Finland: Economic and Political Outline

Economic Overview

Often used as an example for its economic performances and its competitiveness and innovative successes, Finland is one of the countries in the euro zone which has been hit the hardest by the crisis of 2008/2009, due to a collapse of exports. After shrinking by 8% In 2009, the economy rebounded, driven by the processing industry and semi-furnished goods stimulated by both foreign and domestic demand. After it grew by an estimated 3% in 2011, it is expected to shrink by 1% in 2012 due to the recession in the eurozone.

The global financial crisis and the stimulus measures had a profound and durable impact on public finances and debt levels. The main obstacle which the government now must deal with is therefore to combine measures to promote growth and measures allowing for the rebalancing of accounts. The new governmental coalition has decided to implement a program of reduction of public spending and a tax increase. In the more long-term perspective, the aging population is also a source of future pressure on spending. Structural reforms focused on increasing productivity and employment offer are therefore necessary.

Its GDP being among the highest in the world, Finland offers a high living standard. The distribution of wealth is fair, however, social inequalities have risen in the recent years. Affected by the crisis, the unemployment rate has also increased considerably, reaching around 7.9% today.

Main Sectors of Industry

Agriculture represents less than 3% of the current Finnish GNP and employes less than 5% of the population. Because of the unfavorable climate, agricultural development is limited to the maintainace of a certain level of self-sufficiency in basic products. Cereal production dominates, well ahead of milk production and animal husbandry. Finland's accession to the EU has further accelerated the process of restructuring and downsizing of this sector.

Forestry is traditionally well-developed: Finland exports a rich variety of products randing from simple wooden products to high-tech tags and labels and including paper, cardboard, packaging etc. Other key industrial sectors are metal production, mechanical engineering and electronic goods. Finland specializes in exporting information and communication technologies, Nokia becoming the world leading manufacturer of mobile handsets.

The service sector employs almost 70% of the population and accounts for almost 65% of the GDP.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

74.0/100

Position:

Mostly free

World Rank:

17/179

Regional Rank:

8/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Ministry of Employment and the Economy
Ministry of Agriculture and Forestry
Ministry for Foreign Affairs

Statistical Office

Statistics Finland

Central Bank

Bank of Finland

Stock Exchange

OMX Helsinki Stock Exchange

Other Useful Resources

The CIA World Factbook

Main Online Newspapers

Helsingin Sanomat international edition
Helsinki Times
Finnish Broadcasting Company YLE: news in English
Kauppalehti online (in Finnish only)
Taloussanomat (in Finnish only)

Economic Portals

Finnguide

Political Outline

Type of State

Republic, democracy.

Executive Power

President of Finland is the head of state, leads the foreign policy, and is the Commander-in-Chief of the Defense Forces. The main executive power lies in the cabinet appointed and headed by the prime minister. Before the constitutional rewrite, which was completed in 2000, the president enjoyed more power.

Legislative Power

Legislative power is vested in the Parliament of Finland (Eduskunta), and the government has limited rights to amend or extend legislation. The president has the power of veto over parliamentary decisions although it can be overrun by the parliament.

Main Political Parties

Finland has a multi-party system where a single party does not have chance to gain power alone; so parties work with each other to form coalition governments. The main political parties in the country are:
- Center Party (Suomen Keskusta) – a centrist political party, traditionally representing rural interests having strong political influence in small municipalities;
- National Coalition Party (Kansallinen Kokoomus) – a right-wing party draws its major support from business community and urban professionals;
- Social Democratic Party (Suomen Sosiaalidemokraattinen Puolue, SDP) – follows social-democratic ideology, draws its major support from country's working class;
- Greens (Vihreät) - advocates environmental interests;
- The Swedish People's Party (SFP) (in Finnish) – a moderate liberal party of Swedish speaking minority.

Current Political Leaders

President: Sauli NINISTO (since 1 March 2012) – National Coalition Party
Prime Minister: Jyrki KATAINEN (since 22 June 2011) - National Coalition Party (Kansallinen Kokoomus)

Next Election Dates

Presidential: February 2018

Indicator of Freedom of the Press

World Rank:

1/179

Evolution:

same place compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).