As the world’s fifth-largest exporter of oil, Norway’s economy has shown few, if any, signs of weakness during the financial crisis. Kristian Helgesen / Bloomberg News
As the world’s fifth-largest exporter of oil, Norway’s economy has shown few, if any, signs of weakness during the financial crisis. Kristian Helgesen / Bloomberg News

Scandinavia avoids the financial crisis



While many western countries are still reeling from the widening economic crisis and some southern European economies are regarded as basket cases, Scandinavia has been weathering the global financial storm surprisingly well.

The fact that Scandinavian countries have onerous tax systems and generous state welfare benefits seems to contradict accepted economic wisdom in other parts of the world, such as in the United States and the United Kingdom, where the role of the state is generally being rolled back where possible in response to the global crisis.

"Denmark, Finland, Norway and Sweden all belong to the exclusive club of countries with top ratings from the major credit rating agencies. These countries have status as safe havens in financial markets," says Helge Pedersen, the global chief economist at Nordea, a financial services group in the Nordic and Baltic region.

Economists and governments in other less-favoured economies are now starting to ask why it is that Scandinavian economies have been able to avoid the economic turmoil so successfully.

One crucial factor is that some Scandinavian countries received an early inoculation against the kind of boom and bust that has derailed larger and apparently more robust economies, which are still floundering since the US-led housing crash and subsequent financial crisis.

"At the beginning of the 1990s, Norway, Sweden and Finland experienced a banking crisis when the housing bubble burst in the same way that other western economies have now been experiencing," says Steinar Juel, the chief Norwegian economist at Nordea. "Sweden and Finland subsequently implemented good policies in banks together with new fiscal policy rulings."

However, it is inaccurate to lump all of Scandinavia's economies together under the assumption that all are equally robust or subject to the same pressures. Norway's robust economy, for instance, is underpinned by its oil industry, which has benefited massively from the global rise in oil prices.

"The Norwegian economy is showing few signs of weakness and we see no reason to change our optimistic view of the economy going forward," says Eric Bruce, an economist who also works for Nordea.

"Growth looks set to be high, but with increased labour immigration, an overheating of the economy and sharply rising costs will probably be avoided. Wage growth will be much higher than in neighbouring countries, but not so high as to push inflation above target."

Strong wage and employment growth, coupled with low inflation, are boosting consumer purchasing power in Norway, with the result that consumption growth in the first half of this year was very high after last year's weaker-than-expected trend. With an initial high level of savings and a sustained strong labour market, economists and market watchers see consumption growth continuing unabated into the next year.

Even at a time when many of Norway's export markets are floundering, Norwegian companies continue to expand globally.

Companies in Scandinavia's other economies are also pressing ahead with overseas expansion. Sweden's Ericsson, the world's largest mobile network equipment maker, is working with Mobile Communication Company of Iran to expand its network. Ericsson's growing investment in Iran comes at a time when many western companies have stopped doing business there because of international sanctions.

But lacking Norway's buffer of oil reserves Sweden may still be facing tougher times ahead.

Last month, Sweden's pony-tailed finance minister Anders Borg, announced that he might have to cut the country's growth estimates following the adverse effect of Europe's debt crisis on the country's exports.

According to economists, however, Sweden has been surprisingly resilient to the global turbulence and is significantly strengthened by consumer growth.

"Household finances are generally stable. A low inflation level and pay rises jack up households' purchasing power," says Torbjorn Isaksson, an economist at Nordea.

It is expected that real disposable income in Sweden will rise by about 2 per cent a year until 2014.

Economists are also looking towards growth in consumer spending to boost Denmark's economy. Danish economists predict that the economy will expand at a rate of 0.7 per cent this year, 1.9 per cent next year and 2.1 per cent in 2014.

Finland, however, is facing a slowdown in consumer spending growth, with economic activity decreasing across the board after the first quarter of this year.

Nevertheless, Nordea expects the Danish economy to gradually return to growth this year.

No one is certain that Scandinavia will continue to weather the global financial storm. But economists remain confident that their social systems will act as a stabiliser.

"When companies face difficulties and lay off staff, the government gives them money to live on and helps them find another job. This is focused to keep the economy on at an even level through difficult times," Mr Juel says.

Strengthening social networks could be difficult medicine for some western economies to swallow. But it should be remembered that many of the social safeguards existing in non-Scandinavian economies were put in place as a direct response to financial crises in the last century.

Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
  • Drones
  • Animals
  • Fireworks/ flares
  • Radios or power banks
  • Laser pointers
  • Glass
  • Selfie sticks/ umbrellas
  • Sharp objects
  • Political flags or banners
  • Bikes, skateboards or scooters
MATCH INFO

Sheffield United 2 Bournemouth 1
United: Sharp (45 2'), Lundstram (84')
Bournemouth: C Wilson (13')

Man of the Match: Jack O’Connell (Sheffield United)

THE LIGHT

Director: Tom Tykwer

Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger

Rating: 3/5

Juliot Vinolia’s checklist for adopting alternate-day fasting

-      Don’t do it more than once in three days

-      Don’t go under 700 calories on fasting days

-      Ensure there is sufficient water intake, as the body can go in dehydration mode

-      Ensure there is enough roughage (fibre) in the food on fasting days as well

-      Do not binge on processed or fatty foods on non-fasting days

-      Complement fasting with plant-based foods, fruits, vegetables, seafood. Cut out processed meats and processed carbohydrates

-      Manage your sleep

-      People with existing gastric or mental health issues should avoid fasting

-      Do not fast for prolonged periods without supervision by a qualified expert

THE SPECS

Jaguar F-Pace SVR

Engine: 5-litre supercharged V8​​​​​​​

Transmission: 8-speed automatic

Power: 542bhp​​​​​​​

Torque: 680Nm​​​​​​​

Price: Dh465,071

AGL AWARDS

Golden Ball - best Emirati player: Khalfan Mubarak (Al Jazira)
Golden Ball - best foreign player: Igor Coronado (Sharjah)
Golden Glove - best goalkeeper: Adel Al Hosani (Sharjah)
Best Coach - the leader: Abdulaziz Al Anbari (Sharjah)
Fans' Player of the Year: Driss Fetouhi (Dibba)
Golden Boy - best young player: Ali Saleh (Al Wasl)
Best Fans of the Year: Sharjah
Goal of the Year: Michael Ortega (Baniyas)

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.