Wednesday, May 10, 2006

The Dramatic Swedish Shift

A somewhat bigger picture to show something that illustrated what's been happening with Sweden during particularly the past decade.

The graphs show exports and imports as a share of our total economy. You can say that they together measure the degree to which our economy is integrated with the rest of the world.

You can see that this increased fairly steadily through the 1960's, the 1970's and the 1980's.

But then you see the big shift that occured in the first years of the 1990's. It was a time of profound structural reforms in Sweden - as well as us entering fully the European Union.

And then everything takes off. You can see that the curves bend upward in a fairly dramatic way. A different economy emerged - and a different Sweden is the result.

A major study published these days by McKinsey tries to analyze the performance of the Swedish economy during the years since 1995.

Their conclusion is that the good performance has mainly been because of the rapid increase in productivity in the private sector, which they explain by a combination of our entry into the European Union, our more stricter competition policy and by the rather radical structural reforms in terms of liberalisation, privatisation and deregulation undertaken in the early 1990's.

Thus the success of the Swedish companies on the world markets and the dramatic shift you see in these curves.

That's the story of the economy of Sweden during the past few decades.

I produced the graph in connection with a speech I delivered in Stockholm earlier today on The Art of Governance. A rather ambitious title, to put it mildly.

But in it I tried to look both back on the past decades in Sweden, as well as forward on the new tasks and challenges a new government later this year will be confronted with.

The speech is unfortunately in Swedish - but there might be those interested in it anyhow.