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Hi Keith!
Things are changing fast.
Ten years ago Finland was in very serious
trouble.
In 1945 Finland had to pay very large reparations
to Soviet (Russia). But Finland was allowed to do it by delivering goods to
Sovjet, and not money, and whole industries was built in Finland to produce
the finished goods to Soviet, and when the reparations were paid Finland went
on producing for Soviet, but now Soviet paid for the goods, often in oil.
And this was a good business for Finland, because Soviet bought whatever
that Finland was able to produce, and bought half of Finland's export. But then
Soviet collapsed ten years ago, and half of Finland's marked's disappeared. The
unemployment rate in Finland became higher than 20%. But within few years
Finland was able to develop new markeds and new industries, Nokia is wellknown.
And today the situation of Finland is much better!!
Sweden, or Ericsson, did not predict the
development of the markets of cellphones (mobile telephones), and that is
the big problem of Ericsson. Ericsson thought that the big market for cellphones
would be professionals and other grown-up groups, and did not see the very
large, and dominant, market of young people. All young people has cellphones,
and because fashions change and because they lose their phones they
often buy several phones every year, while older persons buy one phone
which lasts for a longer time.
Ericsson did not get that dominant marked, but
Nokia did it, and Ericsson is losing money. But that problem is much smaller
than the problems of Finland ten years ago, and when Finland was able to recover
I am sure Sweden will too! Sweden is more than Ericsson! There are ups and
downs, and it is when it is downs that a welfare state is import to keep the
people healthy and fresh!
Tor
----- Original Message -----
Sent: Saturday, June 14, 2003 1:46
PM
Subject: A Volvo without tyres
Hi Tor,
Further to our recent discussion as to whether Sweden
can afford its high spending on welfare or not I quote some paragraphs from a
recent Economist report. (Incidentally, about your own country, the report
says that many Norwegians thinks that oil-bloated success could smother other
parts of the economy, making you lazy, unenterprising and decreasingly able to
generate new value. I'm sure this doesn't apply to you, but this is what the
Economist thinks of some of your countrymen!)
Keith
Hudson
<<<<
Meanwhile Sweden, the region's biggest
economy, has gradually been slipping behind its Nordic neighbours in terms of
income per person. "Sweden has become the poorest in the neighbourhood.
Iceland, Norway, Finland and Denmark are richer and on a better trajectory,"
says Magnus Henrekson of the Stockholm School of Economics. Ericsson, the
country's biggest telecoms-equipment company, is having a rough time. It is
shedding 60,000 jobs over three years, and in April reported its eighth
consecutive quarterly loss.
The city of Stockholm boomed briefly at the
end of the 1990s, mostly because of big investments in technology companies
and heavy spending on research and development, but the shine is wearing off
here too. Swedes worry about the lack of new big companies. Small service
firms do well, but Stefan Folster of the Confederation of Swedish Enterprise
points out that every one of Sweden's 50 largest companies was formed before
1970.
In the early 1990s Sweden's public sector became too dominant
even for Nordic tastes, with public spending in 1993 reaching 67.5% of GDP and
the economy shrinking by 5.2% between 1990 and 1993. Carl Bildt's Conservative
government introduced reforms to cut public spending which were carried
further by its Social Democrat successor. Since then, says Mr Pagrotsky, the
industry minister, "We've had fairly good development for ten years, though we
have not been fantastic."
But now he is worried about adverse
demographic factors. All the Nordic countries face an acute problem with
ageing populations, and Sweden also suffers a higher rate of sick leave and
absenteeism than other European countries. Mr Folster says these problems are
so widespread (especially in the public sector and among women) that the
proportion of people actually working is now the same as in 1995, when Sweden
was in recession. Already the Finns are joking that: "The Swedish welfare
state is like a Volvo without tyres: it is a great car, but it doesn't
work."
>>>>
Keith Hudson, 6 Upper Camden
Place, Bath, England
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