InFocus | Finland
Caring for the environment
Finland is not only one of the most competitive economies in the world, it also leads 146 countries in environmental sustainability
- By Esha Nag, Senior Feature Writer
- Published: 23:46 December 5, 2008
- Image Credit: Shutterstock
Finland has been ranked the sixth most competitive economy in the world in 2008 by the World Economic Forum. Known as a land of forests, metals and mobile phones, Finland has always been at the forefront of development. The forests have formed the foundation of the Finnish economy (70 per cent of the land area of Finland is covered by productive forest), and the country is one of the world's leading exporters of paper and cardboard.
The other cornerstone of the Finnish economy is the metal industry. The country is known for ship building, especially the construction of specialised vessels such as icebreakers, luxury cruise ships and gas tankers. Finland has also been successful in the technology sector. Nokia, the country's largest registered company, is also the world's leading manufacturer of mobile phones.
Finland's production structure has diversified and moved into areas of high technological development. This has been supported by good education, research and innovative systems.
Finland is the least populated country in the EU. Almost 2.5 million people in Finland are unmarried and just under two million married.
Families without children are becoming common. Standards of education and intellectual activity are high. Primary
and secondary education is compulsory for every Finnish citizen, and almost everyone goes through the nine years
of comprehensive school.
The Finns love to celebrate the Midsummer festival of light with bonfires on the shores. They also celebrate the arrival of spring on May 1.
It coincides with the student festivities that begin in Helsinki the previous afternoon. Finland's cultural activities are firmly
grounded in a strong sense of national and cultural identity. The country has a comprehensive network of cultural institutions, especially libraries, and a tradition of active public participation. Professional theatre is encouraged and some of the important music festivals include the Helsinki Festival, the Kuhmo Chamber Music Festival and the Pori Jazz Festival.
Of the popular team sports, the Finns have fared best in ice hockey. The Finnish sauna is an important part of the culture with more than two million saunas in Finland.
Advances in agriculture
The country has an abundance of renewable natural resources and the Ministry of Agriculture and Forestry steers the policy on sustainable use of natural resources. According to recent plans, lands that are no longer needed for food and feed production will be used for cultivating reed canary grass for heat plants, and turnip rape and cereals for the production of biofuel for transportation.
In the environmental sector, Finland's achievements and expertise are internationally acknowledged. Since 2000 it has been ranked No 1 among 146 countries in environmental sustainability and performance.
Its environmental research activities have contributed to the success of Finnish environmental business. Matto Ruuskanen, Commercial Counsellor, FINPRO Middle East (the commercial arm of the Embassy) said, "Companies such as Cleantech Finland are developing innovative technologies for a cleaner environment. Finland encourages the use of public transport and has introduced tax advantages for low-emission cars." In spite of the global economic downturn, Finland's economy is still robust.
This is chiefly attributed to strong growth during the early part of the year in industry, construction and domestic trade. Economist Maarit Lindstrom at the Central Chamber of Commerce of Finland sums up Finland's economic climate as "relatively good". He said, "There has only
been a mild impact of the global financial turmoil on the Finnish financial and real estate sector.
Domestic demand is still rock solid, economic stability and public finances are firm and financial positions of companies are good."
According to the September 2008 Economic Survey, published by Finland's Ministry of Finance, the employment situation remains favourable. The employment rate in 2008 will edge up to 70.6 per cent and the unemployment rate will fall back to 6.2 per cent.
However, inflation has been a concern, rising to 4.7 per cent in August. The sharp jump reflects high energy prices and higher rents and interest rates.
The Bank of Finland, however, expects inflation to fall back to 2.2 per cent in 2009. Being a small country, Finland is highly dependent on foreign trade. About 40 per cent of the goods and services produced in Finland are exported. In 2007 Germany was Finland's main export country and Russia reclaimed its leading position among Finland's import countries. Machinery, metals and products of the forest industry have traditionally occupied a substantial share of Finland's exports.
According to information from FINPRO, Finland's top-ten exports in 2007 were telecommunication and sound recording equipment, paper and paperboard, iron and steel, machinery for special industries, petroleum and products, electric machinery, road vehicles, non-ferrous metals and power-generating machinery and equipment. The country's top-ten imports in 2007 included petroleum and products, iron and steel, office machines, medicinal and pharmaceutical products and road vehicles.
Ready for challenges
Reports from Finland's Ministry of Finance also predict that investment will grow by about four per cent in 2008, as corporate investments in both buildings and machinery and equipment continue to remain strong. Investment in residential construction will, however, decrease in 2008 and 2009. Concerns in the immediate economic situation include the overheating of the housing markets and the ageing population. But as Pekkarinen assured, Finland is "ready
to take on the challenges".
The key areas of emphasis in the budget proposal for 2009 are to create more incentives for people to work; to ensure access to skilled labour; to develop a caring system of social security and energy and climate. In addition tax rates will also be revised, with pensioners' taxes adjusted accordingly.
Other tax reforms include lowering the VAT rate on food to 12 per cent as of October 1, 2009 and partial and temporary tax exemption on revenue from timber sales.
