking successes has been the telecommunications company Ericsson.
As a result, Sweden has become a major trading country. Exports are over half of GDP. Remarkably, around 40% of the shares on the Stockholm stock exchange are controlled by one family, the Wallenbergs.
Sweden is a generous aid donor
Sweden is also one of the world's most generous aid donors, giving around 0.5% of GDP in official development assistance grants—one of the highest proportions in the world. It has also offered assistance to the Baltic states.
Sweden's successful socio-economic model started to come under question in the 1970s and 1980s. Economic growth had slowed and could no longer support public expenditures. By the early 1990s the economy was deep in recession and unemployment had shot up. This forced the government to cut back on welfare spending, though by the standards of other countries, these changes have been modest. The economy has since revived. Unemployment in 2009 was 8%.