General Facts about Sweden

Sweden is located in the Northern part of Europe. The country is together with Norway a part of the Scandinavian peninsula and covers an area of 450.000 square kilometres (km²) (174,000 sq. mi.),   similar to Cameroon, Iraq, Spain or Thailand  and USA state California.

Sweden has traditionally been closely linked to the three other Nordic countries, Denmark, Norway and Finland. The four countries have a common cultural background and for Denmark and Norway the languages are similar. In Finland about 6 % of the people have Swedish as first language. Swedish is also an official language in Finland which means that documents for registering companies, trademarks and others can be written in Swedish.

Half its land surface is covered with forest. Less than 10% is farmland. Nearly 100,000 lakes dot the countryside, which is relatively flat. A long mountain chain in the north-west reaches heights of up to 2,111 m (6,926 ft). There are thousands of islands along the jagged coast. The warm Gulf Stream in the Atlantic gives Sweden a milder climate than other areas equally far north. Stockholm, the capital, is at almost the same latitude as southern Greenland but has an average temperature of about +18°C (64°F) in July. The winter temperatures average slightly below freezing and snowfall is moderate. Far northern Sweden has long and cold winters and bright summers of moderate temperatures; in June and July daylight lasts around the clock.  

The people
Sweden has a population of 8.8 million, with about 85% living in the southern half of the country. Around 90% belong to the Church of Sweden, which is Lutheran. Swedish is a Germanic language.

Like other industrialized countries, Sweden has a low birth rate. It rose during the 1980s and early 1990s but is now in decline again. Life expectancy is high—about 76 years for men and 81 for women. Since the 1940s, immigration—mostly from neighbouring Scandinavian countries but also from elsewhere in the world—has accounted for over 40% of the population growth. Sweden has two minority groups of native inhabitants in the north: the Finnish-speaking people of the north-east and the Sami (Lapp) population.  

Parliamentary democracy
Sweden is a constitutional monarchy with a parliamentary form of government. The King, Carl XVI Gustaf, today has only ceremonial functions as Head of State. Parliament consists of one chamber, whose members are directly elected by proportional representation for four- year terms. Sweden has universal suffrage and the voting age is 18. Voter turnout is traditionally very high, 85–90%.

The Social Democratic Party has held power alone or in coalitions during the periods 1932—1976 and 1982—91, while the nonsocialist parties were in government 1976—82 and 1991—94. After the 1994 elections, the Social Democratic Party formed a minority government with 162 of the 349 seats in Parliament.  

The 13 ministries are mainly concerned with preparing new government bills. Enforcement of the laws is handled by 100 or so relatively independent central administrative agencies and the 23 county administrations.

Each county also has a popularly elected council entitled to levy an income tax and is responsible chiefly for health care in its area. Today Sweden has 288 municipalities covering the entire country (including rural areas), each with a popularly elected council which collects an income tax and operates such public services as schools, child and elder care, utilities, housing, and cultural and leisure activities. Immigrants resident for three years in Sweden have the right to vote and run for office in local elections.

The Parliamentary Ombudsmen investigate suspected abuses of authority by civil servants. Other ombudsmen protect the public by keeping a watchful eye on consumer rights, ethnic and sex discrimination, press ethics, and the rights of children and young people, and persons with disabilities. Most government documents are open to inspection by the public and mass media at any time. 

Foreign policy and defense
The end of the Cold War and of the political division of Europe has changed the situation for Sweden´s foreign and security policy. It has created new opportunities to participate in the process of integration and in the emerging new security structure in Europe.

A referendum which was held in November 1994 resulted in a vote for Swedish membership in the European Union and Sweden has been a full member of the EU since January 1995. Sweden participates in the EU decision-making process and can more effectively influence and contribute to the further development of European integration. Sweden wants to strengthen the EU capability within the Common Foreign and Security Policy (CFSP) and is therefore actively taking part in the ongoing Intergovernmental Conference (IGC). To this end, Sweden — together with Finland — has presented a common proposal in the IGC on how to strengthen the EU’s capability in crisis management.

After the dramatic changes in Central and Eastern Europe, Sweden has taken part in the task of securing democracy and new security structures for the continent as a whole, for example through the Organization for Security and Co-operation in Europe (OSCE) and in the Council of Europe. It has also taken up observer status in the Western European Union (WEU). In addition to this, Sweden actively participates in the Partnership For Peace (PFP), and it has contributed forces to UNPROFOR and to IFOR/SFOR in the former Yugoslavia. Sweden is also actively involved in promoting regional co-operation, i.a. in the Council of Baltic Sea States and in the Barents’ Euro-Arctic Council. Sweden’s policy of non-participation in military alliances remains unchanged. A strong and independent national defense system is a fundamental element of Swedish security policy. The armed forces are based on general male conscription.

Sweden is an active participant in international co-operation. Strong support for the United Nations is one cornerstone of its foreign policy. Sweden is a member of the UN Security Council during the period 1997—99. Other basic elements are promotion of human rights, democracy and the rule of law, international disarmament and protection of the environment. Sweden appropriates almost 1% of its GNI for international development aid. It is also a member of many other international organizations, such as the OECD and the World Bank. There is far-reaching Cupertino between the Nordic countries in social welfare, cultural affairs and a joint labour market.  

Industry and economy
At the beginning of this century Sweden was a largely agrarian economy, and one of the poorest nations in Europe. However, a rich domestic supply of iron ore, timber and water power, clever engineers and skilled workers enabled a rapid industrialisation that transformed Sweden into a modern welfare state. Economic growth was especially fast during the post-war period until the mid 1970s, when the Swedish export industry was highly competitive. In the last twenty years, however, Swedish GNP per capita has declined to a below average position among the OECD countries.

The structural shifts in the economy during the 1970s and 1980s were accompanied by a decline in the rate of growth of labour productivity. The growth rate sank to an annual average of 1.5%, as manufacturing and primary industries with high productivity growth gave way to private and public service sectors, where productivity is more difficult to measure.

Despite its modest share of GDP (21% in 1996), manufacturing still plays a dominant role in Swedish exports. In 1996 manufactured products accounted for more than 80% of total exports. Large international companies such as Ericsson, ABB, Electrolux, Volvo and Saab account for nearly 60% of employment in manufacturing and more than 80% of exports of manufactured products.

About 460,000 small and medium sized enterprises (SMEs), mostly in services and oriented towards the home market, employ close to 1.4 million. Although these enterprises generally remain small, they account for most of the net job creation in the private sector since the mid-1980s.

Traditionally, scale-intensive industries (e.g. pulp, paper and paper products and ferrous metal products) have had a large share of Swedish exports. However, Sweden is also a relatively important exporter of technically more sophisticated products like telecommunications equipment, specialized machinery and motor vehicles. Science-based products (e.g. pharmaceuticals) account for around 10% of manufacturing value added.

The international recession in 1989—91 forced companies to review their operations to eliminate inefficiency and unnecessary costs in order to improve productivity, thereby increasing manufacturing productivity by 8% during 1991. The competitive edge of Swedish industry was further sharpened by the depreciation of the exchange rate in 1992. As a result the growth in exports exceeded market growth in 1993—95 and Sweden’s market shares increased by more than 20%.

The R&D intensity of the Swedish manufacturing sector is among the highest in the world. Transport equipment, telecommunications equipment, pharmaceuticals and machinery—all dominated by large firms—account for 85% of total R&D spending in manufacturing.

Sweden recorded a large net outflow of direct investment from the mid-1980s until 1991. From 1993, however, the balance of foreign direct investment (FDI) has been positive. In 1986—90, 80% of FDI outflows were invested in the EU, as Swedish companies positioned themselves for EU’s internal market.

During the latter half of the 1980s the Swedish economy suffered from a growing macroeconomic imbalance, which led to rapid increases in prices and costs, and a mounting government budget deficit. Since 1992, when the Swedish crown was floated and fell in value by about one fourth, the government has made great efforts to restore balance. Hence, the conditions for growth, as far as the macroeconomic situation is concerned, presently seem bright. Inflation is very low and long term interest rates have declined considerably.  

Natural resources
Sweden has rich natural supplies of coniferous forest, water power, iron ore, uranium and other minerals but lacks significant oil and coal deposits. The iron ore mines are situated in the far north. Their production is mainly exported.

Sweden’s vast forests of spruce, pine and other softwoods supply a highly developed sawmill, pulp, paper and finished wood product industry. Despite high domestic consumption, Sweden exports about 60% of its forest products.

Cheap hydro power was a major factor in Sweden’s industrial development. Today around 15% of the country’s energy supply comes from its hydroelectric plants, many of them on the main northern rivers. Over 40% of energy consumed in Sweden comes from imported oil, 7% from imported coal and coke. Sweden’s twelve nuclear reactors provide over 15% of total energy or almost 50% of electrical energy. The rest of the energy supply comes from biofuels, peat, waste heat, etc. After an advisory referendum in 1980, Parliament decided that the use of nuclear power should be phased out by 2010. However, the recent Inter-Party Agreement on energy policy (February 1997) concluded that the two reactors in Barsebäck are to be decommissioned in 1998 and 2001 respectively. Furthermore, a final year for the total phasing out of nuclear power has not been determined.  

Labour market
About 4.3 million people (50% of the population) are in the labour force. This high figure is mainly due to the fact that more than 75% of all women aged 16–64 are gainfully employed. Unemployment was given high priority in the 1980s and was for many years kept low by international standards, due to a strong business sector, the growth of the public sector, and an ambitious labour market policy. However, due to the recession that began in 1990, the jobless rate has risen considerably and open unemployment amounted to 8.8% in early 1997.

The standard working week is 40 hours by law. Roughly 25% of the labour force, mainly women, work part-time. There are five weeks’ statutory paid vacation.

About 80% of all employees are members of a trade union. The central union bodies are: the Trade Union Confederation (LO) for manual workers, the Confederation of Salaried Employees (TCO) for white- collar employees, and the Confederation of Professional Associations (SACO) mainly for graduate-level white-collar employees. The main business organization, the Swedish Employers’ Confederation (SAF), represents all kinds of private companies grouped in trade associations.

Pay bargaining is primarily handled by the SAF, LO, TCO and SACO member associations/unions. A large number of laws regulate the labour market, including acts on employment security, the status of shop stewards, the work environment and employee participation in decision-making.

After a tax reform in 1991 a majority of employees now pay only SEK 100 in national income tax, whereas local income tax is a fixed percentage of income, which varies between counties and municipalities but usually totals about 30%. Value-added tax (VAT) on most goods and services is 6–25%. Employers pay 32.92% and employees 5.95% in social security contributions to cover pensions, health insurance and other social benefits. In addition, companies pay another 6–7.4% in pensions etc. under collective agreements.    

Social welfare
Health care and social welfare are seen as public sector responsibilities, and are supported by a national social insurance system. Health care, both inpatient and outpatient, is run by 23 county councils and 3 large municipalities. Responsibility for social welfare services rests primarily with the municipalities.

All residents in Sweden are covered by the national health insurance. If a person is ill, or must stay home to care for sick children, he/she receives a taxable daily allowance, 75–85% of lost income, depending on the length of the absence. The patient is charged a fee for medical consultations and any drugs prescribed. There is a ceiling of SEK 900 per year for medical treatment and SEK 1,300 for medical drugs, after which further treatment/drugs are free of charge. The county councils together with the health insurance system then pay most of the hospitalization costs and laboratory fees. From 1998 the financial responsibility for prescribed drugs will be transferred from the national health insurance to the county councils. A large proportion of private doctors’ fees in outpatient care are also covered by this insurance. For dental care, adult patients pay the full cost up to SEK 700. Above this, the health insurance bears a rising proportion of the costs, from 25% (for treatment exceeding SEK 3,000) up to 70% (for treatment exceeding SEK 7,000). There are plans to cut most of the state subsidies to the dental insurance system from 1998.

When a child is born, the parents are legally entitled to a total of twelve months’ paid leave from work, which can be shared between them and used any time before the child’s eighth birthday. One of these months is reserved specifically for the father and is forfeited if he does not use it. The parents also receive tax-free child allowances, equal for everyone, until the child’s 16th birthday. Children who then continue their education are entitled to study allowances. At university level these consist chiefly of repayable loans. Municipalities provide children with day care and after-school activities at subsidized rates. Under certain conditions low-income families and pensioners are eligible for housing allowances.

A national occupational injury insurance system pays all health care costs for work-related accidents. Most working people in Sweden have unemployment insurance through their trade unions, while unemployed people without such coverage can receive a smaller cash benefit from the government. There are extensive government programs of employment training, sheltered employment and relocation grants to help the unemployed find new work.

A basic old-age pension, financed by both employees and employers, is payable to everyone from the age of 65. The State also pays an income-related supplementary pension financed from employer payroll fees. These two types of pension are designed to provide two thirds of a pensioner’s average real earnings during his 15 best-paid years. What shape a new supplementary pension system should have in the future is being discussed at present.

Education
Nine years of schooling are compulsory for all children from the age of 6 or 7. About 95% go on to the upper secondary school, which offers both vocational and academic programs. Schools are run by municipalities and provide free instruction, books and lunches. A separate municipal adult education system enables adults with inadequate schooling to reach the same level of education as young people.

There are some forty institutions of higher education in Sweden, operated mainly by the State and providing free instruction. About half the students are women, and a large number are people over 25 taking advantage of special admission rules for those with work experience. Almost one fourth of adult Swedes have a higher education.

Private, government-subsidized adult education associations arrange study circles for more than 2.5 million course participants a year.

Change rate (January 1998)