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My understanding is that Sweden has drawn a significant portion of its revenues from North Sea oil, but that they are anticipating significant declines in produ

My understanding is that Sweden has drawn a significant portion of its revenues from North Sea oil, but that they are anticipating significant declines in production (and therefore revenue). They are preparing for this by grdually restructuring (read: cutting) government services and benefits to fit their anticipated revenue, with the added benefit that doing so in advance allows them to build up a decent nest-egg. In other words, they are doing something incredibly rare for a government: budgeting in a responsible and rational manner.

arethuza 15y ago
I didn't know that Sweden had any oil - unlike Norway next door that is practically floating on the stuff.
mseebach 15y ago
I couldn't find anything definitive on Google, but I don't think Sweden has that much oil, and if they do, it's not in the North Sea (which isn't bordering Sweden). (You might have meant to refer to Norway or Denmark which fits your description quite well)
RuadhanMc 15y ago
Pretty sure that you are thinking of Norway. Sweden doesn't do oil in any serious way. Sweden is trying to be oil-free. http://en.wikipedia.org/wiki/Making_Sweden_an_Oil-Free_Society http://en.wikipedia.org/wiki/Making_Sweden_an_Oil-Free_Socie... According to Wikipedia (http://en.wikipedia.org/wiki/Economy_of_Sweden http://en.wikipedia.org/wiki/Economy_of_Sweden) Sweden's main industries are: telecommunications equipment, wood pulp and paper products, motor vehicles, pharmaceutical products, iron and steel. That's quite a nice spread.
- bh42222 15y ago
  Sweden's main industries are: telecommunications equipment, wood pulp and paper products, motor vehicles, pharmaceutical products, iron and steel. And ABBA. (I'm only half joking the royalties on their music equal quite a few Volvos.)
  - bh42222 15y ago
    Replying to myself because someone on the Internet is wrong! ... between 1974 and 1982,they earned nearly twice the GNP of Sweden From: http://www.artistfacts.com/detail.php?id=322 http://www.artistfacts.com/detail.php?id=322
    - RuadhanMc 15y ago
      That is pretty staggering... This too: "When ABBA was active, only the Volvo car company made more money in Sweden.".
Tuna-Fish 15y ago
Sweden has practically no oil production at all, and never had any. The Scandinavian country with large oil reserves is Norway. What you are talking about doesn't even describe Norway properly -- they have largely not spent the revenue they got from oil. Instead, it has been collected into a sovereign wealth fund. At present, the fund holds some $100 000 for every Norwegian. Future decline of oil profits will be covered by the investment income from the fund. There hasn't been any cutting of government services to fit revenues -- there hasn't been any need to. Sweden, like the other Scandinavian countries, has held a responsible and rational budget for most of it's existence as a democratic country. So while it might be incredibly rare for governments worldwide, for some reason it seems that the Scandinavians can make the idea of a well-run welfare state work. I have yet to figure out why they can do it and most of the rest of the world seemingly can't.
- furyg3 15y ago
  The Norway situation you describe is correct. Normally an influx of wealth from oil (or other natural resources, even humanitarian aid) will suppress the country's abilities to be competitive in manufacturing or other (non-oil) sectors. It's often called a "Resource Curse" or "Dutch Disease". Avoiding the curse requires not to spending the oil money directly... and instead to invest it and spend only the interest.
- henrikschroder 15y ago
  > I have yet to figure out why they can do it and most of the rest of the world seemingly can't. It helps a lot to have a small country with an ethnically homogenous population, extremely low corruption, high tax morale, and high public trust of government offices and institutions.
  - bh42222 15y ago
    It helps a lot to have a small country Maybe, or a big but dictatorial country like China. an ethnically homogenous population Care to elaborate? Would you consider countries such as Switzerland, Canada, Taiwan, and Singapore ethnically homogeneous? extremely low corruption, high tax morale, and high public trust of government offices and institutions. Chicken and egg problem - High tax compliance and trust in government come from having a reasonable tax rate from which you get a lot of effective government services. Low corruption is a pre-requisite for trust in government institutions. I bet what also helps is not having a culture of cousin marriage, that seems to create a culture where is much more difficult to have any kind of trust with people outside of your clan. I think the modern well functioning democracy is to a very large degree a result of complex game theory. You don't have to look back much more the 2 centuries, to see thousands of years of European history that's full of corruption, lawlessness, crushing tax rates, all the typical modern day 3rd world problems and then some. If just being Swedish led to modern Sweden, Swedish history would be a lot less interesting. For one, it would almost certainly be entirely Viking free.

arethuza 15y ago

I didn't know that Sweden had any oil - unlike Norway next door that is practically floating on the stuff.

mseebach 15y ago

I couldn't find anything definitive on Google, but I don't think Sweden has that much oil, and if they do, it's not in the North Sea (which isn't bordering Sweden). (You might have meant to refer to Norway or Denmark which fits your description quite well)

RuadhanMc 15y ago

Pretty sure that you are thinking of Norway. Sweden doesn't do oil in any serious way. Sweden is trying to be oil-free. http://en.wikipedia.org/wiki/Making_Sweden_an_Oil-Free_Society http://en.wikipedia.org/wiki/Making_Sweden_an_Oil-Free_Socie... According to Wikipedia (http://en.wikipedia.org/wiki/Economy_of_Sweden http://en.wikipedia.org/wiki/Economy_of_Sweden) Sweden's main industries are: telecommunications equipment, wood pulp and paper products, motor vehicles, pharmaceutical products, iron and steel. That's quite a nice spread.

bh42222 15y ago
Sweden's main industries are: telecommunications equipment, wood pulp and paper products, motor vehicles, pharmaceutical products, iron and steel. And ABBA. (I'm only half joking the royalties on their music equal quite a few Volvos.)
- bh42222 15y ago
  Replying to myself because someone on the Internet is wrong! ... between 1974 and 1982,they earned nearly twice the GNP of Sweden From: http://www.artistfacts.com/detail.php?id=322 http://www.artistfacts.com/detail.php?id=322
  - RuadhanMc 15y ago
    That is pretty staggering... This too: "When ABBA was active, only the Volvo car company made more money in Sweden.".

Tuna-Fish 15y ago

Sweden has practically no oil production at all, and never had any. The Scandinavian country with large oil reserves is Norway. What you are talking about doesn't even describe Norway properly -- they have largely not spent the revenue they got from oil. Instead, it has been collected into a sovereign wealth fund. At present, the fund holds some $100 000 for every Norwegian. Future decline of oil profits will be covered by the investment income from the fund. There hasn't been any cutting of government services to fit revenues -- there hasn't been any need to. Sweden, like the other Scandinavian countries, has held a responsible and rational budget for most of it's existence as a democratic country. So while it might be incredibly rare for governments worldwide, for some reason it seems that the Scandinavians can make the idea of a well-run welfare state work. I have yet to figure out why they can do it and most of the rest of the world seemingly can't.

furyg3 15y ago
The Norway situation you describe is correct. Normally an influx of wealth from oil (or other natural resources, even humanitarian aid) will suppress the country's abilities to be competitive in manufacturing or other (non-oil) sectors. It's often called a "Resource Curse" or "Dutch Disease". Avoiding the curse requires not to spending the oil money directly... and instead to invest it and spend only the interest.
henrikschroder 15y ago
> I have yet to figure out why they can do it and most of the rest of the world seemingly can't. It helps a lot to have a small country with an ethnically homogenous population, extremely low corruption, high tax morale, and high public trust of government offices and institutions.
- bh42222 15y ago
  It helps a lot to have a small country Maybe, or a big but dictatorial country like China. an ethnically homogenous population Care to elaborate? Would you consider countries such as Switzerland, Canada, Taiwan, and Singapore ethnically homogeneous? extremely low corruption, high tax morale, and high public trust of government offices and institutions. Chicken and egg problem - High tax compliance and trust in government come from having a reasonable tax rate from which you get a lot of effective government services. Low corruption is a pre-requisite for trust in government institutions. I bet what also helps is not having a culture of cousin marriage, that seems to create a culture where is much more difficult to have any kind of trust with people outside of your clan. I think the modern well functioning democracy is to a very large degree a result of complex game theory. You don't have to look back much more the 2 centuries, to see thousands of years of European history that's full of corruption, lawlessness, crushing tax rates, all the typical modern day 3rd world problems and then some. If just being Swedish led to modern Sweden, Swedish history would be a lot less interesting. For one, it would almost certainly be entirely Viking free.