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Finland needs to increase work-related immigration in the future to help maintain a sufficient number of people in working life. In the picture, a group of Thai berry workers visiting the Parliament House in September 2013. Picture: Tony Öhberg for Finland Today
The outlook of the public economy is weak. Finland’s debt has doubled since the global finance crisis started in 2008: from about fifty billion euros to a hundred – and the debt is increasing.
The closing of factories in the electronic and wood industries and the declining demand for paper have sank its claws to the soil of the land of thousand(s) lakes (187,888 to be exact).
When talking about declining exports, we will always remember (or someone will alway bring up) the loss of Nokia in a world which is increasingly being shaped by smartphones.
The economy of the neighbouring Russia is not booming either, which makes the trade more difficult, and its involvement in the crisis of Ukraine surely doesn’t help, which – as it seems – will be prolonged to somewhere between space and time.
What could be done? One way is to turn our heads to Sweden, which is exactly what Alexander Stubb, the prime minister, did.
“Sweden has survived the economic crisis better than us. Sweden’s employment rate is a few per cent higher than in Finland. We might even learn something from our neighbour,” Stubb writes in the preface of a 50-page analysis on Finnish economy published today.
“Bold structural reforms must continue, precisely as Borg and Vartiainen suggest. The proposals of the report must be taken seriously, especially for the purpose of improving employment,” Stubb said.
The report, ordered by Stubb in October 2014 to combat the rickety economy, is conducted by Anders Borg, the former Swedish minister of finance, which he constructed together with Juhana Vartiainen, the director general of VATT Institute for Economic Research in Finland.
“Bold structural reforms must continue, precisely as Borg and Vartiainen suggest. The proposals of the report must be taken seriously, especially for the purpose of improving employment,” Stubb said.
Here are 10 key points from the Borg-report to battle the economic downfall.
[divider]Borg’s Medicine[/divider]
1. The raise in salaries must correspond with the level of productivity. Salaries and the vacancies in the export industry are among the key factors.
2. In order to secure the jobs in the export industry, the formation of the salaries must meet the demands of the surrounding world in relative to its competitiveness.
3. On the other hand, if the amount of vacancies in the exports would be reduced, it would weaken the common level of salaries because the growth provided by the export industry offers more playground to raise salaries in general.
4. The rate of employment must be raised. In Finland, the rate is somewhat lower when comparing with some other countries especially among the elderly. If the participation rate in working life could be increased, the steady income from taxes would be strengthed and the pressure on expenses would be reduced in long-term.
[alert type=blue ]5. Population in working life can be increased for example with increasing work-related immigration.[/alert]
6. A healthy growth in production is necessary to return the competitiveness.
7. Increasing productivity in long-term requires highly educated and qualified personnel.
8. A positive atmosphere among the entrepreneurs lays the foundation for companies of fast growth, who want and are able to hire employees.
9. A well-functioning infrastructure and ways of transport are necessary requirements for increasing productivity.
10. Finland needs to aim for raising productivity levels higher than in the competitor countries such as Sweden and Germany – for years to come.
