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Economy of Finland

Finland has a highly industrialized, free-market economy with a per capita output equal to that of other western economies such as France, Germany, Sweden, or the U.K. The largest sector of the economy is services (64.9%), followed by manufacturing and refining (32.4%). Primary production is at 2.7%. The Finnish economy had made enormous strides since the severe recession of the early 1990s. Finland successfully joined the euro zone and outperformed euro-area partners in terms of economic growth and public finance. Following a period of sustained and robust growth, the Finnish economy suddenly slowed in the wake of the international financial crisis. GDP growth shrank from 0.9% in 2008 to -8.2% in 2009 (the sharpest contraction since Finland gained independence from Russia in 1917). Exports declined 32%, and unemployment climbed to 8.2%. In 2010 the Finnish economy recovered from the 2009 financial crisis better than most forecasts predicted, and showed a broad-based growth of 3.1%. The forecast for 2011 predicts an export-driven annual growth of 3.6%. GDP growth in 2012 is expected to average 2.7%. The unemployment rate for 2010 was 8.4%, and as the economy recovers forecasts predict a drop to 7.6% in 2011 and 7.2% in 2012. Inflation rose to 1.2% in 2010. Inflation is expected to accelerate to 3.3% in 2011, mainly due to rising world market prices of food, energy, and raw materials. The general government financial balance turned to deficit in 2009, bringing an end to a sustained period of surpluses. Nonetheless the deficit in 2009 and 2010 did not exceed the 3% threshold under the EU Stability and Growth Pact. Public finances are set to improve in 2011 in the wake of economic recovery, tax hikes, and the withdrawal of temporary stimulus measures. In 2011 the general government deficit is estimated at 0.9% of GDP. Exports of goods and services contribute over 38% of Finland's GDP. Metals and engineering (including electronics) and timber (including pulp and paper) are Finland's main industries. The United States is Finland's third most important trading partner outside of Europe. With a 3.4% share of imports in 2010, the United States was Finland's seventh-largest supplier. Major exports from the United States to Finland continue to be machinery, telecommunications equipment and parts, metalliferous ores, road vehicles and transport equipment, computers, peripherals and software, electronic components, chemicals, medical equipment, and some agricultural products. The primary competition for American companies comes from Russia, Germany, Sweden, and China. The main export items from Finland to the United States are electronics, machinery, ships and boats, paper and paperboard, refined petroleum products, telecommunications equipment and parts. In 2010, the United States was Finland's third-largest customer after the EU (55.0%), and Russia (9%). However, trade is only part of the totality: American companies in Finland employed 23,800 Finns, and Finnish companies in America employed 31,500 Americans in 2008. About 2.0% of the Finnish GDP comes from exports to the United States. Except for timber and several minerals, Finland depends on imported raw materials, energy, and some components for its manufactured products. Farms tend to be small, but farmers own sizable timber stands that are harvested for supplementary income in winter. The country's main agricultural products are dairy, meat, and grains. Finland's EU accession has accelerated the process of restructuring and downsizing of this sector. Economy (2010) GDP (2010): $239.2 billion. GDP growth rate: 3.1%. Per capita income (2010): $35,400. Inflation rate: 0.0% (2009); 1.2% (2010). Natural resources: Forests, minerals (copper, zinc, iron), farmland. Agriculture, forestry, fishing and hunting (2.6% of GDP): Products--meat (pork and beef), grain (wheat, rye, barley, oats), dairy products, potatoes, rapeseed. Industry (32.4% of GDP): Types --metal (including electronics and electrical equipment) and engineering, forest products, chemicals, shipbuilding, foodstuffs, textiles. Services (2010): Approximately 64.9% of GDP. Trade: Exports --$69.4 billion. Major markets --EU 55%, Russia 9%, U.S. 7%, China 5.11%. Imports --$68.3 billion. Major suppliers --EU 55%, Russia 17.8%, China 7.3%, U.S. 3.4%. Exchange rate (2010): 1.3257 euros (EUR) = U.S. $0.7543.

Geography of Finland

Location: Northern Europe, bordering the Baltic Sea, Gulf of Bothnia, and Gulf of Finland, between Sweden and Russia Geographic coordinates: 64 00 N, 26 00 E Map references: Europe Area: total: 337,030 sq km land: 305,470 sq km water: 31,560 sq km Area-comparative: slightly smaller than Montana Land boundaries: total: 2,628 km border countries: Norway 729 km, Sweden 586 km, Russia 1,313 km Coastline: 1,126 km (excludes islands and coastal indentations) Maritime claims: contiguous zone: 6 nm continental shelf: 200-m depth or to the depth of exploitation exclusive fishing zone: 12 nm territorial sea: 12 nm (in the Gulf of Finland-3 nm) Climate: cold temperate; potentially subarctic, but comparatively mild because of moderating influence of the North Atlantic Current, Baltic Sea, and more than 60,000 lakes Terrain: mostly low, flat to rolling plains interspersed with lakes and low hills Elevation extremes: lowest point: Baltic Sea 0 m highest point: Haltiatunturi 1,328 m Natural resources: timber, copper, zinc, iron ore, silver Land use: arable land: 8% permanent crops: NA% permanent pastures: NA% forests and woodland: 76% other: 16% (1993 est.) Irrigated land: 640 sq km (1993 est.) Natural hazards: NA Environment-current issues: air pollution from manufacturing and power plants contributing to acid rain; water pollution from industrial wastes, agricultural chemicals; habitat loss threatens wildlife populations Environment-international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Sulphur 85, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity, Climate Change, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: Air Pollution-Persistent Organic Pollutants, Climate Change-Kyoto Protocol Geography-note: long boundary with Russia; Helsinki is northernmost national capital on European continent; population concentrated on small southwestern coastal plain

Government of Finland

Finland has a mixed presidential/parliamentary system with executive powers divided between the president, who has primary responsibility for national security and foreign affairs, and the prime minister, who has primary responsibility for all other areas, including European Union (EU) issues. Under the constitution that took effect in March 2000, the established practice for managing foreign policy is that the president keeps in close touch with the prime minister, the minister for foreign affairs, and other ministers responsible for foreign relations. Constitutional changes strengthened the prime minister--who must enjoy the confidence of the parliament (Eduskunta)--at the expense of the president. Finns enjoy individual and political freedoms, and suffrage is universal at 18. The country's population is relatively ethnically homogeneous. Immigration to Finland has significantly increased over the past decade, although the foreign-born population, only 2.9% of the total population (December 2009), is still much lower than in any other EU country. Few tensions exist between the Finnish-speaking majority and the Swedish-speaking minority. President and cabinet. Elected for a 6-year term, the president:
  • Handles foreign policy, except for certain international agreements and decisions of peace or war, which must be submitted to parliament, and EU relations, which are handled by the prime minister;
  • Is commander in chief of the armed forces and has wide decree and appointive powers;
  • May initiate legislation, block legislation by pocket veto, and call extraordinary parliamentary sessions; and
  • Appoints the prime minister and the rest of the cabinet (Council of State). The Council of State is made up of the prime minister and ministers for the various departments of the central government as well as an ex officio member, the Chancellor of Justice. Ministers are not obliged to be members of the Eduskunta and need not be formally identified with any political party.
  • The president may, upon proposal of the prime minister and after having heard the parliamentary groups, order parliament to be dissolved, and a new election held.
Parliament. Constitutionally, the 200-member, unicameral Eduskunta is the supreme authority in Finland. It may alter the constitution, bring about the resignation of the Council of State, and override presidential vetoes; its acts are not subject to judicial review. Legislation may be initiated by the president, the Council of State, or one of the Eduskunta members. The Eduskunta is elected on the basis of proportional representation. All persons 18 or older, except military personnel on active duty and a few high judicial officials, are eligible for election. The regular parliamentary term is 4 years; however, the president may dissolve the Eduskunta and order new elections at the request of the prime minister and after consulting the speaker of parliament. Judicial system. The judicial system is divided between courts with regular civil and criminal jurisdiction and special courts with responsibility for litigation between the public and the administrative organs of the state. Finnish law is codified. Although there is no writ of habeas corpus or bail, the maximum period of pretrial detention has been reduced to 4 days. The Finnish court system consists of local courts, regional appellate courts, a Supreme Court, and a Supreme Administrative Court. Administrative divisions. Since January 2010, Finland has been divided into six regional state administrative agencies--namely Etela-Suomi, Ita-Suomi, Lounais-Suomi, Lansi-ja Sisa-Suomi, Pohjois-Suomi, and Lappi--plus Aland, replacing the previous division of six provinces. Finland has 20 regions; the regions are divided into 72 sub-regions, and the sub-regions are divided into 342 municipalities. Fifteen Centers for Economic Development, Transport and the Environment (ELY Centers) form part of the government’s reform project for regional administration. The tasks and services of the former employment and economic centers, regional environmental centers, road districts, and state provincial offices’ departments for transport and communications and for education and culture have been pooled in the ELY Centers. They manage the regional implementation and development tasks of the state administration, and are tasked with promoting regional competitiveness, well-being, and sustainable development, as well as curbing climate change. The island province of Aland is located near the 60th parallel between Sweden and Finland. It enjoys local autonomy and demilitarized status by virtue of an international convention of 1921, implemented most recently by the Act on Aland Self-Government of 1951. The islands are further distinguished by the fact that they are entirely Swedish-speaking. Government is vested in the provincial council, which consists of 30 delegates elected directly by Aland's citizens. Military . Finland's defense forces consist of 13,000 active duty personnel (9,000 army; 2,000 navy; and 2,000 air force). The country's defense budget equals about 1.3% of GDP. There is universal male conscription under which all men serve from 6 to 12 months. As of 1995, women were permitted to serve as volunteers. A reserve force ensures that Finland can field 350,000 trained military personnel in case of need. Political parties. Finland's proportional representation system encourages a multitude of political parties and has resulted in many coalition governments. Political activity by communists was legalized in 1944, and although four major parties have dominated the postwar political arena, none now has a majority position. Following March 2007 parliamentary elections, the Center Party formed a four-party governing coalition with the Conservatives, the Swedish People's Party, and the Greens. Parliamentary elections were held in April 2011, and in June 2011 the National Coalition (Conservative) Party formed a six-party governing coalition with the Social Democratic Party, Left Alliance, Swedish People's Party, Green League, and Christian Democrats. Principal Government Officials President--Tarja Halonen Prime Minister--Jyrki Katainen Foreign Minister--Erkki Tuomioja Ambassador to the United States--Pekka Lintu (departure August 2011) Ambassador to the United Nations--Jarmo Viinanen Finland's embassy in the United States is located at 3301 Massachusetts Avenue, NW, Washington, DC 20008; tel: 202-298-5800; fax: 202-298-6030. Type: Constitutional republic. Constitution: July 17, 1919; March 2000. Independence: December 6, 1917. Branches: Executive--president (chief of state), prime minister (head of government), Council of State (cabinet). Legislative--unicameral parliament. Judicial--Supreme Court, regional appellate courts, local courts. Subdivisions: Six provinces, provincial self-rule for the Aland Islands. Political parties: Social Democratic Party, Center Party, National Coalition (Conservative) Party, Leftist Alliance, Swedish People's Party, Green League, Christian Democrats, True Finns. Suffrage: Universal at 18.

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History of Finland

The origins of the Finnish people are still a matter of conjecture, although many scholars argue that their original home was in what is now west-central Siberia. The Finns arrived in their present territory thousands of years ago, pushing the indigenous Lapps into the more remote northern regions. Finnish and Lappish--the language of Finland's small Lapp minority--both are Finno-Ugric languages and are in the Uralic rather than the Indo-European family. Finland's nearly 700-year association with the Kingdom of Sweden began in 1154 with the introduction of Christianity by Sweden's King Eric. During the ensuing centuries, Finland played an important role in the political life of the Swedish-Finnish realm, and Finnish soldiers often predominated in Swedish armies. Finns also formed a significant proportion of the first "Swedish" settlers in 17th-century America. Following Finland's incorporation into Sweden in the 12th century, Swedish became the dominant language, although Finnish recovered its predominance after a 19th-century resurgence of Finnish nationalism. Publication in 1835 of the Finnish national epic, The Kalevala--a collection of traditional myths and legends--first stirred the nationalism that later led to Finland's independence from Russia. In 1809, Finland was conquered by the armies of Czar Alexander I and thereafter remained an autonomous grand duchy connected with the Russian Empire until the end of 1917. On December 6, 1917, shortly after the Bolshevik Revolution in Russia, Finland declared its independence. In 1918, the country experienced a brief but bitter civil war that colored domestic politics for many years. During World War II, Finland fought the Soviet Union twice--in the Winter War of 1939-40 and again in the Continuation War of 1941-44. This was followed by the Lapland War of 1944-45, when Finland fought against the Germans as they withdrew their forces from northern Finland. During the Continuation War (1941-1944) Finland was a co-belligerent with Germany. However, Finnish Jews were not persecuted. Of the approximately 500 Jewish refugees who arrived in Finland, eight were handed over to the Germans, for which Finland submitted an official apology in 2000. Also during the war, approximately 2,600 Soviet prisoners of war were exchanged for 2,100 Finnish prisoners of war from Germany. In 2003, the Simon Wiesenthal Center submitted an official request for a full-scale investigation by the Finnish authorities of the prisoner exchange. It was established there were about 70 Jews among the extradited prisoners but none was extradited as a result of ethnic background or religious belief. Treaties signed in 1947 and 1948 with the Soviet Union included obligations and restraints on Finland vis-a-vis the U.S.S.R. as well as territorial concessions by Finland; both have been abrogated by Finland since the 1991 dissolution of the Soviet Union.

People of Finland

The origins of the Finnish people are still a matter of conjecture, although many scholars argue that their original home was in what is now west-central Siberia. The Finns arrived in their present territory thousands of years ago, pushing the indigenous Lapps into the more remote northern regions. The Finnish language is Finno-Ugric, of the Uralic language family (of which Hungarian and Estonian also are a part) and not Indo-European. Lappish, the language of the small Lapp minority, also is Finno-Ugric. Swedish became the dominant language following Finland's incorporation into Sweden in the 12th century. Finnish recovered its predominance after a resurgence of Finnish nationalism in the 19th century. Today, although 94% of the people speak Finnish as a first language, both Finnish and Swedish are official languages. The population is ethnically homogeneous with no sizable immigrant population. Few tensions exist between the Finnish-speaking majority and the Swedish-speaking minority. Finns are highly literate, and poetry has played a key role in Finnish history. Publication in 1835 of the Finnish national epic, The Kalevala, a collection of traditional myths and legends, first stirred the nationalism that led to independence in 1917. An important theme in Finnish literature is humanity's unity with nature, which identifies human fate with impersonal forces and which gives Finnish literature a somber, sometimes tragic, sometimes heroic, tone. Another theme is the importance of the common people--the Finnish folk. One of the country's major writers, Frans Emil Sillanpaa, received the Nobel Prize for literature in 1939. Finland is one of the most active publishing countries in the world. Although major literary works have been translated into English, Finnish music, because it does not require translation, is better known. This is especially true of the works of Jean Sibelius who, along with many other Finnish artists, was profoundly influenced by The Kalevala. Finns also are outstanding in other artistic fields; their jewelry, textile, glass, and furniture designs have gained prominence throughout the world. Finland enjoys complete religious freedom as well as free education through the university level. An extensive social welfare system, constituting about one-fifth of the national income, includes a variety of pension and assistance programs and a comprehensive health insurance program. In the mid-1970s, the educational system was reformed with the goal of equalizing educational opportunities. Beginning at age 7, all Finnish children are required to attend a "basic school" of nine grade levels. After this, they may elect to continue along an academic (lukio) or vocational (ammat-tikoulu) line. However, most pursue vocational studies. About one child in four receives a higher education in this highly competitive system. The number of openings in higher educational institutions is less than the demand. Nationality: Noun --Finn(s). Adjective --Finnish. Population (July 2011): 5,259,250. Population growth rate (2011): 0.075%. Ethnic groups: Finns, Swedes, Lapps, Sami, Roma, Tatars. Religions: Lutheran 82.5%, Orthodox 1.1%, Christian 1.1%, other 0.1%, none 15.1%. Languages: Finnish 91.51%, Swedish 5.5% (both official); small Lapp-speaking (0.03%) and Russian-speaking (0.97%) minorities. Education: Years compulsory --9. Attendance --almost 100%. Literacy --almost 100%. Health: Infant mortality rate (2011)--3.43/1,000. Life expectancy --males 75.79 yrs., females 82.89 yrs. Work force (2.68 million; of which 2.46 million are employed): Public services --32%; industry --19%; commerce --15.9%; finance, insurance, and business services --14.5%; agriculture and forestry --4.5%; transport and communications --6.8%; construction --7.2%.
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