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Sweden

Econ 4310

Professor Vivian Kirby

Andrew Rapson

Rachel Roy

John Michael Croft

Tyler Phillips

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Section 1: About the Country & its Government

Initial inhabitants of Scandinavia (Norway, Sweden, and Denmark) appeared after the Ice Age, and were known as hunters, fishers, and gatherers. They built settlements and excelled in agriculture. Although there are no formal records from this era, there were supposed kings and “heroes” like Beowulf who established power within the settlements. These tales, also referred to as Norse mythology, were handed down from generations by word-of-mouth or illustrated pictures. They spoke a German dialect called Proto-Norse.

Due to the seasonal weather changes they often migrated from areas of farm land to land near waters. The Vikings are the most notable part of Scandinavian history. Seasonal weather changes forced them to explore more areas around them, especially the waters, which opened up opportunities for trades. This caused influence from Russia, British, French, German, Middle East, and the Byzantium Empire (Greek). Erick the Victorious was the first known King of Sweden. After the fall of the Vikings from the 8th – 11th century due to continental Europe economic rise, the Vikings or Swedes became prosperous farmers. This economic stability allowed outside trade, monarchs, and religious influence of paganism to Christianity.

St. Ansgar introduced Christianity in 829 AD which was a culture shock to original religion of paganism. The Swedish Empire expanded into Finland creating conflict with the Rus beginning to formally establish the nation’s line between Finland and Sweden. In the 14th century, Europe was hit by the bubonic plague. Around the 13th – 15th century, Sweden was ruled by King Magnus Eriksson who united Sweden, Denmark and Norway by the Kalmar Union. After time, the ruler of this union rotated among various countries within the region. Another example of a ruler of the Kalmar Union was King Christian II of Denmark.

Gustavus Adolphus led Sweden to be a powerful country after wars with Norway, Denmark, Holy Roman Empire, Russia and Poland in the Thirty Year’s War. He reformed the nation’s religion to Protestantism and gained lands from Poland-Lithuania and Russia. The main conflict was Protestantism with the Holy Roman Empire (Catholicism). In the 17th century, Russia, Poland, and Norway united against Sweden to get back their lands and were successful. Sweden fought in the Napoleon Wars, and gained Norway, and Denmark. Sweden was neutral in both World Wars but helped refugees such as Danish Jews. They also made various other humanitarian efforts including the support of the Norwegian resistance. In the Cold War, Sweden was politically neutral but had strong ties with the United States.

Sweden’s current form of Government is a Constitutional monarchy with a parliamentary system. Sweden economic system is comprised of high-tech capitalism and extensive welfare benefits. It has a modern distribution system, excellent internal and external communications, and a skilled labor force. The current government came to power in 14th century with the declaration of Sweden’s King. The government evolved into a Legislative Branch, Executive Branch, and Judicial Branch, and currently operates as Social Democracy. The government has been stable since their declaration of independence.

In 2009, Sweden declared the year, “nature year”, inspired by the United States to go green. Prescription free drugs will soon be sold in regular supermarkets– but not without a strict set of rules. Saab, based in Sweden, is restructuring to avoid bankruptcy after being abandoned by General Motors.

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Swedish Parliament is aiming to resolve major environmental problems like reducing climate impact, clean air, protect ozone layer, safe radiation, good-quality groundwater, balanced marine environment and sustainable forests. Sustainable development can only be achieved within the context of global and regional co-operations. Sustainable development policies, measures and concerns must be mainstreamed, i.e. integrated into all existing policy areas. Further action at national level will be needed to ensure long-term protection of the critical resources that constitute the basis for sustainable development. These include natural resources, people’s health, skills and expertise, infrastructure and the built environment. Sweden participates in a combination of both Import-substitution and export led commerce. Due to the growing demand in pharmaceuticals, high-tech jobs, and engineering, the private sector is evolving into a more export related growth model. This growth model is due to an increased domestic demand. The fundamentals underlying this growth model is the solid financial sector which is being rescued by the government. The Plan is being implemented across all fields of women, child, elderly, and sexuality rights. Since this government is socialistic in nature, they choose not to be in favor of any groups because of democracy and because they are socially democratic.

http://www.sweden.gov.se – (prime minister, minister of finance, education, higher education/research, environment, culture, justice, health/social affairs, foreign affairs, local government markets, energy/communications, social security, agriculture, defense, gender equality, employment)

Sweden’s legal institutions, financial and banking institutions and political institutions are all very well developed. In Sweden, they do not have any underdevelopment, but rather too many laws. Since this country is all about socialism, they have many regulations around the workplace such as better vacations, less work (i.e. you can’t work more than 6 days a week) and restrictions on weekly hours and overnight hours. Employers must also notify the public if they are firing 25 workers as well as other workplace restrictions that complicate things. Although it only takes 8 procedures to employ someone in Sweden, it takes 116 days to go through the bureaucracy to employ these workers. Not to mention, the cost of employing these workers is extremely high.

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All of the following data from Index Mundi1

Land Mass:

total: 449,964 sq km land: 410,934 sq km water: 39,030 sq km

Length of coastline: 3,218 km

arable land: 5.93%

permanent crops: 0.01% other: 94.06% (2005)

Water 8.7%

Lands under cultivation:7%

Wild pasture lands: 1%

Forests: 67%

Natural Resources: iron ore, copper, lead, zinc, gold, silver, tungsten, uranium, arsenic, feldspar, timber, hydropower

Average rainfall: 535 mm (about 21 in).

Temperature: temperate in south with cold, cloudy winters and cool, partly cloudy summers; subarctic in north

Major National Holidays:

January 1 New Year Public Holiday in Sweden

May 1 May Day Public Holiday in Sweden

August 15 Assumption Public Holiday in Sweden

November 1 All Saints’ Day Public Holiday in Sweden

December 25 Christmas Public Holiday in Sweden

National Day, 6 June (1983)

1 Index Mundi. 2009. “Sweden”.

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Section 2    Culture and Population Demographics

  Sweden’s ethnicities include Armenians, Assyrians, Danes, Chilean, Finns, Greeks, Norwegians, Iraqis, Kurds, Moroccans, Serbs, Tornedalians, Turks, Yugoslavs to name a few. Sweden’s religious groups include Lutheran, Protestant, Eastern Orthodox Christians, Judaism, Roman Catholicism, Evangelistic (non-denomina-tional), Muslim, and Church of Sweden (Lutheran Majority 80%). The major languages of Sweden are Swedish (official language), Scanian, Jamtlandic and Dalecarlian. Some minority languages include Finnish, Meänkieli, Saami, Romani and Yiddish. Although the major religion is Lutheran, the Church of Sweden who has almost 7 million people largest globally only 2% actually attend church services. The indigenous population of Sweden is comprised of Swedes with Finnish and Sami minorities. Immigrants of first-born/ first-generation are Finnish, Danish, Norwegian, Greek, and Turkish ethnicity.1 Sweden’s population percentages are as follows (2005):

Rural- 16.6%   

Urban- 83.4%

Like many modern societies, Women have equal rights in Sweden. Sweden, surprisingly, has been top 3 for women equality for the last couple years. In the labor market, Sweden women comprise of 47%. Households have a mean of 2.4 kids per family. They are obviously equal in aspect and the size is standardized pretty much across the board. They are a lot like Americans in respect to standard of living/quality of living.

Sweden’s life expectancy is as follows:

Total population: 80.74 years

Male: 78.49 years

Female: 83.13 years (2008 est.)

Sweden’s Population

2003 8878085

2004 8986400

2005 9001774

2006 9016596

2007 9031088

2008 9045389

Section 3 Social Development Indicators

1 Index Mundi. 2009. “Sweden”.

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The HDI for Sweden is 0.958, ranking them 7th out of 179 countries (table 1).  

Sweden HDI/Life Expectancy – table 1

HDI value2006

Life expectancy at birth(years)2006

1. Iceland (0.968) 1. Japan (82.4)

5. Ireland (0.960) 5. Australia (81.0)

6. Netherlands (0.958) 6. Spain (80.7)

7. Sweden (0.958) 7. Sweden (80.7)

8. Japan (0.956) 8. Israel (80.5)

9. Luxembourg (0.956) 9. Canada (80.4)

179. Sierra Leone (0.329) 179. Swaziland (40.2)

To measure the impact of gender inequalities on human development achievement, Sweden's GDI value, 0.958 can be compared to its HDI value of 0.958. Its GDI value is 100.0% of its HDI value. Out of the 157 countries with both HDI and GDI values, Sweden has the best ratio.  

Table 2: The GDI compared to the HDI – a measure of gender disparity

GDI as % of HDI Life expectancy at birth(years)2006

Combined primary, secondary and tertiary gross enrolment ratio2006

Female as % male Female as % male

1. Sweden (99.9%) 1. Russia Fed. (123.1%) 1. United Arab Emirates (120.2%)

2. Romania (99.9%) 104. Greece (105.7%) 17. Russian Federation (110.4%)

3. Lithuania (99.9%) 105. Vanuatu (105.6%) 18. Jamaica (110.3%)

4. Vanuatu (99.9%) 106. Sweden (105.6%) 19. Sweden (110.2%)

5. Bahamas (99.9%) 107. Chad (105.6%) 20. United States (110.0%)

6. Kenya (99.9%) 108. United Arab Emirates (105.5%)

21. Honduras (109.9%)

157. Occupied Palestinian Territories (92.8%)

157. Niger (96.9%) 157. Chad (60.4%)

Year Average Annual Income

1995 20990

1996 21718

1997 22468

1998 23404

1999 25079

2000 26948

2001 27322

2002 28277

2003 29965

2004 31007

2005 32025

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Distribution of family income - Gini index: 23 (2005)

Infant mortality rate:

total: 2.75 deaths/1,000 live birthsmale: 2.91 deaths/1,000 live birthsfemale: 2.58 deaths/1,000 live births (2008 est.)

Life expectancy at birth:

total population: 80.74 yearsmale: 78.49 yearsfemale: 83.13 years (2008 est.)

Literacy:

definition: age 15 and over can read and writetotal population: 99%male: 99%female: 99% (2003 est.)

 

In summary, Sweden’s Social Development has a constant increase in average income per household and human development index. They rank 1st in the gender development index. However, these social developments cause a lower Gini coefficient. The longevity, adult literacy rate, level of education for women vs. men also increases. They don’t have sanitation problems and there are few diseases such as HIV/AIDS that is running wild. The only minor setback for this country is that over 16 percent of the entire country smokes.

 

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Section 4 Economic Development

Real GDP over past 10 years

Year GDP

2008 358,400,000,000,000

2007 402,441,492,200,000

2006 $384,927,300,000.00

2005 $357,682,600,000.00

2004 $350,144,400,000.00

2003 $304,145,700,000.00

2002 $243,563,900,000.00

2001 $221,544,100,000.00

2000 $242,004,100,000.00

1999 $253,723,200,000.00

1998 $249,970,700,000.00

Sweden 2008

GDP (PPP) $358.4 Billion

GDP (per capita) $39,600

Per capita GDP Year

$24,524.63 per capita 1994

$28,381.81 per capita 1995

$30,849.80 per capita 1996

$28,190.17 per capita 1997

$28,239.53 per capita 1998

$28,645.34 per capita 1999

$27,286.51 per capita 2000

$34,627.03 per capita 2001

$27,293.13 per capita 2002

$33,959.99 per capita 2003

$38,939.57 per capita 2004

$39,636.64 per capita 2005

$42,553.49 per capita 2006

$37,526.00 per capita 2007

$39,600.00 per capita 2008

External Debt % of GDP $ in BillionsExternal Debt 176.72 $598.2

Inflation rate: 1.6% in 2008Gross Capital Formation: 624,678,776,000

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Year Population Growth Rate Rank

2008 0.157 #186

2007 0.159 #187

2006 0.16 #189

2005 0.17 #190

2004 0.18 #190

2003 0.01 #206

2002 0.34 #159

2001 0.28 #160

2000 0.13 #169

1999 0.06 #171

1998 0.03 #170

Major Imports Major Exports Major Trading Partners

Major sources of capital

Machinery Machinery Germany BiotechnologyPetroleum Motor Vehicles Norway TelecommunicationsPetroleum products Paper products United States Medical TechnologyChemicals Pulp & Wood Denmark BankingMotor vehicles Iron United Kingdom PharmaceuticalsIron Steel FinlandSteel Chemicals NetherlandsClothing FranceFood products China

Belgium

Total Trade Volume: $351,700,000,000

Net Exports: $18,500,000,000

Section 5   Growth Competitive Index and Index of Freedom

Most recent GCI rankings for Sweden

Employment: 98.3% in 2008type

Industrial: 24%Agriculture: 2%Service: 74%

Rural Unemployment: 62%Urban Unemployment: 38%

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4th in 2008-2009

4th in 2007-2008

9th in 2006-2007

National rank in terms of:

Quality (rankings):

Institutions - 4th, Policies - 3rd

Sub index on Macro economy stability - 15th

Sub index on: 

Business efficiencies: 7th

Goods market - 7th

Labor market - 26th

Financial market - 8th                     

Ability to innovate – 5th

Absorb advanced technology

Index of Freedom

In terms of economic freedom Sweden ranks 26th in the world with a score of 70.5. 1 From last year's score Sweden has declined in trade, monetary and labor freedoms but it still ranked above the world average. Sweden has some of the lowest scores worldwide in fiscal freedom and government size. The wealth tax has been abolished, but taxes are still a huge burden. The top income tax rate of 57 percent is one of the highest in the world. Total government spending is still more than half of GDP. The labor market's inflexible regulations have caused the labor freedom score to dip below the world average.

Informal Sector

Sweden is a highly developed economy and is not affected on a development level by informality. Informality is said to exist in education training and all types of employees are said to be looking for tax breaks by finding jobs in the informal sector “Even in highly developed Sweden, informal employment is growing, because Sweden has the second-highest labor taxes in the world.”2

Donor Projects

Sweden contributes greatly to struggling countries, and their primary objective is “to create conditions to allow poor countries to improve their standard of living.” They focus on three main areas: Democracy and

1 Index of Economic Freedom. 2009. The Heritage Foundation.

2 ? Farrell, Diana. Tackling the Informal Economy. 2006. McKinsey & Company. 8 May 2006

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human rights, environment and climate, and gender equality. Sweden will hold the European Union (EU) presidency near the end of 2009, and will oversee negotiations on the new climate agreement.

Sweden holds .94% of World Bank votes, and is represented by their Minister for Finance on the Board of Governors, with the alternate being their Minister for International Development Cooperation. The table below shows dates Sweden joined each organization.1 

 The 5 organizations of the World Bank Group  Founded  Sweden became member in 

The International Bank for Reconstruction and De-velopment (IBRD)

 1945  August 31, 1951

The International Development Association (IDA)  1960  September 24, 1960 

The International Finance Corporation (IFC)  1956  July 20, 1956

The Multilateral Investment Guarantee Agency (MIGA)

 1988  April 12, 1988

The International Centre for the Settlement of In-vestment  Disputes (ICSID)

 1966  January 28, 1967

In 2008, Sweden decided to contribute SEK 6.1 Billion to the International Development Association (IDA) between 2008 and 2017. They are the 10th largest contributor to the IDA.  In 2009, Sweden granted debt relief to Liberia, writing off approximately 20.4 Million USD in interest and repayment obligations, and plans to contribute SEK 40 Billion to stimulate the global economy.

Sweden works in cooperation with the USAID to provide relief to struggling countries. They top the HRI index with a score of 7.9 out of 10 The GHD co-chairs of Sweden and USAID wrote a joint letter to DARA expressing concerns about humanitarianism.

Sweden’s contributions to the World Bank and African Development Fund (ADF) from 2008 to 2010 will total SEK 8 Billion. Over the next 2 years, Sweden will contribute SEK 2 Billion to the Global Fund to Fight Aids, Tuberculosis, and Malaria.

Sweden is involved in several ongoing projects world wide. They signed a five year extension with China in 2007 to extend the “memorandum of understanding on environmental cooperation”. They established a Centre for Environmental Technology, in 2007, in Beijing. The Swedish Energy Agency (SEA) is partially financing two Clean Development Projects in China. In 2007, Sweden played a role in a three year project advancing progress of development in China.

The tables / charts below summarize Sweden’s position and projected payments with regards to the International Monetary Fund (IMF).2

1 The World Bank. “Sweden and the World Bank”. 2009

2 . International Monetary Fund. “Sweden and the IMF”. December 15, 2008.

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Year Payments (in SDR)

2009 342,3712010 294,7512011 294,751

2012 294,877

2013 294,6242014 294,7512015 294,7512016 294,8772017 294,6242018 294,7512019 294,7512020 294,8772021 294,6242022 294,7512023 294,7512024 69,816

Total 4538698

In 2007, Sweden contributed 30 Million USD to the African Development Fund (ADF).  Described in the table below, Sweden is the 10th largest donors to the ADF (see Fig 7.2 above).

ADF State Participants

ArgentinaAustriaBelgiumBrazilCanadaChinaDenmarkFinlandFrance

GermanyIndiaItalyJapanKoreaKuwaitThe NetherlandsNorwayPortugal

Saudi ArabiaSouth AfricaSpainSwedenSwitzerlandU.A.EUnited KingdomUnited States of America

Sweden is the 30th largest share holder of the Asian Development Bank (ADB). Since 1966, they have contributed approximately 540.78 Million USD to the ADB. The table below summarized Sweden’s involvement with the ADB.

10 largest pledges to ADF-11 Fig 7.2

United KingdomFranceGermanyUnited States of AmericaJapanThe NetherlandsItalyCanadaNorwaySweden

14.810.910.88.37.15.45.35.04.54.4

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Number of shares held: 12,040 (0.34% of total shares)

Votes: 25, 272 (0.57% of total membership, 1.63% of total non-regional membership)

Overall capital subscription: $190.05 million*

Paid-in capital subscription: $13.31 million*

As of 2003, Sweden’s contributions totaled 1.3 Million USD to the Poverty and Environment Fund, which has financed two projects totaling 6.27 Million USD. In 2005, they contributed 14.17 Million USD to the Cooperation Fund to Fight HIV / AIDS in Asia and the Pacific. In 2007, they contributed 15 Million USD to the Asian Pacific Carbon Fund. In 2005, Sweden contributed 14.3 Million USD to assist in the fight against HIV and AIDS.

Section 8  Foreign Investment Inflows and Major Sources of Foreign Investments

The Swedish Government heavily promotes active investment to attract foreign direct investment. The Invest in Sweden Agency (ISA) is in charge of this task. Foreign direct investment helps to increase employment and economic growth. The ISA is represented in approximately ten countries.

Section 9   The Business Environment - The Relative Ease of Doing Business in this Country

Starting a business in Sweden is relatively easy. Limited companies can be purchased and ready for trading with in few days. Limitations differ depending on whether the company is publicly or privately traded. Obtaining a business license requires eight procedures over 116 days with a cost of 115.3% of income per capita. Employing workers involves paying a competitive wage in comparison to the rest of Europe. However the Social Security contribution is towards the higher end at 33% plus an additional 8% for pension costs. Registering property requires two procedures in one day with a cost of 3% of property value.  Employees are eligible for five weeks paid vacation throughout the year and three weeks of sick leave in which employers must pay employees 80% of typical wages throughout this time. Trade unions are very strong in Sweden. Obtaining credit is fairly easy with a legal rights index o six and a credit information index of four.  Corporate taxes are typically 28%, but may be as low as 21%. Typical tax withholdings rate is 30% but inside the European Union, there are no withholding taxes.   Trading across borders is fairly easy as Sweden welcomes trade with most countries across the world.  

Sweden is very open to business be conducted in their country, whether domestic or international.  It has very few limitations for international countries doing business within their borders. It is the 5th largest country in Europe with a population of approximately 9 Million. Citizens enjoy a fairly decent standard of living with GDP per capita reaching approximately $28,000 USD in 2004.

Trade with South Africa:South African exports to Sweden totaled R2.9bn in both 2006 and 2007 and reached R785.3 million in

the year-to-March 2008. SA’s main exports to Sweden consist of industrial products, food (especially fruit, vegetables and wine) and various semi-manufactured products. Imports from Sweden totaled R5.9bn in 2006,

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R8.1bn in 2007 and R3.2bn in the year-to-March 2008 and they consist mainly of industrial products, vehicles and various semi-manufactured products. The number of Swedish companies based in South Africa has grown steadily since 1993 and was estimated at 80 in 2007, “among them major multinational export companies such as ABB, Atlas Copco, Electrolux, Ericsson, Volvo, Scania, Svedala, Tetra Pak and Sandvik.”1

Sweden is very open to foreign owned firms and foreign direct investment. Swedes employed by foreign owned companies totaled 22% in 2001.  The number of foreign owned companies surpassed 7,800 by the end of 2001, employing over 500,000 workers. Sweden tries to be fair for all companies within their borders as well as abroad. However regulations may vary slightly between foreign and domestic firms. Foreign firms appear to be permitted to own 100% of the equity in their firms if they choose.

Domestic content requirements appear to be minimal, allowing companies to shop around for the lowest prices, operating within the natural supply and demand of products. The Swedish government offers incentives for foreign companies to invest in Sweden. These incentives vary depending on the industry each company is a part of. They have a very efficiently and effectively operating economy and tweak laws on an as needed basis.

Section 10   Corruption

According to the CPI on the Transparency International website the country of “Sweden ranks in the top 2% of highly clean countries in regards to corruption”2 with less than 2% of respondents reporting they ever paid a bribe to obtain any type of service. 

Sweden has had a high CPI (Corruption Perception Index) in the top 10 for a couple of years. Example: In the “Boat Certificate-case” investigation started in 2002 by the Oslo police district. Charges were brought against several Norwegian citizens for active bribery of a Swedish official (Swedish maritime inspector). The suspects, including the renowned businessman Kjell Inge Røkke, who was sentenced to 120 days in jail, were convicted of corruption on 1 July 2005. The sentenced is under appeal.3

1 International Trade: Kingdom of Sweden. Best SA Exporters. 2008

2 Report on the Transparency International Global Corruption Barometer 2007. Dec. 6, 2007.

3 Report by Jan Borgen on “Foreign Bribery Prosecutions”, 6 December 2005

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    The strongest areas to be experience corruption in Sweden are the media, political parties, the business or private sector, and the religious bodies - this can be seen in the chart below1:

           

An example of corruption occurring in Sweden is at a college on the island of Gotland where a professor received a large donation from a company called Nord Stream believed to be in relation with the company’s efforts to push installment of a gas line installed in the Baltic Sea.2 According to Transparency International some corruption measures include: public officers doing things for private gain such as, taking money to overlook laws being broken or wrongful conduct, kickbacks in public procurement, dishonest use of public funds, wrongful use of power to control the acts of others. The Herald Tribune, a global edition of the New

1 Report on the Transparency International Global Corruption Barometer 2007 (pg 22)

2 The Local. February. 9,2009. “Nord Stream gift prompts bribery probe”.

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York Times, discusses another major measurement with corruption in Sweden do to its large exporting industry and the difference in the standards it holds for its self than those abroad.1

Section 11 International Finance

The currency of Sweden is the Swedish Krona (SEK). The exchange rate value for the Swedish krona (SEK) per US dollar - 6.7629 (2007), 7.3731 (2006), 7.4731 (2005), 7.3489 (2004), 8.0863 (2003).2

Exchange Rate System adopted by Sweden since November 1992 is:

- A managed floating system – when the Government or central bank or Sweden intervenes with a floating exchange rate and allows the currency price to float freely between an upper and lower bound, price “ceiling” and “floor”.3

The Swedish government is very open to foreign investment inflows. They are very liberal with their foreign investment laws and are open to almost all foreign investments, excluding only their air, and maritime transportation, and arms manufacturing. They also have very low corporate income tax rates making it very attractive to other countries - encouraging foreign investment.4

Because of Sweden’s openness to world trading and their lack of laws in this area, the government does not control “payments and transfers or repatriation of profits”.5

Sweden’s’ external debt as a fraction of GDP in 20086

1 Herald Tribune. May 11, 2007. “Sweden's squeaky-clean image sullied by scandals”

2 Index Mundi. 2009. “Sweden Exchange Rates”.

3 Currency UK. No date. “The Swedish Krona in The Market - Broker View”.

4 Nations Encyclopedia. 2009. “Sweden – Foreign Investment”.

5 Index of Economic Freedom. 2009. The Heritage Foundation

6 Central Intelligence Agency. March 19, 2009. “The World Fact Book”.

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Sweden’s:

- External debt is $598.2 billion

- Total exports $170.1 billion

- External debt as a fraction of total exports = 170.1/ 598.2 = .28 or 28%1

Sweden's debt comes from and is owed to a combination of:

Private Banks, public bond issues, the World Bank, trade credits, IMF, and HIPC eligible. Despite the many debtors listed these are only a handful of who Sweden actual owes which is to be expected for any country that is $598.2 billion in debt.2

Sweden plans to sell billions in state assets during the next three years expand growth and raise revenue to pay down their debt. In addition to this they are also planning to finance the debt long-term at a fixed interest rate to lower a risk associated with this debt, and looking at the possibility of assuming a new long-term nominal government bond.3

 Section 12 Concluding Comments

           Based on the information we have gathered and the research done on the Country of Sweden, though it is not a perfect country, we are optimistic in both the short – and medium-term future of the country. One strong indicator of the “healthiness” of an economy/country is the amount of corruption within that environment. As we have discussed in this paper Sweden has a very small amount of corruption in the society and they continue to push for honesty and cleanliness in the actions of public officers. Sweden is also well developed with strong foundations in their legal, financial, banking, and political institutions and has very few institutions that are underdeveloped or lacking in strength.  In addition to these things they are also a strong country in women’s equal rights, they have excellent internal and external communications, they have a very high employment rate, and the average life expectancy is high with most living till the age of 80.  With the strong way the Swedish economy is now operating it supports our optimism of the short-term future of the country, and with its strive to only improve and become even stronger it lends to our belief that their medium-term future will also be strong.

             If I were the political leader to the country of Sweden this first reform I would purpose to remove obstacles to growth and development would be to allow more access to own property, open businesses or

1 Index Mundi. 2009. “Sweden Exchange Rates”.

2 Riskbank. March 31, 2009 "Economic And Financial Data For Sweden"

3 U.S. Department of State. August 2008. “Bureau of European and Eurasian Affairs” – “Economy”

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register land; I would strive to shrink the number of hoops needed to jump through and the time it would take to obtain documentation for any one of these things. I would also push for the importance of education starting at a young age; this would include school education, health education, and social education. Another reform I would propose would be to have complete equal rights among those in the lower class brackets with those of the upper, with more ease to move from one to the other.

From the perspective of a decision-maker in a US-owned firm, though Sweden would have its risk - as does any country when it comes to investing across borders, it is definitely a country that holds attractiveness as an investment location. Following the FDI environmental analysis framework there are many reasons Sweden is an attractive location for investing:

It is a country with low political risk in part due to a stable government through the establishment of their declaration of independence as mentioned above.

Sweden has strong political institutions with little corruption and constant improvement in citizens’ right, as well as very strong financial markets and high infrastructure and reliability of utilities especially the water supply.

They have strong economic resources in labor capital and land – specializing in production of iron, paper products, processed foods and more.

They are major exporters of, but not excluding, machinery and motor vehicles, and importers of items like petroleum and petroleum products, as well as many chemicals.

Sweden has strong connections with their trading partners including China, Germany, and France, in which they not only trade with but also lend large amounts of money to each year.

They have a strong demographic structures with high population growth, average life expectancy around age 80, average household income around $35,000, good literacy with most over the age of 15 able to read and write, and low disease and health issues.

 

            Though this is not all the FDI looks for, these are the major issues of the FDI environmental analysis framework that determines whether a country is risky or attractive in terms of an investment location. Because Sweden excels and is so stable in so many of these areas, from the perspective of a decision maker in a US-owned firm it holds strong attractiveness as an investment location. 

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REFRENCES

1. The World Fact Book: Sweden. 2009. CIA. 19 March 2009. <https://www.cia.gov/library/publications/the-world-factbook/print/sw.html> 2. Sweden: Historical Data. 2009. NationMaster.com 2003-2009. <http://www.nationmaster.com/time.php?stat=eco_gdp-economy-gdp&country=sw-sweden>

3. Regional Unemplyment. 2008. OECD Factbook OECD. 2008. <http://fiordiliji.sourceoecd.org/pdf/factbook2008/302008011e-06-02-03.pdf>

4. Heshmati, Almas. Commercialization and Transfer of Technology. 2007. Nova Science Publishers Inc. <http://books.google.com/books?id=NN6qq6IeeoIC&pg=PA158&lpg=PA158&dq=foreign+owned+firms+in+Sweden&source=bl&ots=z_1d3yJW7m&sig=Wmmp-aeRloG_fsnoYBsBS-esGtk&hl=en&ei=yX6pSc3jA9W5twfkwZ3wDw&sa=X&oi=book_result&resnum=5&ct=result>

5. Index of Economic Freedom. 2009. The Heritage Foundation 2009. <http://www.heritage.org/Index/Country/Sweden>

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7. Report on the Transparency International Global Corruption Barometer 2007. Dec. 6, 2007. Transparency International – Full Report. “Table 4.2: Corruption’s impact on different sectors and institutions” <http://www.transparency.org/policy_research/surveys_indices/gcb/2007>. February 28, 2009.

8. The Local. February. 9,2009. “Nord Stream gift prompts bribery probe”. <http://www.thelocal.se/17680/20090219/>. February 28, 2009.

9. Transparency International. 2008. “Faq” February 28, 2009 . <http://www.transparency.org/policy_research/surveys_indices/cpi/2008/faq>

10. Herald Tribune. May 11, 2007. “Sweden's squeaky-clean image sullied by scandals”. <http://www.iht.com/articles/2007/05/11/business/corrupt.php> February 28, 2009. 

11. Office of the Executive Director (EDS20): Sweden. 2009 The World Bank Group. <http://www.worldbank.org/eds20>

12. Brännlund, Runar. Foreign ownership and effects on employment and wages: The case of Sweden. 2004. Society for Economic Dynamics. 2009. <http://ideas.repec.org/p/hhs/umnees/0638.html>

13. Sweden, Europe. 2008, Private Islands Inc. <http://www.privateislandsonline.com/sweden_info.htm>

14. Poldahl, Andreas. Domestic vs. International Spillovers: Evidence from Swedish Firm Level Data. 2004. Society for Economic Dynamics. 2009. <http://ideas.repec.org/p/hhs/fiefwp/0200.html>

15. Karpaty, Patrik. Foreign Direct Investment and Productivity spillovers in Swedish Manufacturing. Society for Economic Dynamics. <http://ideas.repec.org/p/hhs/oruesi/2004_002.html>

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16. Foreign Firms in the Member States’ Service Economy. International Labour Office, Geneva. 2009. <http://actrav.itcilo.org/actrav-english/telearn/global/ilo/seura/euforeig.htm>

17. Foreign firm ownership at new high in Sweden. ISA: Invest in Sweden Agency. 2 July 2002. <http://www.isa.se/templates/News____2680.aspx>

18. International Trade: Kingdom of Sweden. Best SA Exporters. 2008. <http://www.bestsaexporters.com/index.php/articles/124-doing-business-in-kingdom-of-sweden>

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19. Doing Business in Sweden. Grant ThorntonSweden AB. 2008. <http://www.grantthornton.se/In-English/Doing-business-in-Sweden/>

20. Index Mundi. 2009. “Sweden Exchange Rates”. <http://www.indexmundi.com/sweden/exchange_rates.html>. March 21, 2009.

21. Index Mundi. 2009. “Sweden”. <http://indexmundi.com/sweden/>. March 21, 2009.

22. Currency UK. No date. “The Swedish Krona in The Market - Broker View”. <http://www.currencyuk.co.uk/currency/sweden-swedish-krona.php>. March 21, 2009.

23. Nations Encyclopedia. 2009. “Sweden – Foreign Investment”. <http://www.nationsencyclopedia.com/Europe/Sweden-FOREIGN-INVESTMENT.html>. March 21, 2009.

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25. Central Intelligence Agency. March 19, 2009. “The World Fact Book”. <https://www.cia.gov/library/publications/the-world-factbook/fields/2186.html>. March 21, 2009.

26. Index Mundi 2. 2009. “Sweden Economy Profile 2008”. <http://indexmundi.com/sweden/economy_profile.html>. March 22, 2009.

27. U.S. Department of State. August 2008. “BUREAU OF EUROPEAN AND EURASIAN AFFAIRS” – “Economy”. <http://www.state.gov/r/pa/ei/bgn/2880.htm>. March 23, 2009.

28. Riskbank. March 31, 2009 "Economic And Financial Data For Sweden". <http://www.riksbank.com//swedishstat/link8_en.html#Foot>. March 31,2009. 

29. International Monetary Fund. “Sweden and the IMF”. <http://www.imf.org/external/country/SWE/index.htm>. December 15, 2008.

30. The World Bank. “Sweden and the World Bank”. http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/WBEUROPEEXTN/SWEDENEXTN/0,,contentMDK:21008879~menuPK:2801181~pagePK:141137~piPK:141127~theSitePK:403495,00.html. 2009.