Sweden’s Election: Should expats here care? Part I

Sweden’s Election: Should expats here care? Part I

One month from now, Sweden is going to the polls for national, regional and local elections. For foreigners enjoying a long, relaxing summer, there is probably a tendency to downplay the event – after all, most of us don’t have the right to vote, in particular at national level. A sense of letting the Swedes decide for themselves can result, which leads to disinterest in the issues. Mundus asks – is that warranted? You might have guessed our view already, but we’ll continue before getting to the point.

For expats, most of the time things tend to change on a timescale that doesn’t affect you – though sometimes it might affect the generation following next. The types of western places that foreigners tend to go, such as Singapore, the USA or the UK have in the past been stable. So, one tends to indulge in the assignment and, when its time, move on. But, as the list I’ve just mentioned shows, that can change, with potentially big effects on foreigners – Brexit being the most notable.

Political change tends to happen as a result of elections, especially when the incumbent government gets thrown out. That looks on the cards here, with the Social Democrat vote at all-time lows and the Greens struggling to keep above the threshold of 4% which would see them lose representation in the Riksdag. So, what are the important issues for the election, and what will the next government do about them? The answer to this question depends on who you ask. If we asked about your personal preferences, as an foreigner, you might be inclined to pick housing, visas (migration) and taxation. Swedish voters put Migration and the Environment as the top two issues, followed by Health, Law and Order and Integration. The Economy is in a lowly sixth place.

But, Sweden’s business community has a different perspective. It wants economic reform, and is growing increasingly worried that it won’t get it. As these businesses are quite likely your employer, it is worth thinking about their perspective. Take Leif Östling, the former Scania CEO, who is now on the Board of EQT, a large venture capitalist, and an adviser to Morgan Stanley. He didn’t mince his words when Di interviewed him about Sweden’s election challenges, and was disturbed by the fact that the dominant issue on which campaigning is done is about immigration, when Sweden faces a series of problems that threaten Swedish competitiveness. “Sweden is stuck in a socialist thinking model where everything should be fair and equal. It’s planning economics.” Are these just the words of one disgruntled capitalist?

Evidently not. A series of alarmist headlines are starting to appear. In Dagens Industri on August 7, several leading economists were interviewed. Klas Eklund, Senior Economist at Mannheimer Swartling, a leading law firm, said that “the big problem is that Sweden today is in great need of a number of major reforms. We need a reformed labour market, a big tax reform and reforms of the housing market. And above all, the problem of integration needs to be solved.”

The National Institute of Economic Research (Konjunkturinstitutet), a government agency, says that Sweden is currently on top of a uniquely long boom, but unemployment is not expected to reach lower than the current level of 6.2% before it starts to rise again.

Anna Breman, Chief Economist at Swedbank, said that “weaknesses are already visible. Large parts of the labour market are going well, but when companies scream for labour with today’s relatively high unemployment it shows obvious problems. And that also applies to the education system and corporate conditions.” And, John Hassler, Professor of International Economics at Stockholm University, says he is concerned about the low Swedish growth rate today. “Political courage is needed to implement the changes that are now required. But many of the established parties today are very afraid of doing things that can be perceived as controversial, and which risk treading on the toes of key electoral groups.”

The economists’ concerns aired in Di were echoed, this time in Financial Times on August 8, which interviewed business leaders. Sebastian Siemiatkowski, Klarna’s CEO, is quoted as saying Sweden’s politicians “lack ambition”. Another unnamed leader was quoted as saying, “Sweden’s success has been built on dependable governments doing reforms at the right time. I am concerned if the next government will be up to the task.” The FT observes that tech companies, led by the founders of Spotify, have consistently warned in recent years that Stockholm’s prime position as a European start-up capital is being undermined by a variety of policies, from the difficulties of renting property to punitive rules on stock options.

Returning to the rhetorical question we began with – should you care? The answer depends on your perspective, given personal issues such as how long you anticipate staying, whether you’re in Sweden for business or personal reasons, and your financial objectives. If you can’t get your visa renewed, find good accommodation, or are hoping for better opportunities in the future, based on the success of your employer, then Mundus argues that you should be very interested in the outcome of the poll, even if you can’t vote.

In Part II of this series we will outline the different positions of the political parties, and how they are relevant to you.

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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.