Economy

In the mid-19th century the Swedish economy was largely based on agriculture, and Sweden was one of the poorest countries in Europe. Beginning in the 1870's, the country underwent rapid industrialization, which was made possible by Sweden's abundance of two industrially important natural resources, iron ore and timber. Today Sweden is a major manufacturing nation. Its farmers, although using only a tenth of the country's land, manage to provide most of the food supply.

Few nations have reached the economic level enjoyed in Sweden. Personal incomes and the standard of living are among the highest in the world. Poverty and slums are virtually nonexistent.

Sweden has a mixed economy, with elements of both socialism and the private-enterprise system. Most companies are privately owned. The government, however, has an important role in regulating business and industrial activity. In addition, railways, postal and telecommunications services, and most electric utilities are state-owned. Government policies are designed mainly to insure steady economic growth and to provide for the security of every citizen through an extensive social welfare system.

As have many other older industrialized nations, Sweden has been faced with the task of modernizing many of its manufacturing facilities and techniques. Since the mid-1970's, the government has become increasingly involved in revitalizing older manufacturing enterprises. Shipbuilding and the making of steel and textiles are among the large industries with significant levels of government involvement.

The engineering industries are of major importance. They turn out a vast array of products, including automobiles, trucks, aircraft, electrical and communications equipment, and agricultural, mining, and construction machinery. Products such as these account for nearly half of Sweden's exports.

The production of chemicals and chemical products—including pharmaceuticals, explosives, petrochemicals, and fertilizers—is also important.

Sweden's vast forest resources provide the basis for a large wood-processing industry. Forest products such as paper, pulp, and timber account for about one-fifth of Sweden's exports.

Sweden's iron and steel industry, once a mainstay of the economy, has declined in importance since the mid-1970's. The production of raw steel has in large part given way to the production of high-quality finished steel.

Until the late 1970's, shipbuilding was one of Sweden's principal industries, and Swedish-built ships accounted for about a tenth of the world fleet. For many years the Swedish shipbuilding industry concentrated mainly on the production of bulk carriers such as tankers. Today Swedish shipyards have diversified and produce a variety of vessels and equipment, including ferries, offshore oil platforms, and refrigerated ships.

Traditional Swedish crafts such as glass-making, weaving, and woodworking are still carried on. Ceramic articles and furniture are among the many other finely crafted items for which Sweden is noted.

Sweden has extensive deposits of iron ore. Most of it comes from Lapland, in the far north. Lapland's deposits, centered at the towns of Kiruna and Gällivare, are considered to be among the world's largest iron ore reserves. Europe's single largest deposit of lead ore is located near Skellefteå, in the north.

Other ores and minerals occur in relatively small quantities. Copper and zinc are mined in the north. Other metals produced include silver, gold, and uranium. Sweden has little coal or petroleum and must rely on imports for these fuels.

Only about one-tenth of Sweden is used for agriculture. The heaviest concentration of farming is in the southern third, where temperatures and rainfall are favorable. Careful land management, combined with the use of fertilizers and crop rotation, results in high yields. Nearly all farms are privately owned. Many have sizable stands of timber that provide additional income.

The principal crops include wheat, oats, barley, rye, sugar beets, and potatoes. Only in the rich plains of the far south is the emphasis strongly on cultivated crops. Here, the land is planted chiefly in wheat and sugar beets. Hogs are raised in the south as well. Elsewhere, emphasis is on the raising of cattle and feed crops such as oats and clover. About three-fourths of all farm income is from the sale of livestock and dairy products.

Besides providing much lumber, Sweden's extensive forests furnish raw material for the thriving pulp and paper industry. Particularly important are the slow-growing but valuable pine and spruce trees of the north. Timber cutting in Sweden has become highly mechanized, with wide use of tree harvesters, power saws, and specialized log-handling equipment. Large trucks haul most of the timber directly to the mills, although the traditional method of floating logs downstream is still used in places.

About half of the forested land is owned privately, mostly by farmers. The rest is divided between corporations and the government. Strict conservation programs are carried on, and both the government and private interests conduct research to improve both the quality and the quantity of Sweden's timber.

A small but modern fishing industry is centered on Sweden's southwest coast. Fishing is done mostly in the waters of the Baltic, the Skagerrak, and the Kattegat, and the catch is made up largely of cod, herring, and mackerel. Fishermen market their catch both at home and in nearby foreign ports.

Tourism is also important to Sweden's economy, bringing considerable income to the country.

Sweden has modern, well-maintained networks of roads and railways. A system of paved, multilane highways connects the cities of central and southern Sweden; secondary roads reach smaller communities.

Swedish railways are owned by the government. Like roads, they are mostly in the southern half of the country. Fast, modern passenger trains link Stockholm with Göteborg and most other cities. Many lines are electrified, including the route reaching Lapland. An extension of this line carries iron ore over the mountains to Narvik, Norway.

Sweden cooperates with Norway and Denmark in operating the Scandinavian Airlines System (SAS), a major international carrier. Domestic service is provided to Sweden's larger cities and towns by several airlines. Stockholm has the main international airport; other important terminals are at Göteborg and Malmö.

Ocean shipping is centered at three major ports. Göteborg is the principal port; Stockholm and Hälsingborg handle trade primarily with Baltic and other European nations. Both Stockholm and Göteborg have access to the interior through lakes, rivers, and canals. Winter ice, however, closes these interior routes, as well as most coastal ports north of Stockholm.

Sweden is highly dependent on foreign trade. Much of the trade is with other European nations, especially Germany, Great Britain, Norway, and Denmark. The United States and Japan are also important trading partners. Sweden's principal exports are pulp and paper, machinery, chemicals, and transportation equipment. Imports include fuels, especially petroleum; machinery; and food, particularly fruits and vegetables.