Chapter 9: Sweden
A military power during the seventeenth century, Sweden has not participated in any war for almost two centuries. An armed neutrality was preserved in both world wars. Sweden’s long-successful economic formula of a capitalist system interlaid with substantial welfare elements was challenged in the 1990s by high unemployment and in 2000–2002 and 2009 by the global economic downturns, but fiscal discipline over the past several years has allowed the country to weather economic vagaries. Sweden joined the EU in 1995, but the public rejected the introduction of the euro in a 2003 referendum. Aided by peace and neutrality for the whole of the twentieth century, Sweden has achieved an enviable standard of living under a mixed system of high-tech capitalism and extensive welfare benefits. It has a modern distribution system, excellent internal and external communications, and a skilled labor force. In September 2003, Swedish voters turned down entry into the euro system, concerned about the impact on the economy and sovereignty. Timber, hydropower and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Privately owned firms account for about 90 per cent of industrial output, of which the engineering sector accounts for 50 per cent of output and exports. Agriculture accounts for little more than 1 per cent of GDP and of employment. Until 2008, Sweden was in the midst of a sustained economic upswing, boosted by increased domestic demand and strong exports.
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