Mundus Brief – June 2021

It is typically during the first two weeks of June when pupils meet for one last time before diving into a two-month-long summer holiday. School leavers celebrate Studenten, frequently on the back of a truck, before pursuing work or study. But this summer is somewhat unusual: although we have learned a lot about the coronavirus, it continues to influence industry, power and society. In that respect, we can learn a lot from school leavers, as there is a sense of bittersweetness and optimism, sprinkled with uncertainty, in the air.

Vaccine passports and the Stockholm Syndrome

2020 saw borders shuttered and restrictions ushered in a way that few could have envisaged. Outsiders tend to view the Nordics as a region where decision- and policymakers make like-minded decisions, but as we reported in Mundus News, the pandemic showed that this is not always the case. Denmark, Finland, Iceland and Norway went into lockdown, whereas Sweden took another path with its soft-touch approach, which became a source of global notariety. Our readers will be aware of the numerous restrictions imposed on sectors like entertainment, nightlife and retail. But, vaccinations are well underway and nearly 50% of the Swedish adult population have at least received their first jab at the time of writing this. When the restrictions are lifted, in a series of steps starting 1 June, Sweden will become the last in the Nordics to exit covid restrictions.

The so-called “vaccine passports”, organised by the European Union, brought a sense of optimism among Swedes as summer travel could once again be realised. Initially planned to go ahead on 1 June, the passports have been postponed until 1 July. Unfortunately, given the delay, and the timing, for many Swedes this makes the vaccine passports less relevant, with Swedish holidays beginning a month ahead of others in Europe, and before most can get their second injection.

Rosier outlooks on the economy

Like many governments globally, Sweden’s supported its industry through the crisis. The Minister for Finance, Magdalena Andersson (S), in liaison with her colleagues from MP, L and C, agreed to extend furlough schemes until September – a move that could cost roughly SEK 1 billion – in light of lagging vaccine deliveries. Coining the decision as a good investment, Andersson (S) seeks to bring more stability to the Swedish labour market as unemployment rates are decreasing, with the number of jobless creeping under 8% according to new data, a big improvement on the 9.4% that Statistics Sweden clocked up in April. And as analysed in the most recent edition of Mundus Business insights, the unemployment may be back to pre-pandemic levels by the end of 2022. Unsurprisingly, consumption and exports are credited for the growth – a nod to recent statements made by the Riksbank Governor, Stefan Ingves, who painted a rosier picture with regards to the economy. And in this Monthly Policy Review we also examine the Riksbank’s monetary policies in relation to the SEK as a driver of employment, exports and welfare.

The Arctic Powerhouse

The pandemic did not prove to be an obstacle to the booming Arctic region. Big projects in energy, industry and infrastructure are ushering a green wave in a region whose key sectors have historically relied on timber and mining that contributed to building the Swedish welfare state. With giant projects like Hybrit and Northvolt, it comes as no surprise when the Minister for Employment, Eva Nordmark (S), stressed that the jobless can find work up north where opportunities are ample. In this context, the Finance Minister Andersson hailed a “new industrial revolution” taking place in Sweden, as jobs in industry and manufacturing are returning after having been outsourced in the 1980s and 1990s. The Arctic powerhouse could therefore bring a much-needed boost to the economy, both nationally and regionally, as it is a source of domestic and foreign investments. It is also an endeavour that leaves ripples on the regional economy in Norrland, as investment spurs growth in sectors like construction, health and education as local authorities plan to extend their services. We take the plunge in a feature on the Arctic powerhouse in this month’s Review building on two earlier Monthly Policy Review articles on Norrland’s industries and the green transition. 

Too early for election fever?

A rejuvenation in Swedish political cooperation is also observed. Centre Party leader Annie Lööf (C) hinted in an interview in March that she is likely to back a red-green government in a bid to redraw the political middle in 2022, when the next parliamentary election is due to be held. By taking the centre ground, Lööf is in a position where she could usher bipartisan cooperation not only with S and MP, which is currently holding the reins, but also by inviting M and KD into a wider grand coalition with the sitting red-greens, thereby isolating SD and pushing V into the fringes (even if there are instances where C and V are able to cooperate on a local and regional level). But this would not come cheaply for both sides, with critics pointing to the 1970s which saw centrist influence on politics and policy, as explained in another article in the June edition of the Review providing a snapshot of the current political landscape.

Retro respite in peace-building

Finally, in revisiting events from an earlier era, the recent developments in Gaza have reignited public debate on Sweden’s standing vis-à-vis Israel and Palestine. Our flagship article in the Monthly Policy Review attempts to shed light on Sweden’s position in the conflict and explore the roots of the country’s comparatively strong sympathies for Palestinians. Following the 2014 elections, the former Minister for Foreign Affairs, Margot Wallström (S), announced that Sweden would recognise the state of Palestine. It is an issue that is smouldering within Swedish politics and society as people and lawmakers are divided: for instance, lawmaker and ex-MEP Lars Adaktusson (KD) called for a debate on the Government’s stance on Gaza and has long campaigned in the Riksdag for a Middle East policy that reflects and embraces new geopolitical realities on the ground, including the historical normalisation of ties between Israel and four Arab states (Bahrain, Morocco, Sudan and the UAE). Adaktusson has also called for a sober review of Swedish development aid in Palestine after Reuters reported allegations that European and Swedish aid cash funded Palestinian militant groups blacklisted as terrorist organisations by international groups. But in parallel to this, pro-Palestine rallies have been sweeping across Gothenburg, and elsewhere in Sweden, which whipped up a discussion on anti-Semitism which even saw ex-PM Carl Bildt (M) face accusations of anti-Semitism.

Mundus wishes you a wonderful summer 

An undoubtedly eventful month, May brought us flowers, sunshine and a reality check on politics, society and economics. And like school leavers sporting white clothes and flowers in their hair, we at Mundus International look forward to a sunny summer. We wish you a great holiday season and look forward to a booming Fall.

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.