Travel

Sweden 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 2008 of 9.2 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 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 parliamentary elections. A centre-right coalition last held government in 1991–94. The 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. The next parliamentary election is due in September 2010.

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. Sweden assumed the revolving six-month EU Presidency on 1 July 2009.

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 as the principal vehicles for promoting and sustaining democracy in Europe. Although not a member of NATO, Sweden acknowledges the key role NATO plays in European Security and participates in NATO through the Partnership for Peace Program. Sweden has had personnel deployed to the International Security Assistance Force since 2001 and Afghanistan is one of the largest recipients of Swedish development assistance.

Foreign policy reflects a commitment to exploring avenues of closer cooperation in the security and defence mechanisms of 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

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.

The global financial and economic crisis has had a significant impact on Sweden’s open and trade-oriented economy. During the second quarter of 2009, Swedish goods exports declined by 23 per cent compared to the same quarter last year. This has led to over 100,000 job losses during the last 12 months, with unemployment growing from 5.9 to 8.3 per cent (source: Swedish National Institute of Economic Research). In 2010, growth in exports will pick up, and with fiscal policy still expansionary, household consumption will accelerate. GDP growth fell from 2.7 per cent in 2007 to –0.5 per cent in 2008 and is forecast to be –5.0 per cent in 2009 and 1.5 percent in 2010.

Bilateral Relationship

The bilateral relationship between Australia and Sweden is strong, particularly in the areas of trade and education services. Sweden, like Australia, is an active member of the UN, a strong advocate of free trade, and a significant contributor to international development assistance. 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 have included: a parliamentary delegation from the Riksdag Committee on Civil Affairs (August–September 2008); Minister for Employment, Sven Otto Littorin, and Minister for Social Security, Cristina Husmark Pehrsson (February 2008); Prime Minister Göran Persson (February 2005); and HM King Carl XVI Gustaf and HM Queen Silvia (September 2000).

The Minister for Foreign Affairs, the Hon Stephen Smith MP, visited Sweden on 7 and 8 October 2009, where he represented Australia at Ministerial-level consultations with Sweden as holder of the Presidency of the European Union, and met bilaterally with Defence Minister Tolgfors, International Development Cooperation Minister Carlsson and Minister for Enterprise and Energy and Deputy Prime Minister Maud Olofsson. During the visit Mr Smith signed a Memorandum of Understanding formalising Sweden’s Foundation Membership of the Global Carbon Capture Storage Institute, and announced a contribution of $500,000 per annum for three years to the Stockholm-based International Institute for Democracy and Electoral Assistance to strengthen political governance in developing countries, including in the Asia-Pacific region.

There have been numerous other high level visits by Australians in recent years including: the Hon Greg Hunt MP, then Parliamentary Secretary to the Minister for Foreign Affairs (June 2007); HE 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 MP (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 (January 2001 and April 2002); former Foreign Minister, the Hon Alexander Downer MP (January 2001); and 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 and Consulates in Adelaide, Brisbane, Cairns, Darwin, Hobart, Melbourne and Perth.

Bilateral economic and trade relationship

In 2008–2009, Australia's two way merchandise trade with Sweden totalled A$3 billion (ranked 26th). Australian merchandise exports to Sweden totalled A$566 million. These included coal (A$358 million) and alcoholic beverages (A$39 million). Imports from Sweden totalled A$2.4 billion and included medicaments (A$385 million) and telecommunications equipment and parts (A$158 million).

Australia is a growing market for Swedish foreign direct investment (FDI), which was worth A$3 billion in 2008. Australian FDI in Sweden is also significant and amounted to A$2.1 billion in 2008. The main FDI business sectors are pharmaceuticals and chemicals, machinery and equipment, banking and finance, and energy.

Approximately 30,000 Swedish tourists visit Australia each year. The total value of services export, including education, was $325 million in 2008.

Australia has an Austrade office in Stockholm. Sweden has a Swedish Trade Council office in Sydney.

Export opportunities

Sweden’s sophisticated infrastructure and its favourable attitude towards inward investments attract investors. The high taxation regime and the rigid labour market are among the less attractive features of the Swedish business environment. High levels of innovation as well as early adoption of technological advancements are strong drivers for market demand and opportunities for business and collaboration.

Financial Services

The financial services sector is a strategic growth sector in Sweden with key strengths in retail and private banking, fund management, insurance, and financial IT. Swedes are among the world’s most avid users of online banking services.

Environment, Energy and Green Building

Sweden provides an environment ideally suited for the development and testing of innovative clean technology. In Sweden there is a focus on energy efficiency and alternative energy resources and the Swedish government is driving these developments. There are opportunities across a broad range of sectors. Opportunities exist in:

Wine

Australia current ranks third in exporting wine to the Government controlled wine monopoly ‘Systembolaget’. Australian wines are sold at all price levels, though consumers in Sweden are relatively price driven. ‘Bag in box’ and tetra packaging containers continue to be popular, with sixty per cent of all retail sales (in volume) in this type of packaging. Over the past decade wine consumption has grown steadily in all price brackets.

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. Swedish students are eligible for government grants and loans for higher education studies overseas. In 2008 there were 1,853 Swedish students enrolled in tertiary institutions in Australia.

Technical Textiles

Technical textiles and textiles for industrial use are expanding sectors in Sweden. Sweden has a solid foundation of development and production of technical textiles and an aggressive interdisciplinary experimental textile and design research. Nearly half of Sweden’s textile production is in technical textiles.

Geotextiles, fabrics for airbags and the automotive industry, felts and fabrics for use in paper and pulp production, hygiene articles, parachutes, filters for air and liquid purification, and sails are some examples in this innovative branch. Sweden is also a world-leading producer of fabrics for greenhouses (sources: Smart Textiles, the Swedish Clothing and Textiles Industries Association).

In June 2009 a delegation of representatives of Australia’s research, development and production of technical textiles were the featured guests at the annual Next Textile Boras event in Sweden.

Trade Successes

Last year a number of Australian IT and service companies were successful with tenders to the Swedish Government. Using an established local partner to provide after sales support or even establishing offices in-market was important to their success.

Trade Watch Contacts

If you would like more information on the trade and economic conditions in Sweden, please e-mail the Department of Foreign Affairs and Trade.

Updated 9 November 2009