Olof Palme’s legacy can still be felt in the Swedish society — with its focus on equality and welfare, as well its overall exhortation to always “do the right thing”. But as often seems the case in Swedish policymaking, just as they took progressive taxation too far and collapsed the economy in the early 90’s, they have now taken political correctness on immigration so far that they have become politically incorrect. They are ignoring the large and growing contingent of Swedes who are questioning that policy, shutting them out of the debate.
A parliamentary democracy should offer a big enough tent to allow all groups of reasonable size a voice in the debate, but the traditional main parties of Sweden have taken the unusual collective decision to ignore the anti-immigration voice which has grown to represent more than 25% of the Swedish voters. The justification and intensions were good: openness and equality for all and safeguarding the Swedish open economic model. But anything taken too far can overwhelm, and to survive, all models need to be able to change when facts change.
Sweden has failed miserably on this point and has paid the price through woefully overstretched social and community policing services, housing shortages and even a rise in violent crime: from intimidation to gang activity. The other Nordic countries now talk of “Sweden conditions” as a threat, not as a model of best practice.
Sweden is now in recession and with its small open economy status is extremely sensitive to the global slowdown. This sense of crisis, social and economic, will create a mandate for change.
With its very low rates and unnecessarily large budget surpluses, Sweden is better equipped than most to rehabilitate its model with a massive increase in spending on education, reschooling, apprenticeship, social housing and efforts at true integration. This fiscal spend will drive EURSEK down, strengthening the Swedish Krone. In 2020, Sweden again becomes a leader and a role model, not because it’s politically correct, but because in the end it will “do the right thing” by rehabilitating a model that has broken bad.
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.