The Mundus Take: 26 March 2020

In just a few weeks the crisis has had a profound effect on the way Sweden organises itself and does business. High schools and higher education have been moved off campus and online. The health system is preparing for a major increase in the number of cases, with makeshift hospitals built and Stockholmers have been asked not to travel, in order to not spread the disease.

The business effects have been almost as immediate as the rise of corona. The airline industry, including SAS, will need strong state support if it is to continue to exist. A significant number of retail firms, who have lost a vast percentage of their customers have filed for bankruptcy or reconstruction. And Sweden’s large manufacturers, Volvo AB and Scania (trucks), and Volvo Cars have announced that their factories are to close temporarily awaiting both parts and an increase in demand.

On Sunday night, the Prime Minister, Stefan Löfven made a highly unusual address to the nation. His heavy tone conveyed the seriousness with which he and his government were taking matters. In the surrounding days, his Finance Minister, Magdalena Andersson announced a variety of drastic measures to support businesses, employees and communities, utilising the state’s deep pockets to protect what they could.

Despite the national focus on making preparations to avoid thousands of deaths and the immediate collapse of firms, some are already asking what lies beyond the immediate reaction. In fact, a number of international media (FT, America’s ABC) have already picked up on the exceptionalist response from Sweden. A variety of tensions are present in society and the business community, and these are being played out on the opinion and editorial pages. The most evocative quote came from former Reinfeldt Minister, Mikael Odenberg, who exclaimed “the government is not a **** mailbox”, in frustration at the fact that it was the Public Health Authority, not the Löfven government in charge of the response. Although this was an appeal for politicians to be seen to be in charge, it could equally well have echoed the amazement of the community at the rather nonchalant policies that the experts applied, with childcare, primary schools, restaurants and bars left open at a time when the rest of the world was in a tight lockdown.

But this was not the only issue debated. Dagens Industri, the country’s leading business paper, demanded that Sweden needed to “Reopen for business” before the economy fell into a depression. Sweden’s former EU Trade Commissioner, Cecilia Malmström, coauthored an opinion piece calling for borders to remain open at a time when global leaders were busy slamming them shut. A Moderate MEP lamented that the decisions being taken risked breaking the EU, while all of Sweden’s political parties said that the banks had no right to pay dividends at the same time as they needed to provide funding to failing businesses.

And so Swedish exceptionalism is now on show in a way that no-one planned for. This is not a set piece event like global warming where Sweden has chosen to take a distinctive stand. Rather, it is an instinctive response from the structural and cultural forces at play in Sweden. Within days the country could find itself a real life petri dish, with epidemiologists, economists, diplomats and businesspeople looking to see what is growing.

If Sweden’s experts get the public health challenge correct, then it will have managed the situation with a far reduced impact on the economy and society. This is not implausible. Some of Sweden’s leading epidemiologists have indicated signs of hope that it may be controlled prior to summer. And so far the health outcomes are equivalent to Denmark and Norway, Sweden’s neighbours with populations less than half the size.

But, if Sweden gets it wrong, it will be a very uncomfortable place for the experts and politicians alike. There will be nowhere to hide from the shame of having exposed Swedes to further tragedy. And, just as we are publishing this, deaths in Stockholm have spiked, with 2,000 medical researchers writing a letter rejecting the Public Health Authority’s strategy and plans. The situation is fraught.

Much rests on the days ahead.

Sean is responsible for Mundus’ strategy and commercial activities. He began his career in the oil industry Australia. After working internationally in commercial roles with BP in South Africa, the UK and Singapore he moved to Sweden with his family in 2009. He worked in business development and then as the Strategy and Growth Director for NASDAQ Commodities from 2009 to 2015. Sean holds an engineering degree from Adelaide University and an MBA from the Darden Business School at the University of Virginia.