Finland's economic growth is almost the weakest in the world - "Why haven't Finns noticed this?" wonders Johnny Åkerholm, who dug up the information
18.3.2021, 12:30 updated 18.3.2021, 12:30
For ten years, Finland's economic growth has been almost the worst in the world.
"Why haven't Finns noticed this?" wonders Johnny Åkerholm , who has dug up grim information from statistics and has had a long career in economics.
Finland ranks 134th in the growth comparison. In 2008–2019, only seven countries out of 141 in the world grew slower than Finland.
“The growth gap with Sweden is as much as 20 percent,” says Åkerholm.
Many newspaper readers lost their morning coffee on Tuesday when Sixten Korkman wrote about Finland's dismal economic growth in Helsingin Sanomat.
Korkman based his claim on information from a former civil servant colleague. Korkman and Åkerholm worked together at the Bank of Finland and the Ministry of Finance in the 1990s. Their paths later crossed in Brussels at the turn of the millennium. Before retiring, Åkerholm headed the Nordic Investment Bank (NIB) in Helsinki.
Now Åkerholm answers the phone from Tahko in Northern Savo.
"I began to wonder that even though Finland's ranking in the competitiveness comparison dropped, Finland was still among the top ten countries. However, growth has been modest."
Until recently, Finland was the most competitive country in the world in the comparison, but now it ranks 10th.
Irritation prompted Åkerholm to look for economic growth data from, among others, the International Monetary Fund (IMF), the World Bank, and the OECD.
The result of Finland being ranked among the slowest growing countries in the world was a surprise even to the expert himself. In a comparison of Eurozone countries, only Greece and Italy have fared worse.
Welfare financed by debt
There is an obvious reason behind the startling attention.
“Finland's well-being has been financed by running public deficits and household deficits,” Åkerholm says, meaning that Finland has simply lived in debt.
In 2008–2019, the public sector's savings deficit was EUR 40 billion and that of households was EUR 50 billion.
"There has been no growth and companies have not invested. On the contrary, companies have a large savings surplus."
Households and the public sector are getting into debt, but companies' faith in the future seems weak.
Åkerholm has read Finnish investment statistics and compared them with Sweden. In particular, he has examined the development of intangible investments.
"In Sweden, intangible investments account for 28 percent of all investments and are growing. In Finland, they are only 18 percent and on the way down."
An example of intangible investment is when companies invest money in research and development, digitalization, and marketing.
Raw material exports have risen sharply
According to Åkerholm, there is also reason to be concerned about the development of Finland's exports. Goods exports account for approximately 70 percent of total exports. From the perspective of Finland's well-being, the development of the export structure is going in the wrong direction.
“Exports of raw materials have increased by as much as 88 percent,” Åkerholm wonders.
Finland exports, for example, minerals, pulp and cardboard to the world.
"I recently heard the news that sawn timber exports have recovered nicely. So we are happy that we are exporting the same goods as we did 150 years ago."
Is Finland turning into the banana state that was feared in recent years?
"That conclusion is not far off. Growth should now be achieved in areas that are based primarily on expertise."
Why aren't companies investing then? According to Åkerholm, that's something that companies need to be asked.
The state's job, he reminds us, is only to create the conditions for investment. The state, or the government as its representative, has no way of knowing where the next growth sector will be.
However, the rule of thumb is that instead of the state pouring a lot of funds into a specific old investment target, it would be more sensible to invest in general development and promote risk-taking opportunities.
“Finland needs a lot of new companies in fast-growing sectors.”
"The state must rethink its role, otherwise we will soon be driven into a Soviet-style planned economy."
There is still a shortage of venture capital
“One problem in Finland is still that there is far too little venture capital here,” Åkerholm reflects.
Åkerholm is exceptionally familiar with the dynamics of investment, having served as Secretary General of the European Bank for Reconstruction and Development (EBRD) in London in the early 2000s.
The bank lends, capitalizes and grants guarantees for various investment projects.
Unfortunately, politics becomes a stumbling block to sensible decisions.
"Creating investment conditions cannot be achieved in one election period. That means politicians cannot say, 'I did that.'"
Åkerholm praises the report that was just submitted to the government by a working group led by former Nokia CEO Pekka Ala-Pietilä . Its stark conclusion is that research and development investments must be increased.
However, the problem with even excellent reports is that they do not lead to practical implementation.
“We are on a worrying trajectory,” says Åkerholm.
@Demarit @keskusta
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For 7 years in a row, #gullible #Finns have been buying into the #ZionistSupremacy #delusion, that they are the '#HappiestCountry.'
- Meanwhile, the #WEF-#Marxist #GreatReset #revolution has come to fruition, #FinlandFamine.#Finland #GDP Growth Rate 1961-2025 pic.twitter.com/gehGij9lTW
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