Scandinavia, A Success Story ?

Scandinavia : A success story ?

41% of the French consider today that France should copy the Scandinavian model, economically and politically. Scandinavia includes the three kingdoms of Norway, Sweden and Denmark, plus Iceland and Finland. Those countries have a common ethno-cultural heritage and related languages. The Scandinavian model can be defined as a system where the welfare state is very present, with a strong social protection, an important political consensus and a high tax system. Nevertheless, there is a strong influence of the liberal system that exists in Anglo-Saxon countries notably. Thus, the Scandinavian model is a match between the social system that the French chose to adopt, and the Anglo-Saxon liberal system. It allows Scandinavian countries to enjoy both the advantages of social policies, which can be seen through the quality of life that enjoys the Scandinavian population and the strong sense of equality that radiates from the Nordic culture. Yet, Scandinavian countries succeeded in conciliating this generous welfare state with a more liberal, dynamic, flexible, and thus efficient economic policy.

Consequently, the Nordic system has been seen as a very successful model throughout the world, which should be imitated. But can this « success story » cope with the global crisis ? Admittedly, the system is ideal for small, cohesive countries, with no immigration nor world concurrence. But is this model still effective in a globalised, crossbreeded and open world ? First, I will enlighten to what extent the Scandinavian economic and political system is a success, but I will point out in a second part that nowadays, the system is not in a good shape, due to the economic and demographic mutations that every industrial countries now have to face.

I- Between interventionisme and liberalism : a competitive and efficient system.

A) A competitive economy

1/ Growth thanks to natural resources and investment in research

Scandinavian countries haves capitalist and liberal economies, but at the same time, there is a strong influence of the State.

The Nordic countries economy are pre-eminently healthy thanks to their natural ressources. Thus, 50% of the Swedish territory is covered by forests, exploited by a solid and paying forest industry. In Norway, you can find off-shore gaz, but also iron. Eventually, those countries can count on fish wich is abundant on the Baltic sea, notably salmon and herring.

Their industry is very open. Big corporations such as Ericsson, Volvo, Lego or H&M prove it. For instance, Finnish Nokia makes 4% of the GNP and 20% of the exportations in the country. Of course, those firms are more and more outsourcing in less developed countries where the labor cost is cheaper, but they keep their service sector on the national territory, thanks to the government. Indeed, most of them highly encourage research. Products from firmes like Ikea or Bang&Olufsen show that both design and quality are considered as very important in Scandinavian countries. Sweden and Finland are the European countries which invest the most in research, with respectively 4,3% and 3,5% of their GDP. Moreover, among the 15 international firms which invest the most in research, the only European ones are Scandinavian.

2/ A high employment rate

Norway, Denmark and Sweden have employment rates much more superior to other industrial countries. This specificity is mostly due to the labour market organisation, both social and very liberal.

First, trade unions have an important influence : almost 80% of Scandinavian workers are unionized. Trade unions and employers, as in Denmark since 1899, recognized their legitimacy, privileging cooperation and negociations. There is no work code in Scandinavian countries, and law does not interfere much. Minimal salaries or minimal legal term on contracts do not exist. Indeed, for 90% of the salaries, most things are decided by collective labour agreement. Plus, people don't go on strike very often.

Reglementation is very flexible, and it also concerns redundancy. The Danish « flexicurity » allows the employer to fire a salary according to its needs, without any advance note (except for certain cases). In exchange, the employee is generously protected, his unemployment insurance covering 90% of the old salary during four years. Nevertheless, the unemployed has to accept work experience in the private or the public sector. They can also study and get a national degree to get new professional skills. Those measures are based on collaboration and exchange, just like the labour market organisation.

Eventually, it is important to add that the parity between men and women are well respected in Scandinavian countries, given that 80% of women in age to work actually work, most of them in full-time jobs. They earned in 2000 80% of men salaries in Finland. We can also point out the fact that in Norway, breastfeeding breaks are part of workers rights.

B) Which allows a generous redistribution

Such healthy economies allow governments to be generous to the population, by allowing them a strong social protection. Scandinavian countries dedicate between 26,4% and 32,5% of their GNP to social care. In compensation, taxes are rather high. Indeed, the common point between each Scandinavian countries is Welfare State. It allows to enjoy social equality and poverty prevention, by a fair redistribution

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