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Sweden country brief

Introduction

Sweden is the fifth largest country by area in Europe (449,964 square kilometres) with a population of 9.6 million (est Nov 2013). The capital of Sweden is Stockholm. Sweden celebrates its National Day on 6 June.

Political overview

System of Government

Sweden is a constitutional monarchy and has a parliamentary system of Government. King Carl XVI Gustaf exercises only ceremonial functions as Head of State. Executive power rests with the Cabinet, which is responsible to the unicameral Parliament (Riksdag) comprising 349 members who are directly elected every four years on a proportional basis. Voting is not compulsory but turnout is usually over 80 per cent.

Political developments

The centre-right Alliance (formerly known as the Alliance for Sweden), a coalition comprising the Moderate Party, Centre Party, Liberal Party and Christian Democrats, was returned to power on 19 September 2010 under Prime Minister Fredrik Reinfeldt. The Alliance gained 173 seats out of 349 (two short of a majority). Ordinary general elections to the Swedish Parliament are held every fourth year on the third Sunday in September. The next parliamentary elections will be held on 14 September 2014.

Foreign policy

Sweden joined the EU in 1995, following a referendum in which a narrow 52 per cent of electors voted in favour. However, in a referendum in September 2003 the Swedes rejected joining the eurozone by 56 per cent.

Sweden's key areas of foreign policy focus are development assistance, conflict prevention, peacekeeping, the environment, refugees and trade policy. An active commitment to the United Nations has been a corner-stone of Sweden's foreign policy since it became a member in 1946. Sweden has a long-held policy of non-participation in military alliances, although its security doctrine was revised to allow cooperation with other countries to "secure regional and international peace and security." Sweden became a NATO Partner for Peace in 1994 and has had personnel deployed to the International Security Assistance Force to Afghanistan (ISAF) since 2001. Nordic-Baltic cooperation is an important aspect of Sweden's foreign policy.

Economic overview

The Swedish economy is heavily dependent on a highly developed and internationally successful industrial sector, which was established in the early part of the 20th century through companies such as Ericsson, Asea, Astra, Alfa Laval, SKF, Electrolux, Volvo and SAAB, and now includes more recently established companies such as H&M and IKEA. However, many of the flagship companies are now totally or partially owned by foreign companies and shareholders. There have been several structural reforms since Sweden became a member of the EU, such as the deregulation of the telecommunications, energy and air traffic sectors.

Sweden's steady economy was affected by the global financial and economic crises in 2008, with its GDP real growth rate hitting a low of -5.1 per cent in 2009. However, the economy bounced back quickly with 5.5 per cent growth in 2010. The economy has slowed again since then, with just just 1.5 per cent recorded in 2013, however, the IMF forecasts this will pick up gradually, rising to 2.3 per cent in 2014, where it is predicted to stabilise. Unemployment was at 82 per cent in 2014 and is predicted to fall slightly in the coming year.

Bilateral relationship

The bilateral relationship between Australia and Sweden is strong, particularly in the areas of trade and education services. Sweden, like Australia, is an active member of the UN, a strong advocate for free trade, and a significant contributor to international development assistance. The 2011 census recorded 34 029 people in Australia of Swedish ancestry. Around 1 500 Swedish students study in Australia each year, and Australian students are also studying in Sweden.

The bilateral relationship is underpinned by a Double Taxation Agreement (1981) and a Working Holiday Maker Arrangement (in effect since 2001).

Australia has an Embassy in Stockholm. Sweden has an Embassy in Canberra as well as a Consulate-General in Sydney and Consulates in Adelaide, Brisbane, Cairns, Darwin, Hobart, Melbourne and Perth.

Recent visits

Sweden's Minister for Foreign Affairs, Mr Carl Bildt, visited Australia in March 2013. Sweden's State Secretary for Trade, Mr Gunnar Oom, visited Australia in March 2012 with a concurrent visit by the Swedish Parliament's Committee on the Constitution.

In February 2013, former Minister for Defence, Mr Stephen Smith, and Chief of the Defence Force, General David Hurley, visited Stockholm for discussions with Sweden's Minister for Defence, Ms Karin Enstrom. Former Minister for Foreign Affairs, Mr Kevin Rudd, visited Sweden in May 2011 for the UN High-level Panel on Global Sustainability, where he met with HM King Carl XVI Gustaf, Foreign Minister Carl Bildt and Mr Vidar Helgesen, Secretary-General of the International Institute for Democracy and Electoral Assistance (IDEA).

Bilateral economic and trade relationship

In 2012, Australia's two way merchandise trade with Sweden totalled A$2.77 billion, overwhelmingly in Sweden's favour. Australian merchandise exports to Sweden totalled A$345 million and included coal (A$205 million), alcoholic beverages (A$28 million) and copper ores and concentrates (A$25 million). Imports from Sweden totalled A$2.4 billion and included medicaments (A$351 million), vehicle parts and accessories (A$184 million) and civil engineering equipment and parts (A$176 million).

Australia is a growing market for Swedish foreign direct investment (FDI), which was worth A$3.3 billion in 2012. Australian FDI in Sweden is also significant and amounted to almost A$5.2 billion in 2012. The main FDI business sectors are pharmaceuticals and chemicals, machinery and equipment, banking and finance, and energy.

Approximately 30 000 Swedish tourists visit Australia each year. The total value of services exports, including education, was A$243 million in 2012.

Australia has an Austrade office in Stockholm. Sweden has a Swedish Trade Council office in Sydney.

For information on doing business in Sweden, please see Austrade’s website.

Updated April 2014