Page:NATIONAL INTELLIGENCE SURVEY 11; SWEDEN-CIA-RDP01-00707R000200090017-8.pdf/11

 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090017-8

Economic Achievement: The Middle Way

Although none of the Nordic states are particularly blessed with natural resources, rich iron ore deposits, abundant swift rivers, and extensive forests make Sweden the best endowed. And the efficient exploitation of these resources has enabled Sweden to become the largest producer of iron ore, the 10th-ranking producer of electricity, and one of the leading producers of timber-based products in the world. A concurrent development of an advanced technology in other areas has also enabled Sweden to produce highly sophisticated, competitive manufactures for the world market.

To a point it could be said of Sweden, as of its sister Scandinavian countries, that its labor force is its most valuable resource. This has been especially true of the imaginative scientists, engineers, technicians, and businessmen who have so skillfully exploited the country's few resources. There are signs, however, that the domestic policy of the governing Social Democrats—in office now for 40 years—may finally be having some adverse effect on competitive capacity and on individual productivity. With Swedish wages, on the average, almost 50% higher than those prevailing in the Common Market countries, even highly rationalized Swedish industry is beginning to be at a disadvantage. And Prime Minister Olof Palme's drive for class equality by leveling incomes via the tax and wage structures is having a belated impact on incentive, lingering elements of the Protestant ethnic notwithstanding.

The very paucity of some resources in Sweden, notably coal and petroleum, may have had a net constructive social impact. With the belated arrival of the Industrial Revolution, the new factories had to disperse along the rivers where waterpower was available. Such smaller industrial communities are still today very much a part of the settlement pattern and have helped Sweden avoid the worst ills of mass urbanization as well as environmental pollution. The town planners, for which the country is famous, could go about their work at a more measured pace, resulting in such model urban redevelopment and suburban expansion as that in the Stockholm, Goteborg, and Malmo areas.

Critics of contemporary Swedish life point out that the orderly urban area development has an almost antiseptic quality. The spic and span clusters of tall buildings with their small two- and three-room rented dwelling units seem strangely out of place in spacious, underpopulated, materialist (private possession-oriented) Sweden. Most Swedes, however, still seem ready to make such adjustments to the long, cold winters, the high cost of heating fuels, and the practical requirements of providing ample housing for the whole population. Although there may be a connection between the increased incidence of psychosis and the "drabness" and confinement of

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090017-8