Flag of Sweden

Sweden country brief

Introduction

Sweden is the fifth largest country by area in Europe (449,964 square kilometres) with a population of 9.5 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, Centre Party, Liberal Party and Christian Democrats, was returned to power on 19 September 2010 under Prime Minister Fredrik Reinfeldt. The Alliance gained 173 seats out of 349 (two short of a majority). This is the first time a centre-right government has been re-elected in Sweden. Ordinary general elections to the Swedish Parliament are held every fourth year on the third Sunday in September.

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 eurozone by 56 per cent. Sweden held the revolving six-month EU Presidency from 1 July to 31 December 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 Organization 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.

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

Real GDP growth moderated to 1.2 per cent in 2012. This is forecast to pick up gradually in 2013 to 1.8 per cent. Average inflation fell from 3 per cent (national measure) in 2011 to 0.9 per cent in 2012, and is forecast at 0.6 per cent in 2013.  Unemployment rose slightly to 8.8 per cent in March 2013. 

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. The 2011 census recorded 34,029 people in Australia of Swedish ancestry. A significant number of Swedish students are studying in Australia, and 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 also has a Double Taxation Agreement with Sweden.

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.

Recent visits

Sweden’s Minister for Foreign Affairs, Mr Carl Bildt, visited Australia in March 2013 (the first visit to Australia by a Swedish Foreign Minister since 1985). Mr Bildt met with Foreign Minister Senator Bob Carr as well as delivering a lecture at the ANU and leading a roundtable discussion at the Australian Strategic Policy Institute. Mr Bildt’s visit included Perth, where he viewed mining operations, and Sydney, where he met with members of the Swedish-Australian business community and held a roundtable discussion at the Lowy Institute.

Sweden’s State Secretary for Trade, Mr Gunnar Oom, visited Australia in March 2012. Mr Oom’s visit focused on clean energy, defence materiel, mining and trade policy. He spoke at the Energising Smart Cities forum in Sydney, organised by the Swedish Trade Council. A concurrent visit to Australia was made by the Swedish Parliament’s Committee of the Constitution. In April 2012, the Australian Chief of the Defence Force, General David Hurley, visited Stockholm.

Then Minister for Foreign Affairs and Trade, the Hon Kevin Rudd, visited Sweden on 18 May 2011 for the UN High-level Panel on Global Sustainability, where The Stockholm Memorandum was signed by Nobel Laureates and presented to the Panel. During his visit Mr Rudd met with Swedish Foreign Minister Carl Bildt, HM King Carl XVI Gustaf and Mr Vidar Helgesen, Secretary-General of the International Institute for Democracy and Electoral Assistance (IDEA). Mr Rudd delivered a key note speech on the ‘Global Implications of the Asia Pacific Century’ in association with the Stockholm International Peace Research Institute (SIPRI) and IDEA.

Other visits have included: then State Secretary for Trade, Mr Gunnar Wieslander (June 2010); Shadow Minister for Foreign Affairs, Mr Urban Ahlin (March 2010); a parliamentary delegation from the Riksdag Committee on Civil Affairs (August–September 2008); then Minister for Employment, Sven Otto Littorin, and then Minister for Social Security, Cristina Husmark Pehrsson (February 2008); then Prime Minister Göran Persson (February 2005); HM King Carl XVI Gustaf and HM Queen Silvia (November 2005 and September 2000) and Crown Princess Victoria (March 2005).

Bilateral economic and trade relationship

In 2011-12, Australia's two way merchandise trade with Sweden totalled A$2.9 billion. Australian merchandise exports to Sweden totalled A$388 million and included coal (A$246 million) and alcoholic beverages (A$31 million). Imports from Sweden totalled A$2.5 billion and included medicaments (A$347 million) and civil engineering equipment and parts (A$205 million).

Australia is a growing market for Swedish foreign direct investment (FDI), which was worth A$3.3 billion in 2011. Australian FDI in Sweden is also significant and amounted to A$4.1 billion in 2011. 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 exports, including education, was A$265 million in 2011-12.

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

For information on doing business in Sweden, please see Austrade’s website.

Updated June 2013