Investing in Swedish Securities

Abstract

BARELY A LIFETIME AGO, Sweden was an underdeveloped nation, with the great bulk of the population toiling in a primitive agricultural society. As a consequence of rapid and comparatively steady economic growth, essentially during the last quarter of a century, today's 7,600,000 Swedes have a highly industrialized country with a living standard substantially above average. Sweden enjoys the highest standard of living in Europe, and second highest in the world, ranking only behind the United States in the production of goods and services per capita. In 1962, the Swedish Gross National Product amounted to 81 billion kronor ($15.7 billion). Per capita income came to 10,700 kronor ($2,100) as compared with $2,900 in the United States and about $1,350 in the United Kingdom. As an index of rapid economic growth, compare this year's expected results with 1946 and 1938. In 1938, the Swedish GNP came to a mere 12.5 billion kronor. By 1946, the Swedish GNP was 23 billion kronor. At an estimated 88-89 billion kronor, the 1963 GNP will be more than seven times that of 1938 and almost four times that of 1946. (All figures are market prices for the years stated). Sweden owes its high standard of living, its progressive growth to a constellation of factors. It enjoys valuable starting capital in the form of extensive natural resources-forests, iron ore, water power and a literate, skilled population. Swedish industry is to an extensive degree based upon these resources. Peaceful labor market conditions, a system of low tariffs and import-export regulations devoid of numerous restrictions, as well as 150-year old policy of neutrality which enabled it to escape involvement in two global conflicts, have also been important factors in the development of the Swedish economy. To Americans, Sweden is usually equated with state socialism, the welfare state, the middle road, the cooperative movement. In actuality, the Swedish economy is a unique amalgam of relatively little direct government participation in economic activities; cradle to the grave welfarism which Swedes champion vocally and practice wholeheartedly, and of predominance of free enterprise. As Marcus Wallenberg, vice chairman of Stockholm's Enskilda Bank and chairman of L. M. Ericsson Telephone Company, recently pointed out to the National Industrial Conference Board in New York: Sweden's economy is based predominantly on private enterprise. More than 90% of the manufacturing industry is in private hands. Sweden pursues an economic course which is a far cry from the state socialism of the Soviet Union. The Swedish economy may be relatively more regulated than the American economy, but this regulation is one self-imposed by labor and management, and not by government edict.