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WHY is Scandinavia so rich? Why are Scandinavian/Nordic countries so wealthy?

WHY is Scandinavia so rich? Why are Scandinavian/Nordic countries so wealthy?

NordenBladet – Probably many people have ever wondered why the Nordic countries are so rich and enjoy a very high standard of living. Nordic countries become richer and year after year increase their international influence, turning Scandinavia into one of the most significant figures in the global economy. This fact surprises many people from all around the world and makes them wonder “why”.

“Scandinavian/Nordic countries climbed the ladder with very different paths. The only thing that is common is the small population & universal education,” tells Balaji Viswanathan, CEO of Invento Robotics to Quora.

Here you can read his views:

🇸🇪 Sweden:
Like Switzerland, Sweden was able to preserve its neutrality during both the world wars and had a dramatic peace dividend. In the post-war growth, Sweden gained an upper hand with its intact production and labor.

🇳🇴 Norway:
Norway is the Saudi Arabia of Europe. Its population that could fit in a New York Borough or a Tokyo suburb, is blessed with an enormous oil reserve. Just like other small oil republics such as Kuwait, Brunei and UAE, Norway is able to provide high welfare levels to its citizens. Mix Hard working population + abundant resources and you get a recipe for high growth.

During the time of great depression it escaped a lot of harm by ditching the gold standard quite soon (Keynes attributes to the long nature of depression in other countries due to the hard money standards). However, its biggest growth phase came post 1970s when oil prices shot substantially. Read more about The Economic History of Norway.

🇫🇮 Finland:
Unlike its other Nordic neighbors, Finland was an economic backwater until a couple of decades ago. Since then its investments in electronics & heavy industries paid off. Nokia, Rovio Mobile (makers of Angry Birds) and KONE elevators call Finland their home.

Like Israel, Finland has a small and a well-knit population of well educated people. This strength enabled it to grow strong in the service & the information revolution since the 1980s.

🇩🇰 Denmark:
Unlike the other Nordic countries, Denmark has been a rich country for centuries. It was a major colonial power and its proximity to Netherlands & Britain helped the ideas move there quite quickly. Like Sweden, it stayed neutral during the wars and some of the damage was averted. Although it was occupied by Germany in WW-II, there was not too much of the destruction. Read more about it here: An Economic History of Denmark.

“Each of the four Scandinavian countries are different, and I think I’ll explain each one separately. It is a common misconception to think that all four countries got wealthy the same way, and that’s not true, but what’s true is that their current post-wealthy policies are pretty similar,” tells Stephen Kumar to Quora.

Here you can read his views:

🇸🇪 Sweden:
Sweden started developing its industries from an agrarian society and had become an industrialised country by WWII. A communist revolution had been avoided in 1917 and Sweden became a parliamentary democracy. After the war, Sweden took advantage of its prior industrialization and joined the OECD and the Marshall Plan. It attracted big companies and slowly became richer until the sector transferred from secondary industries to tertiary industries. However, Sweden suffered from economic crisis and decline in the late 80s and early 90s. It joined the EU and its economy today has been boosted by migrant workers. Sweden is not successful that much economically, but it has been great at treating its citizens apparently.

🇳🇴 Norway:
Norway has “extensive reserves of petroleum, natural gas, minerals, lumber, seafood, fresh water and hydro-power”. Norway was a normal country (as were most Scandinavian countries) until the Philips Petroleum Company discovered oil offshore, and today oil accounts for a quarter of Norway’s GDP. It is also to be noted that Norway would have probably been a pretty rich country without oil, noting that the number of workers in industry peaked in 1975, just after the discovery of oil.

🇫🇮 Finland:
Finland is a peculiar case. Its economy was not too great until 1991, when it plummeted due to the loss of its main trading partner, the Soviet Union. The depression reached its trough in 1993 and Finland has experienced huge net economic growth since then. Its GDP per capita has taken a long jump-esque leap to USD $46000. It has a population about 5 million and has a reputation for the Nordic system of democracy and economic success.

🇩🇰 Denmark:
Denmark was one of the founding members of the United Nations and the EFTA (European Free Trade Organisation). It experienced great economic growth due to its flexi-security model, which allows employers to start a business easily and hire and fire at will while the unemployed are supported by a strong Nordic safety net. Denmark also has many degree-holders and free-trade supporters who support this model and Denmark is the easiest place in Europe to start a business.

Here we´ll list 8 more reasons, why Scandinavia is so rich:

1st reason: One of the hallmarks of the Nordic countries is the combination of large area and small number of people living there. In Scandinavia are some of the larger European countries that are also among the countries with the lowest population density in the world. The considerable wealth of these countries is easily distributable among the sparse population. This means that the population has very high GDP (gross domestic product) per capita. For these countries is relatively easy to satisfy their own needs and at the same time to export high quality goods and services.

2nd reason: The Scandinavian countries have a favorable economic occupation. Their neighbors are large and highly developed countries (Germany for example). These countries are bordered by the Atlantic and Arctic Oceans, North and Baltic Seas. These waters are extremely rich in fish and in many places, especially along the coast of Norway, there are significant deposits of oil. The long coastline favors the development of water transport. Not accidentally for centuries the Scandinavians have always been known as exceptional sailors.

3rd reason: The Scandinavian countries are specialized in the production of a given product or service, occupying a specific market niche in the world. Norway is a global manufacturer of oil that is extracted from the bottom of the North Sea. Sweden is known for its high quality steel, paper and automobiles and Finland is one of the world’s leading manufacturers of mobile phones. Despite its small territory, Denmark is among the leading food producers in, as well as one of the world leaders in the production of renewable energy. Iceland is famous for the export of fish and fishery products from the rich Arctic waters.

4th reason: Sweden, Norway, Finland, Denmark and Iceland are countries with cold and dark climate. Because of this reason the lifestyle is absolutely different in comparison with the summer holiday atmosphere which prevails in South Europe. In most of the year the weather conditions in the Nordic countries are too unfavorable. This causes people to find indoor activities, to indulge in work, learning and other forms of self-perfection in order to go faster through the freezing and depressing winter months. The cold climate has built a completely different habits in the Nordic people. In the Mediterranean countries, because of the hot and lazy weather during the summer season people spend a lot of time outdoors. This leads to more time for socializing and less time for working and learning. The sun makes people seek entertainment. The unbearable summer heat, especially in July and August, makes people almost unable to work.

5th reason: To a large extent the wealth of the Scandinavians is a result of financial and tax policy. Nobody can deny that it is important not only how exactly developed is the country, but also what kind of wealth distribution policy is being held. In the modern western societies and states, of course, the role of countries in the income redistribution is relatively small. As a whole the government intervention is considered to be very unfair and unpopular. To a large extent the government intervention into the economy is limited to the imposition of taxes. That is the main lever, which has made countries like Sweden, Norway, Finland, Denmark and Iceland so successful. Taxes in the Nordic countries are very high. Most benefited of this social policy are poor, elderly, unemployed, young and still vulnerable people (e.g. students) and low-income people. The wealthy residents of the Nordic countries are not particularly happy with the fact that they have to be separated by significant part of their incomes. Besides the fact that Scandinavia assists people with lower incomes, it invests also large sums of money in science, health and development of high technology, which guarantees future success of the region. When the state on one hand takes care of people to be healthy, educated and confident in their future, they on the other hand make it up by developing the full potential of their capabilities, regardless of what they can do. Thus, generally speaking, the Nordic countries form strong nations consisted of ambitious, confident and calm people and this is probably the biggest wealth of these countries.

6th reason: Sweden, Finland and Denmark are members of the European Union and Iceland is in talks to join. Only Norway is not a member of EU but maintain very close economic relations with the community. The EU membership and partnership is a very solid foundation for economic development of the Nordic countries. It is encouraging for them to know that they can rely to the support of the biggest market in the world. The European Union is a guarantee that countries will never be “hungry” for high and low skilled workers. It is also a guarantee that goods and services producing in these countries will have a much bigger market in comparison with their own.

7th reason: The Nordic states enjoy an outstanding order, security and peaceful way of life. It will not be an exaggeration to say that these are the countries with the lowest crime rate in the world. This in turn is a really good advertising and attracts numerous investors. Scandinavia is a region where people have very high confidence in the judiciary and police, which is a very good basis for development of stable society. Perhaps this is the right place to mention that in the Nordic countries alcohol consumption is quite limited due to the highly inflated prices. This fact with certainly has its positive impact on crime.

8th reason: Equal treatment is also among the leading causes that put Scandinavia on top of the world’s wealth and quality of life. And this is not only a question of ethnic and religious equality. It comes also to gender equality. Sweden is known as the country in the world where women rights are most respected. Iceland on the other hand is first in the world according to important state positions in the country, occupied by women. The equality between men and women causes very positive impact on the economy. Because of this reason the population in the Nordic countries is more functional economically.

Featured image: Sweden, Stockholm (NordenBladet/Helena-Reet Ennet)

Read also:
WHO ARE rich in Scandinavia? List of Nordic dollar billionaires (Forbes’ 2017-edition of the world’s billionaires)

Scandinavian media mogul Helena-Reet Ennet: MY JOURNEY TOWARDS BECOMING A BILLIONAIRE or How to join the world’s most elite group of people?

24-year-old Gustav Magnar Witzøe is Norway’s richest with a capital of NOK 11.1 billion

TOP 10 Scandinavian media groups – Bonnier, Sanoma, MTG, Schibsted, Egmont, Aller, YLE, Otava, Alma, NordenBladet

 

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