Perspectives from Around the World

Sweden and the Welfare System

Ambassador of Sweden to Japan

For Lars VARGÖ's full bio,

Sweden is a small country when it comes to population size, only 9.5 million people. However, the surface area of the country itself is one of the largest in Europe. The country has also been blessed with relatively abundant natural resources, such as iron ore and vast forests. It is an advanced industrialized country which from the very outset has looked upon the world as its market. Trade with the outside world has been as important as the air we breathe.

Over the years, Sweden has also managed to build a society based on shared values such as democracy, gender equality and fair and easy access to health care and education. This has been possible thanks to efforts by many, and the results we see today should not be understood as a finished product or an easily exported formula. Sweden's society is the result of continuous debates and discussions on both local and central levels, and one important guiding principle has been an open society.

Sweden has one of the strongest economies in Europe. There are many reasons for this, but one important aspect behind this has actually been the participation on the labour market by women and people born in other countries. It is no exaggeration to say that Sweden is one of the most gender equal countries in the world. And this is not something that has happened by chance. It is the result of serious efforts by lawmakers as well as non-governmental organizations and people in general. Increased participation of women in the labour market has actually also contributed to the relatively high birth rate we have today, 1.98. To make this possible, child care has been expanded and parental benefits increased. There are of course many other factors behind Sweden's relative success, and a quick look at the Swedish government's recently presented budget bill for 2014 reveals a wide net of measures aiming at both economic growth and a strengthened welfare system.

In order to support growth and permanently increased employment, the government aims at strengthening household finances through an increase in the income tax credit and a raised threshold for the state income tax, plus lower taxes for pensioners. The tax system is an essential key to Sweden's welfare system, but high taxes are not a goal in itself. Through taxes, the government receives important funding, but, when it is possible, the tax burden is lowered. And in order for this to happen, it is essential that people find work. It is especially true for young people, who can enter a negative spiral of alienation from the labour market if they stay outside of it too long. Therefore, introductory vocational jobs for the young are introduced, as well as support for apprenticeship and various kinds of vocational programs. In parallel, a reduced economic burden for business through reduced economic social security contributions for the young is introduced.

Almost one-fifth of the population of Sweden consists of foreign-born persons. It is essential that they are integrated in society, both because they constitute an important part of the vitality of Swedish society, but also because everyone should feel welcome once they have settled down. Conflicts between ethnic or social groups are in no one's interest. Special efforts have to be directed towards newly arrived immigrants, helping them with language training and other ways to integrate in society.

A more flexible and secure labour market through state support for short-time employment and measures to improve labour market flexibility are also necessary. This flexibility is not aimed at making it easier for employers to exploit workers. On the contrary, in order to strengthen the rights of everyone on the labour market, it has always been important to be active on that very market. This also means that one has to have good opportunities to follow up job-seeking activities and clear requirements for those taking part in labour market policy programs.

To become attractive as a future employee, a good education is probably the most important. Without proper education, society will suffer as a whole, and good decisions about the future directions society might be endangered. Therefore, today, the government puts a lot of effort on focusing on learning in schools, including more hours spent on instruction in mathematics, homework support and measures to enhance teachers' skills and career opportunities. Education has always been a cornerstone in modern Swedish society, regardless of the government. This is also true for research and development (R&D), where innovation and entrepreneurship have to be encouraged. Eased tax conditions for the business sector and reduced administrative burdens are also in the planning.

Increased support to the most financially vulnerable groups through an increase in the special allowance for children in the specific housing allowance, which is available to some, is one way to lessen income differences of the households, as is a higher income threshold for the housing supplement for pensioners and recreational activity allowances for children.

When talking about the Swedish model, the health care system is almost always mentioned as a striking success. It is aimed at being affordable for everyone, but there is always room for improvement. Increased quality, effectiveness and efficiency in health care and social services through a multi-year initiative for people suffering from chronic illnesses, more opportunities to participate in health care education programs and better alcohol rehabilitation programs are some of the latest measures being introduced. It is also necessary to create a pricing model for pharmaceutical products to ensure that Sweden does not pay more for pharmaceuticals than other comparable countries.

In Sweden, there is a monopoly for the distribution of alcohol. Some decades ago, shops selling alcohol had short opening hours and a relatively unattractive way of selling the products. This has been widely improved, and the atmosphere in these shops today is not different from what can be found in other parts of Europe. People working in the shops have also advanced knowledge of different wines and often give advice on what to choose for what kind of food, etc. However, there is clear a differentiation when it comes to different kinds of alcohol. Taxes on beer and wine are relatively low, whereas tax on strong alcohol, like vodka and aquavit, is relatively high. This is always a subject of debate in Sweden, but most people agree that with the centuries-old tradition of drinking very strong alcohol that Sweden as a cold-climate country has, encouragement of healthier drinking habits through various forms of taxation can be in everyone's interest.

Swedes in general take pride in the clean environment we live in. Our cities are not big by international standards, and differences between urban and rural areas are not that big. This is something most Swedes would like to keep. When it comes to the size of buildings and creating large areas of urban landscapes Swedes are relatively conservative, but when it comes to protecting the environment through a number of measures, we can be quite radical. Protection of biodiversity, our beautiful countryside and our clean air is considered as important as protective measures for vulnerable members of our society.

I believe the Swedish and Japanese peoples are closer than we think. Sweden and Japan are two countries far apart, but our social behavior is actually quite similar. Both Swedes and Japanese are considered to be timid and relatively quiet. A person who speaks loudly and doesn't care what others think is considered to be doing something wrong. Exaggerating one's own importance at the expense of others is a human quality which is not encouraged. On the contrary, we both look for consensus decisions, and we don't like differences that are sticking in the eye. This makes our decision making processes a bit drawn out, sometimes even slow, but once we have reached a decision, we know that all stones have been turned and side effects have been sufficiently discussed.

Having said that, it is obvious that the societies in Sweden and Japan also have large differences. Of course, most importantly perhaps, the population of Japan is more than 10 times larger than that of Sweden. This puts a lot of pressure on both society and the environment. Our industries are producing similar products and are both competing and complementing each other. But if you look at the participation of women on the labour market, we are quite different. Our schools are also different. I get the impression that the most important aspect of teaching in Japan is discipline. Of course, in order to learn an environment where there are few distractions is necessary. But so is creativity, and in Sweden, students are encouraged to find their own solutions to problems and, through that process, build self-confidence. A student who questions what is being taught can be as valuable as one who tries to learn as many established facts as possible. I also think that the number of students in each class is less in Sweden than in Japan. This makes it easier to emphasize other aspects of teaching than just order and discipline.

Whatever differences or similarities, Swedes like Japan, and it also seems as if the Japanese like Sweden. Let's keep it that way.

October 2013

October 1, 2013

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