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BY MICHAEL SOLTYS HERALD STAFF
While most countries have been reflecting at least outwardly the calm of the summer holiday season, Sweden has been hyperactive this week, playing a central part in at least three public events in a sparse calendar.
On Tuesday former Swedish Ambassador Peter Landelius addressed an event organized by the General Business Confederation (CGE) to honour both himself and the Raoul Wallenberg Foundation. On Wednesday Chilean-born Swedish Liberal deputy Mauricio Rojas gave a briefing on Sweden today at the offices of CADAL (Centre for Opening and Developing Latin America). And on Thursday it was Rojas again at the Swedish Embassy residence, launching the Spanish-language version of his 2002 book The sorrows of Carmencita: Argentina's crisis in a historical perspective on the very day it was printed.
To begin with the latter, Rojas' book has the virtues of the outsider's perspective and the big picture. Thus according to Rojas, Argentina did not enjoy seven but 70 years (1860-1930) of fat cows and has not had seven but 70 years of lean cows since. Nor does he trace back the Peronist vices of political feudalism and populism to Juan and Evita Per¢n but all the way to Juan Manuel de Rosas.
Argentina still has not recovered from the Spanish colonial administration being immediately followed by the caudillos, he argues _ such pre-modern, pre-democratic politics is alive and well today with the pickets.
Even if the collapse of the old model and "political barbarism" started in the 1930s, the Lund University economic history professor pins the real turning-point of the crisis on Per¢n _ above all, the transfer of resources from a competitive, exporting agriculture to non-competitive, protected, non-exporting and even "demodernizing" industry for the sake of the Peronist urban masses. This prevented Argentine agriculture from modernizing at precisely the time when Canada, Australia and other major agricultural producers were doing so.
Rojas also blames Peronism for stifling true democracy by hampering any alternation of power (13 general strikes against Ra£l Alfons¡n) and for inculcating a nationalism which constantly sought to place the blame for Argentine problems elsewhere. But Rojas insists that Argentina's crisis is not accidental or cyclical or the fault of the United States, the International Monetary Fund or any one government _ it lies in Argentina's structures and mentality which must change.
No alternative to Peronism is viable or permitted, then, but Peronism (lacking any ideology) does not have to go down the wrong road _ Carlos Menem (a hopeless populist in La Rioja whose schools had more teachers than pupils) proved that with much-needed privatizations even though he ended up corrupting liberalism and giving it a bad name.
And finally N‚stor Kirchner today. Rojas has time for Kirchner, whose government thus far has been clean and fiscally disciplined _ although he is unduly driven by opinion polls and says some unfortunate things, Kirchner should be judged by what he does. He has created a sense of hope in the country and also has an economic pickup going for him but both these things will have to be invested into the rest of his presidency.
After 70 fat years and 70 lean, could the current soya boom mean that good years are returning? Perhaps but neither soya nor Kirchner can offer jobs and nor can outdated industries be protected (look at Swedish shipyards) _ employment is the big problem.
An immigrant himself in Sweden for the last 30 years, Rojas feels that part of Argentina's tragedy has been its failure to establish itself as an immigrant country for more than a couple of generations as a country with so much to offer _ and the many immigrants who did come have always stayed out of politics
If the Chilean intellectual thus seems to be singling out the Argentine crisis unduly, he was often harsh with the Swedish experience in CADAL the previous day. The Swedish model is still regarded worldwide as a high-tax welfare state but that model (born in 1932 with the election victory of the Social Democrats) has been dead for over a decade, he argues. _ and nobody wants to go back except perhaps the Communists. It was at its height when he arrived in Sweden in 1974 as a young Chilean exile from the extreme leftwing MIR and at first the quality of the Swedish welfare state only heightened his leftist feelings. But as he formed a family, he resented not being allowed to choose the school of his children and he gradually began to perceive the Swedish welfare state as one big hospital. The welfare state was only possible on the back of Sweden's dynamic industrialization since the late 19th century but that industry was showing its age as the 20th century wore on. Inventiveness, a hands-on attitude and a militaristic history all helped early Swedish industry to prosper; a somewhat guilty neutrality during the world wars contributed hugely; never protectionist (unlike Latin America), Swedish companies became multinational at a very early stage. But this successful industry stagnated (and stagnates to this day) _ if at least 400 of the 500 biggest United States companies have emerged in the last 40 years, barely 10 of Sweden's big 100 have arisen in the last 60 years. Olof Palme (Swedish prime minister for most of the period from 1968 until his assassination in 1986) introduced a hitherto absent anti-business mentality into the ruling Social Democrats and at the same time intellectuals like Gunnar Myrdal started carrying the welfare state to new cradle-to-grave extremes.
The model imploded rapidly with the loss of first economic and then political confidence between 1989 and 1991. Interest rates soared to 500 percent in 1990; public spending reached 63 percent of Gross Domestic Product and the budget deficit 13 percent; the Swedish monarchy was looking like a banana republic. The ranks of the jobless rose to 12 percent as many people preferred to stop working rather than pay rising taxes _ the public protest of Sweden's most popular novelist Astrid Lindgren upon receiving an income tax bill exceeding 100 percent in 1989 was a milestone here. The welfare state could afford to pay dole to two percent (the traditional figure) but paying 12 percent made for impossible deficits.
In 1991 the Social Democrats lost power for the first time since 1932 (except 1976 when no real alternative existed) and until 1994 Sweden was taken down a different road by the right under Carl Bildt. Since 1994 the Social Democrats have been back in power but instead of seeking a return to the welfare state, they ended the deficits with tough, mature policies under G”ran Persson, first as finance minister and then as prime minister from 1996.
Sweden thus came back from the brink but Rojas is not especially optimistic about the future. Demography means 600,000 new pensioners in the next 30 years when the workforce has not grown since 1980. Nor are new jobs easy with Sweden fully industrialized and productivity gains meaningless with saturated markets. The only work which cannot be rationalized lies in personal services (a haircut is no quicker now than it used to be) and Rojas expects this sector to account for increasingly more jobs.
Deficits are creeping back as demands on the state rise while taxes cannot be increased beyond 50 percent for income tax or 30 percent for corporate. Egalitarian ideals die hard in Sweden and there is still reluctance to sacrifice them to end health care delays or to free education. Some 90 percent of the workforce is still unionized and this hampers change _ for example, trade union neutrality was enough to defeat Sweden's entry into the euro by a referendum vote of 54 percent last September when it was backed by all ‚lites including the government. After entering in 1995, Sweden remains an unenthusiastic member of a European Union of which it is now a middle-ranking country _ the 4th richest country in the world when Rojas arrived there in 1974, Sweden is now the 17th, lagging behind many EU colleagues. Even more than Europe, Sweden will have to absorb its growing immigrant community to which Rojas belongs. Those living legally in Sweden and born elswhere alone number a million of Sweden's nine million, claims Rojas _ their families and illegal immigrants would double that number. The limits of freedom for these immigrants, for example Muslim minarets, is causing acute inner debate. Many immigrants voted for the right-leaning Liberals (who trebled their vote in the September, 2002 elections when Rojas was elected) because they see themselves as workers supporting the welfare state rather than its beneficiaries. Swedish defence of high wage levels often frustrates immigrants with their customary willingness to work their way up by accepting low pay.
Egalitarian income policies also mean that Swedish professionals are underpaid but although highly skilled and with excellent English, most still prefer not to emigrate.
The CGE ceremony was scheduled as a tribute to Landelius but CGE president Ricardo Faerman slipped in a surprise award to Raoul Wallenberg President Baruj Tenenbaum, received at the hands of trade unionist Carlos West Ocampo (writer Marcos Aguinis gave Landelius his). With such a mixed cast, the event was an unusually eclectic affair, mingling economics, human rights and culture.
Despite this diversity and despite his own strong literary bent (the polygot diplomat has translated Ernesto S bato, Julio Cortazar, Pablo Neruda, Gabriel Garc¡a M rquez and Mario Benedetti among others from Spanish into Swedish), Landelius _ ambassador here between 1997 and 2001 _ largely aimed his speech at his CGE hosts. Perhaps its main theme was that despite widespread fears of globalization, small and medium-sized companies actually gained most from regional integration.