Swedish
Prime Minister defends
his socialist model
By
Jonathan
Power
TFF Associate
since 1991
Comments to JonatPower@aol.com
August 24, 2005
LONDON - The statistics had arrived
on the Swedish prime minister's desk that morning, his
first day back at work after his summer vacation, cycling
around the villages near his summer estate.
It was good news. Gorän
Persson, now in his ninth year of office, told me that
the growth rate for this year will be near 3% and next
year more than 3% - enough, he said, to maintain Sweden's
trajectory of the last decade which was "above the
average for the European Union" and, in particular, "as
good as the Anglo-Saxons, Britain and the U.S." (Although
he admitted that for the U.S. he was referring to per
capita growth, so as to discount the effect of its fast
population growth due to rapid immigration.)
This begged the first question- how
does this self-confessed socialist state do it? What is
the secret for success when Swedish taxes are the highest
in the world and the welfare state is the country's
single largest employer? After all when Persson came in
as finance minister in 1994 the country was reeling
economically, as state expenditures on the health and
social sectors raced ahead of the country's ability to
generate wealth.
"If you have a free economy,"
explained the prime minister, "a highly educated work
force, a very healthy people, very high productivity and
a sound environment then you can create the critical size
of resources to create good growth".
"That has to be joined with
adequate public financing of universities, research and
development. As long as we are efficient and constantly
challenging ourselves we continue to be
productive."
"Then if we produce successful
growth the government gets the public's support for high
taxes. If the quality of the public sector is good then a
prosperous people will continue to vote for funding
it."
The Social Democrats have been in
power for most of the last 73 years, with only nine years
in opposition. But recently public opinion has turned
away from the government, partly because of the prime
minister's apparent dictatorial style and partly because
of a series of scandals including his slow response to
the tsunami when hundreds of Swedes on vacation in
Thailand died.
Despite the malaise reflected in
the polls Persson appears to relish the coming electoral
fight. The key economic statistics are good, he argues,
with low inflation, low interest rates, and with the
economy finally moving from the export dominated growth
of previous years to domestic driven growth, which
promises rapid job creation.
Moreover, he feels he is having
some success in dealing with the criticisms that have
been made of the welfare state. Many have observed that
Sweden cannot sustain its generous womb-to-tomb system if
so many Swedes abuse the system by calling in sick and
claming unnecessary disability leave. On an average day
one fifth of the potential workforce is claiming these
rights, in a country that along with France and Japan is
the healthiest in the world. "I had a new report on my
desk today to show that we are getting these figures
down. It is now under control. We have given employers an
incentive to convince their personnel to return from sick
leave by offering them a tax benefit if they succeed.
This means that they should improve their environment and
their conditions of work. At the same time we have been
scrutinising those doctors who have been too generous in
signing sick notes."
Persson, lounging back in his chair
and gazing out of the window that looks out on the
capital's beguiling mix of waterways, eighteenth century
Renaissance palaces and grand houses, ends the
conversation with two quick jabs. "Europe has a lack of
confidence vis a vis the U.S.. The U.S. is competitive,
but not as competitive as we think. We are too
self-critical in Europe even though we have a much better
social system and in Sweden are just as productive. On
unemployment it is overlooked that the U.S. has
approaching 2 million people in jail and out of the
labour market."
As for the opposition's claim that
he might raise taxes he seems blithely unconcerned. "I
have no plans for that at the moment, as the economy is
doing so well. But if at the election I have to go to the
Swedes and ask them to approve a tax rise so that we can
improve our health services even more, I believe they
will support me."
The sweet arguments of success? Or
the arrogance of too long in power? In just a year's time
the voters will decide. Meanwhile, the prime minister of
the world's most successful socialist state gives notice
he is in no mood to step down and pursue one of his two
unfulfilled vocations - as either a priest or a
farmer.
Copyright © 2005 By
JONATHAN POWER
I can be reached by
phone +44 7785 351172 and e-mail: JonatPower@aol.com
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