Travel

Swedish flagSweden Country Brief

Introduction

Sweden is a Nordic Country on the Scandinavian Peninsula in Northern Europe. It is the fifth largest country by area in Europe (449,964 square kilometres) with a population in 2007 of 9.18 million. The capital of Sweden is Stockholm. Sweden celebrates its National Day on 6 June.

Political Overview

Sweden is a constitutional monarchy and has a parliamentary system of Government. King Carl XVI Gustaf exercises only ceremonial functions as Head of State. Executive power rests with the Cabinet, which is responsible to the unicameral Riksdag (Parliament) comprising 349 members who are directly elected every four years on a proportional basis. Voting is not compulsory but turnout is usually high, at over 80 per cent.

The centre-right Alliance for Sweden, a coalition comprising the Moderate Party, the Centre Party, the Liberal Party and the Christian Democrats, gained a slim seven-seat majority in the September 2006 election.. A centre-right coalition last held government in 1991-94. The new Prime Minister, Fredrik Reinfeldt of the Moderate Party, has set an ambitious program of reforms focused on tackling unemployment, introducing tax cuts and improving the education system. Outgoing Prime Minister of 12 years, Goran Persson, of the Social Democratic Party minority government, stepped down from the party leadership and was succeeded by Mona Sahlin.

Sweden joined the EU in 1995, following a referendum in which a narrow 52 per cent of electors voted in favour. However, in a referendum in September 2003 the Swedes rejected joining the Euro Zone by 56 per cent. Although not a member of NATO, Sweden acknowledges the key role NATO plays in European Security and participates through the Partnership for Peace Program.

Sweden's key areas of foreign policy focus are development assistance, conflict prevention, peacekeeping, the environment, refugees and trade policy. Sweden regards the UN as having overall responsibility for international peace and security and the EU, the Council of Europe and the Organisation for Security and Cooperation in Europe (OSCE) as the principal vehicles for promoting and sustaining democracy in Europe.

Foreign policy reflects a commitment to exploring avenues of closer cooperation with security and defence mechanisms in Europe, while not abandoning Sweden's formal doctrine of "non-alignment in peace to ensure neutrality in war". Nordic-Baltic cooperation is an increasingly important aspect of Sweden's foreign policy.

Economic Overview

GDP growth for 2008 is forecast to fall from 2.6 per cent in 2007 to 2 per cent in 2008, after a rise in 2006 to 4.1 per cent.

The Swedish economy is heavily dependent on a highly developed and internationally successful industrial sector, which was established in the early part of the 20th century through companies such as Ericsson, Asea, Astra, Alfa Laval, SKF, Electrolux, Volvo and SAAB, and now includes more recently established companies such as H&M and IKEA. However, many of the flagship companies are now totally or partially owned by foreign companies and shareholders. There have been several structural reforms since Sweden became a member of the EU such as the deregulation of the telecommunications, energy and air traffic sectors.

Bilateral Relationship

The bilateral relationship between Australia and Sweden is strong, particularly in the areas of trade and education services. A significant number of Swedish students are studying in Australia. Australian students are also studying in Sweden. Since 1 July 2001 a bilateral Working Holiday Maker Arrangement has been in effect between Australia and Sweden. Australia has a Double Taxation Agreement with Sweden.

Their Majesties King Carl XVI Gustaf and Queen Silvia visited Australia in November 2005 along with a high level Swedish business delegation. Crown Princess Victoria also visited Australia in March 2005. Other visits include: Minister for Employment, Sven Otto Littorin, and Minister for Social Security, Cristina Husmark Pehrsson (February 2008), Prime Minister Göran Persson (February 2005); HM King Carl XVI Gustaf and HM Queen Silvia (September 2000).

There have been numerous high level visits by Australians including: the Hon. Greg Hunt MP, then Parliamentary Secretary to the Minister for Foreign Affairs (June 2007); Professor Marie Bashir, NSW Governor (September 2007); the Hon. Gary Nairn MP, then Special Minister of State (December 2006); Australian Parliamentary Delegation led by the former Speaker, the Hon. David Hawker MP (October 2005); former Minister for the Environment and Heritage, Senator, the Hon. Ian Campbell, (June 2005); former Minister for Defence, Senator, the Hon. Robert Hill (November 2003); former Minister of Communications, Information Technology and the Arts the Hon. Richard Alston (October 2002); former Minister for Agriculture, Fisheries and Forestry, The Hon. Warren Truss MP (June 2002); former Minister for Immigration and Multicultural and Indigenous Affairs and Minister Assisting the Prime Minister for Reconciliation, the Hon. Philip Ruddock MP (April 2002); former Foreign Minister, the Hon. Alexander Downer MP and the Hon. Philip Ruddock (January 2001); former Minister for the Environment, Senator, the Hon. Robert Hill visited Malmö (2000).

Australia has an Embassy in Stockholm. Sweden has an Embassy in Canberra as well as a Consulate-General in Sydney, as well as Consulates in Adelaide, Brisbane, Cairns, Darwin, Hobart, Melbourne and Perth.

Bilateral economic and trade relationship

In 2007, Australia's two way merchandise trade with Sweden totalled A$2.6 billion (ranked 27th).

Australian exports to Sweden were A$348 million. These included coal (A$149 million) and wine (A$42 million). Imports from Sweden in 2007 totalled A$2.3 billion and included medicaments (A$344 million), passenger vehicles (A$200 million) and telecommunications equipment (A$165 million).

Approximately 30,000 Swedish tourists visit Australia each year.

Export opportunities

The high-quality infrastructure and a favourable attitude towards inward investments attract investors to Sweden. The high taxation regime and the rigid labour market are among the less attractive features of the Swedish business environment.

Biotechnology

In Sweden there is currently a focus on new technologies, specifically in the areas of: genomics; bioinformatics; and nano-biotechnology. Specialist biotech sub-sectors include: applied microbiology; immunology; endocrinology; diabetes/metabolism; infectious diseases; neuroscience; oncology; biochemistry; and molecular biology.

With approximately 250 biotech companies, Sweden is the fourth largest biotech market in Europe, and has the highest number of biotech companies per capita in the world. Sixty per cent of Scandinavia's biotech/pharmaceutical industry is located in the Oresund region (Eastern Denmark and Southern Sweden).

Swedish biotech companies are active in many sub-sectors of the industry, with most activity in the areas of pharmaceuticals and medicines, biotech supplies and bioproduction. There is also an acknowledged shortage of quality science-trained individuals, and management expertise, across all biotech areas.

Environment

Sweden is one of the leading countries in the world regarding the introduction of new environment technologies. For example Sweden has announced that by 2020 it intends to be the first country in the world to break its dependence on oil. As such there are opportunities for innovative environment products in the following sectors:

Fashion and Design

Scandinavia is a competitive market in terms of fashion and design, and consumers are highly fashion and brand conscious. There is an increasingly homogenous retail environment in Scandinavia, with smaller, independent retailers being pushed out of business, and large retailers have begun to consolidate in order to ensure their dominance of the industry. There is also an increasing price competitiveness and convenience shopping through discount outlet retail channels. On-line retail is growing.

However, looming mass-market product fatigue and growing Australian fashion awareness open windows of opportunities for clothing and accessories with points of difference that are perceived as competitive edges and with strong brand identities. Among specific product or style opportunities can be mentioned: edgy, well-branded clothing, trendy accessories including jewellery and bags, children's wear and gear, and functional, stylish household/interior products. Environmental aspects are growing in importance, also ethical aspects. Interest in and demand for sun protective wear and gear is increasing. There are two main buying seasons: spring/summer in July to October and fall/winter in January to March.

Interest in and demand for Australian labels is growing in Scandinavia, 60-plus Australian fashion and design brands are now present in the market, with 45 of these having entered the market since 2004.

Wine

Australia now enjoys the largest market share in the Government controlled wine monopoly ‘Systembolaget’. Australian wines are sold at all price levels, though consumers in Sweden are very price driven. ‘Bag in box’ and tetra packaging containers continue to be popular, with sixty percent of all retail sales (in volume) in this type of packaging.

While Sweden is a competitive market to enter with long lead times for orders, there are still opportunities for new entrants. Although there is no formal requirement, normally a winery will be well established in order to secure ongoing tenders with the state monopoly. Currently there is a trend towards cool climate Australian wines, unusual blends and ecologically produced wines. There are limited opportunities for the on-premise market and this is generally a difficult market for new entrants to penetrate.

Education Services

Scandinavia is one of the top performing student recruitment markets for Australia in Europe. An Austrade/Australia Education International (AEI) agreement is in place to support growth in this sector. If not already involved in the Scandinavian market, education institutions would do well to establish and cultivate links with agents and Swedish institutions and especially visit the market regularly and participate in AEI/Austrade recommended fairs.

Trade Successes

In 2007 Australia overtook Spain and Italy to be the leading supplier of wine to the state-run monopoly ‘Systembolaget’.

Last updated: 12/08/2008