Rethink the priorities we accord Nordic countries

The social welfare state within a free market framework in the five Scandinavian nations is worth studying

When Prime Minister Narendra Modi arrives in Sweden for the first India-nordic Summit, one question to ask is why such a meeting took so long to materialise. He has already visited several European countries as prime minister, many on stopovers to North America or for multilateral summits.

But as India engages advanced economies in Europe and elsewhere in a bid to derive investment, technology, commercial contacts, immigration and education privileges, and other benefits, the Nordic countries (Sweden, Finland, Norway, Denmark, and Iceland) arguably have something more important to offer. For both political and economic reasons, the Nordic Model provides India a worthy object of study.

In his two-volume work, The Origins of Political Order, political theorist Francis Fukuyama writes about countries trying to ‘get to Denmark’. It is a catchy way of using Denmark as a stand-in for an ideal, well-governed, democratic, peaceful, and prosperous state. Indeed, Denmark and its fellow Nordic countries can be found at or near the top of almost every ranking of good governance. They all rate between 95 and 100 out of 100 for the quality of their democracy according to Freedom House (with Norway, Sweden, and Finland getting perfect scores). Four of them are among the six least corrupt countries, as per Transparency International. And Denmark, Norway, and Finland rank among the top eight in government effectiveness according to the World Bank.

What sets the Nordic Model further apart is a strong social welfare state within a freemarket framework, a balance that has helped propel their economies forward. Collectively, the five Nordics have a gross domestic product of $1.5 trillion, larger than that of Russia. They are home to enterprising companies engaged in both old (Statoil, Ikea, Maersk, Lego, Volvo) and new (Nokia, Telenor, Spotify) industries. Finland, Norway, Denmark, and Iceland rank in the top four of the World Happiness Report (Sweden is 9th).

And yet for all their commonalities, the Nordics have espoused rather different approaches to international relations.

Only three of the five — Sweden, Denmark, and Finland — are members of the European Union. Just three — Iceland, Norway, and Denmark — are members of the North Atlantic Treaty Organisation (Nato).

Of course, there are some disconcerting signs beneath the surface even in these paragons of good governance. There have been economic setbacks, including a banking crisis in Iceland after 2008 and a recession in Finland more recently.

The Nordic countries have also not been immune to the European phenomenon of identity politics and flawed multiculturalism contributing to social and political tensions. The recent influx of refugees has sometimes tested the inclusiveness of the otherwise rather homogeneous Nordic societies. In 2015 and 2016, some travel links between Denmark and Sweden were briefly suspended and border controls were re-established due to concerns about illegal migration. Immigrant-heavy Stockholm suburbs have witnessed occasional rioting in recent years. These disruptions have been mirrored in the rise of far Right, antiimmigration political parties.

In India, bilateral ties with the Nordics have often been in the news for the wrong reasons. For a certain generation, Swedish business became associated with Bofors, the arms manufacturer embroiled in a major corruption scandal. A citizen of Denmark involved in an arms drop in West Bengal in 1995 became the subject of an extradition dispute that coloured India’s relations with that country. More recently, India and Norway expressed differences over a child welfare spat involving an Indian couple. What should have been relatively minor irritants instead created a widespread perception in India of typically European double-standards concerning corruption, terrorism, and human rights.

But despite the evident downsides and irritants, perhaps it’s time to rethink the priority India accords the Nordic countries. If one were genuinely interested in finding ways to balance social welfare with market reforms, improve governance at the local level, and increase entrepreneurship, it could do no harm to pay a little more attention to a few seemingly small northern European countries.

FOR ALL THEIR COMMONALITIES, THE NORDICS HAVE ESPOUSED DIFFERENT APPROACHES TO INTERNATIONAL RELATIONS. ONLY SWEDEN, DENMARK, AND FINLAND ARE MEMBERS OF THE EUROPEAN UNION