[Answered]What is the ‘Nordic Economic Model’? Do you think Nordic Economic Model can be a way forward for a sustainable future?

The Nordic Economic model also known as the Scandinavian model, is the combination of social welfare and economic system adopted by Nordic countries (Sweden, Norway, Finland, Denmark, and Iceland). It combines features of capitalism, such as a market economy with social benefits, such as state pensions and income distribution. Important features of the Nordic model include public provision of social services, investment in services associated with human capital, and a strong social safety net.

Why Nordic Economic Model as a way forward for a sustainable future?

1. High level of income: Sweden, Norway, Finland, and Denmark have a combination of high living standards. This has been achieved by high wages, better regulations of unions etc. A high level of income is must to ensure a sustainable future and growth.
2. Trust in government: The citizens have a high degree of trust in their government and a history of working together to reach compromises and address societal challenges through democratic processes. A higher trust in government enables a stable government that can work for the welfare of present and future generations.
3. Gender equality: Nordic countries emphasise on Gender equality resulting in a high degree of workplace participation by women. Female political representation is high. This is important as for a sustainable future, the role and involvement of women is very important as inclusive growth is one of the basis of sustainable development.
4. Focus on inequality: These countries also fare well on measures of inequality with Gini indices consistently ranking them among the most income-equal societies in the world. As Oxfam report highlighted, inequality is a big issue in developing nations. An effort to reduce inequality is important as it would ensure inclusive growth and less poverty.
5. Low unemployment rate: Low levels of unemployment are supported by high levels of engagement between trade unions, the government and employers. This results in a more engaged and democratic workforce. Thus, engagement with trade unions can help a government to create jobs and push the country towards a development path.

Issues related to Nordic Economic Model:

1. High taxes: Opponents of the Nordic model criticize the high taxes. They point out that the Nordic Model redistributes assets, limits the amount of money available for personal spending and consumption and encourages reliance on government-subsidized programs. A country like India can’t impose high tax on its citizens, where millions live under poverty.
2. Unsustainable future: If we look at carbon emissions per capita, some Scandinavian countries are ranked quite high. Norway is in 24^th place and Finland in 26^th, according to the US Department of Energy’s Carbon Dioxide Information Analysis Center (CDIAC).
3. High degree of government intervention: High degree of government intervention is a big drawback of Nordic model. India’s experience with high degree of government intervention is not good as it led to license raj in past.
4. High consumption: On the WWF’s scale of ecological impact across carbon, grazing land, cropland, fishing ground, forests and built-up land, Denmark, Finland, Norway and Sweden are all near the top of the chart, consuming considerably more than the world average of 2.7 gha per capita. Thus in the near future it might lead to a resource
5. Different economic base: While the conditions of salaried work are very important for people’s life satisfaction in Europe, unionisation won’t do much for people in countries where most people work in smallholder agriculture and the informal economy and are often at the sharp end of managing environmental resources and the effects of climate change brought about by consumption in rich countries.
6. Lesser population: In prosperity terms, they also enjoy the luxury of having relatively small, homogenous populations across which to spread their wealth.

Thus, it can be said that Nordic model might not work in other countries as the model of prosperity. In the future, there will have to be multiple models of prosperity based on individual circumstances, and the specifics of culture, history, economics and politics with everybody flourishing within their own context.