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2. Domestic trade

Sweden has well-developed distribution and marketing systems. The cities of Stockholm, Goteborg, and Malmo are the principal merchandising centers and ports of entry. Residing mainly in the southern third of the country, most of the population is well served by a rapid and efficient transportation network.

The greater part of all wholesale and retail trade is carried out through private channels. The share of state enterprises is confined to the liquor and raw tobacco monopolies. Cooperatives, which account for about 10% of all retail stores, account for about one-sixth of total retail sales. Although chain stores are increasing in importance, the most common type of retailer is, by far, the independent shopkeeper. Because of the greater mobility resulting from the increase in the ownership of automobiles, the trend has been toward fewer, but larger stores.

E. International economic relations

The Swedish economy has benefited substantially from large-scale industrialization and specialization made possible by its ready access to foreign markets. The country's foreign trade turnover is equal to nearly half of its GNP; basically, it exports semimanufactured and highly specialized manufactured goods and imports raw materials and components. By specializing in production of goods embodying high quality, advanced technology, and unique design. Sweden is able to compete successfully in world markets despite its relatively high wage costs. Indeed, exports have expended more rapidly than domestic production over the past decade and presently absorb about half of the country's industrial output. Sweden's liberal trade policy has facilitated an equivalent growth of imports. Generally, annual imports exceed exports, and the resulting trade deficits are financed largely by earnings from shipping and inflows of long-term capital. (U/OU)

1. Foreign trade (U/OU)

Traditionally, Sweden's exports consisted primarily of crude materials and products derived directly from its natural resources — notably, its forests and iron ore. Since World War II, however, there has been a significant shift away from crude materials and basic products toward more highly processed exports. Although wood, woodpulp, and paper products, as well as iron ore and concentrates, remain significant export items, machinery and transportation equipment accounted for 42% of total export earnings in 1971, compared with 32% a decade earlier (Figure 17). Manufactured products comprise almost 78% of total exports.

The structure of imports also has changed markedly. As Sweden's highly specialized trade in industrial components developed, the share of foodstuffs, crude materials, and mineral fuels in total imports fell from 34% in 1961 to 27% in 1971. At the same time, there was an increase in demand for imported capital goods and manufactured consumer items. Substantial quantities of metalworking machinery and electric power equipment were needed in connection with industrial expansion, and increasing amounts of photographic supplies, musical instruments, sound equipment, sporting goods, and toys were imported to satisfy burgeoning demand stimulated by rising consumer incomes. The most important imports and exports in 1971, as percentages of total imports and exports, respectively, are shown in the following tabulation:

Sweden's rapid industrial growth since 1960 has been sustained by a strong West European demand for Sweden's industrial raw materials and manufactures. The countries of the European Communities (EC) and the European Free Trade Association (EFTA) together took over 72% of Sweden's total exports in 1971 (Figure 18). The United Kingdom and West Germany are Sweden's most important export markets, especially for wood, pulp, paper products, metals, and metal products. The British and West German shares in the Swedish export market have been declining, however, from 16% in each case in 1960 to 14% and

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