Page:CIA-RDP01-00707R000200090018-7.pdf/31

 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090018-7

one-third of total gross investment in construction and building (value in millions of U.S. dollars):

Rationalization of the industry has progressed steadily since World War II; work has been scheduled during winter months (thus promoting year-round employment and increasing labor's efficiency); methods and procedures on job sites have been improved, and structural members have been prefabricated in factories. As a result, the man-hours required to produce a cubic meter of building space have been halved since the mid-1950's. Further increases in worker productivity are expected to compensate for a scheduled reduction of the workweek from 43.5 hours to 40 hours, to occur in two stages in 1971 and 1973.

C. Economic policy (U/OU)

Sweden has a long tradition of governmental intervention in the economy through comprehensive social welfare programs, control of natural resources, and strict licensing requirements for business activities. The concept of contracyclical compensatory fiscal policy was adopted in the late 1930's, and since 1948 governments budgeting has taken account of an annual report providing background information on the course of the economy. In the postwar period, expansion of government activity and intervention in the economies of many Western European countries has been such that Sweden no longer differs markedly from the European norm in this respect; however, the actions that the Swedish Government takes to influence the course of the economy go beyond those ordinarily taken by the U.S. Government.

The Swedish Government's success in formulating and implementing economic policies results in part from a long history of working together with the private sector in pursuit of common goals. The national federations of employees, trade unions, and other occupational groups engage in extensive consultation and discussion with the government concerning broad economic policy, and a number of these organizations have assumed administrative or regulatory functions performed in other countries by government agencies. Thus, labor unions help to administer the unemployment insurance program, and trade associations control the entry of new enterprises into some fields of business. Although the government does not participate directly in periodic wage negotiations, it attempts, mainly through persuasion, to bring about noninflationary wage settlements.

Government influence on the economy is exerted primarily through conventional fiscal and monetary policy, as well as by regulation of investment in housing, of National Pension Insurance Fund (social security system) operations, and of domestic and international capital-market transactions. In addition, the various levels of government were directly engaged in a broad range of economic activities. More than half of electric power production, and almost all railroad transportation, local bus and streetcar service, and communications facilities are in public hands. Although 91% of all commercial and industrial enterprises are in private hands, the government owns and operates large firms in the key industries of forestry, iron ore mining, and steel production, as well as one of Sweden's largest commercial banks (Figure 13).

The central government provides about 24% of municipal income and strongly influences many local financial decisions even though the local authorities exercise a high degree of independence. Roughly half of Central Government support to local governments consists of grants-in-aid for certain social expenditures, primarily for education. The central authorities also exert economic pressure on their local counterparts through control of municipal bond issues and use of standby powers to impose taxation on non priority building.

Sweden desires to continue developing its economy on the basis of optimum utilization of indigenous resources. In consequence, immigration is tightly

24

APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090018-7