Sunday, September 17, 2006

STOCKHOLM — Sweden is often hailed around the world as one of the most successful socioeconomic models, but many Swedes say their generous womb-to-tomb welfare state is showing cracks and is no longer the Social Democratic paradise it once was.

“There aren’t enough day care spots. They’re constantly making cuts in the health care system, and there are long [lines] at the hospitals. And the welfare state is expensive,” complained Per-Ola Pettersson, 35, a resident of this capital who says he expects more from the high taxes he pays to fund the system.

At a glance, visitors to this Scandinavian country would say that Swedes live a grand life — they have universal health and child care, a year’s paid parental leave, long life expectancy, a solid public education system, a competitive economy and the world’s highest per-capita ownership of second homes and pleasure boats.

For decades the so-called “Swedish model” of socialist values combined with vibrant enterprise has been the envy of many governments, and many still look to Sweden to study its example when the time comes for reforms.

But in the run-up to the country’s legislative elections today, in which Prime Minister Goeran Persson’s Social Democrats face a serious challenge from the center-right opposition, many have begun to wonder whether their welfare model isn’t long overdue for a makeover of its own.

“A lot of people have been shut out of the labor market, such as immigrants and young people, and we are seeing worsening results in schools. We have problems with long [lines] for health care,” said Johnny Munkhammar of the conservative Timbro think tank.

“These welfare services are provided by the state, but the state can’t deliver them sufficiently when needed,” he said, noting that some reforms were undertaken in the 1990s but that nothing has happened since then.

Among the most visible problems in Sweden today is unemployment.

Official statistics put the jobless rate at 6 percent in July, but specialists say that about 20 percent of Swedes of working age — about a million people — live on state subsidies because they are unemployed, on sick leave, have chosen early retirement, or because they are in government retraining programs.

“Critics see employment as the biggest problem with the welfare system today. Ever since an economic crisis in the early 1990s, Sweden has never managed to bring down its unemployment figures,” said Stockholm University economics professor Lennart Erixon.

Critics say that high taxes on employers are a major barrier for private-sector job growth, and high income taxes and generous state subsidies provide no incentive for people to get a job. But others argue that the booming Swedish economy — 5.5 percent growth in the second quarter, and 3.6 percent forecast for 2006 — is evidence that the welfare system is in good shape.

“From an international perspective, we have extremely high productivity, which has accounted for most of Swedish economic growth in recent years,” said Sandro Scocco of the Swedish Institute for Growth Policy Studies. And employment is picking up, he added.

The head of the opposition conservative Moderate Party, Fredrik Reinfeldt, 41, leads a four-party coalition that hopes to wrest power from the Social Democrats. This Alliance for Sweden has agreed on a joint election manifesto and appears more capable than ever of winning power.

That would be a major feat, as the Social Democrats, creators of the welfare state, are widely viewed by voters as its caretaker and have governed Sweden for 64 of the past 75 years.

But rather than making radical changes that would move Sweden to the right, the alliance insists it has no plans to abolish the welfare system — it just wants to “tweak” it.

“To be elected in Sweden, you have to defend the welfare state,” Mr. Munkhammar said.

Mr. Reinfeldt of the Alliance for Sweden has made jobs his top priority, saying Swedes must work in order to continue to fund their welfare state.

He has pledged to lower taxes and stimulate the business climate to increase employment, while reducing unemployment and health benefits.

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