COUNTRIES LIKE NORWAY,SWEDEN & DENMARK HAVE RECENTLY TOPPED VARIOUS GLOBAL RANKINGS LIKE GENDER EQUALITY, PRESS FREEDOM & ANTI-CORRUPTION INDEX. HERE'S HOW.
Before we further delve into the topic, its important to know which countries are considered Nordic:
NORDIC NATIONS
COMMON ECONOMIC STRUCTURE:
These nations have embraced globalisation & are also heavily socialist countries. These are 2 concepts which are considered by many as polar opposites but the Nordic nations have fused these elements together very well.
All these nations have good quantum of natural resources. The “vast natural resources” consist mainly of wood (Finland),iron ore(Sweden),oil(Norway) and geothermic energy (Iceland). Denmark has little to speak of natural resources.
Strong socialist elements like regular pension, free education, free healthcare & unemployment allowance have allowed destructive capitalism to flourish & generate good economic dividend.
FEATURES OF SOCIALIST ECONOMY
In order to raise a lot of income tax revenue, income tax rates in these nations are rather high except for in Norway. Denmark's top marginal effective income tax rate is 60.4 percent. Sweden's is 56.4 percent. Norway's top marginal tax rate is 39 percent.
TAX: MAJOR COMPONENT OF GDP
All the countries have low or negligible corruption & the people have strong confidence in their government.
SURVEY RESULTS OF TRANSPARENCY INTERNATIONAL
All are mixed economies with exports as base of their development.
NORWAY: HOW TO MANAGE YOUR WEALTH
Norway discovered rich oil reserves in its North Sea in 1967.
The oil price boom in the mid-1980's propelled Norwegian economy & it became rich overnight.
However, instead of building savvy infrastructure for tourism (UAE) or distributing wealth amongst the public through heavy subsidies (VENEZUELA), Norway created a sovereign fund.
WHICH STRATEGY WORKED?😉
This fund has secured the future of future generations as it is invested in companies, projects & infrastructure worldwide. CLICK HERE TO VISIT GOVT SITE.
Presently, only 45% of this fund is from oil exports, the rest of it being return on investment.
This has given financial security to the government as this fund can be used less in good times but more in bad times.
Also, only 3% of the fund can be used every year, only for developmental projects.
In 2019, it earned a record USD$ 180 billion.
WHY ARE THEY SO SUCCESSFUL?
These countries are small in size, so scale of economy is small. Hence, changes are easier to implement.
Social security like guaranteed pension & free healthcare and education have lead to good standard of living.
Less corruption= less leakage of wealth from economy= more development.
Good amount of natural resource have given a base for economies to develop upon.
People of these countries are less diverse. So societies are homogeneous. So there are less chances of friction & conflict amongst the people in stark contrast to countries like USA & India.
These countries liberalized their economies at the perfect time in the late 1970's when onset of globalisation began & global trade flourished. This helped them to enjoy fruits of a more open world unlike countries like India which opened their economies too late.
As tax rates are high, public expenditure by government is also on the higher side due to rise in revenue.
FUN FACT
Finland was uncharacteristically a staunch supporter of USSR & leaved no stone unturned to criticize & oppose America. It also enjoyed very good trade relations with Soviet Russia.
I HOPE TODAY'S ARTICLE ENLIGHTENED YOU ABOUT A REMOTE YET FLOURISHING PART OF THE WORLD.
Hei Hei!
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