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Business and economy - Embassy of Finland, Kuala Lumpur : Business in Finland

EMBASSY OF FINLAND, Kuala Lumpur

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Business and economy

Finnish economy

Ponsse_Copyright © UPM-Kymmene CorporationIn the half century followed by World War II, the
Finns made a remarkable transformation from a farm/forest economy to a diversified modern industrial economy; per capita income is now
among the highest in Western Europe. A member of the European Union since 1995, Finland was the only Nordic state to join the euro system at its initiation in January 1999.

Finland has a highly industrialized, largely free-market economy. Its key economic sector is manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Trade is important; exports equal nearly two-fifths of GDP. Finland excels in high-tech exports, e.g., mobile phones. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population.

The success of the Finnish economy can be highlighted with the few following examples. Finland is:

  • One of the most competitive economies in the world, WEF Global Competitiveness Report 2008-2009
  • The least corrupt country in the world, Transparency International
  • Ranked best in the Environmental Sustainability Index, WEF
  • Europe's top educational system, IMD World Competitiveness Yearbook 2006
  • Ranked best in knowledge transfer between universities and companies, IMD 2006
  • Top in the OECD's PISA study of learning skills among 15-year-olds
  • Number three globally in R&D spending per capita

Over the past five years the Finnish economy has grown at an average rate of 4.5% per year, with developments generally balanced. Inflation has remained low, real interest rates have fallen and the current account has maintained a surplus. Thanks to falling unemployment rates and the government surplus, these elements of disequilibrium in the economy have also eased. However, it is clear that global economic slowdown will affect also Finland.

The largest sector of the Finnish economy is services at 65.7 percent, followed by manufacturing and refining at 31.4 percent. Primary production is at 2.9 percent. With respect to foreign trade, the key economic sector is manufacturing. The largest industries are electronics (21.6 percent), machinery, vehicles and other engineered metal products (21.1 percent), forest industry (13.1 percent), and chemicals (10.9 percent). Finland has timber and several mineral and freshwater resources.

Finland is highly integrated in the global economy and exports account for 40% of the country’s gross domestic product (GDP), and foreign trade is an integral part of business culture. The European Union makes 60 percent of the total trade. The largest trade flows are with Germany, Russia, Sweden, United Kingdom, USA, Netherlands and China. Trade policy is managed by the European Union, where Finland has traditionally been among the free trade supporters, except for agriculture. Finland is the only Nordic country to have joined the Eurozone

In addition to the domestic market, the nearest markets (northern continental Europe, the UK, Scandinavia, the Baltic countries, and those parts of Russia bordering Finland) have a population of about 250 million. Finland’s strengths in working with these countries are logistics, cultural knowledge, language skills, and experience in venture capital operations.

Sustainable development

Finland has been one of the leading countries in the international benchmark studies measuring environmental sustainability and economic growth. The National Strategy for Sustainable Development was adopted in 2006 by the Government and a large variety of societal actors, which has guaranteed the wide promotion and implementation of the proposals of the strategy. A national programme to promote sustainable consumption and production has been largely implemented and put into action. A National Climate and Energy Strategy was revised in 2008 and many other sector strategies and programmes are under revision.

The booklet " Best practices from Finland 2009" presents practices reflecting the current themes of the United Nations Commission for Sustainable Development – agriculture, rural development, land, drought, desertification and Africa.

pdfBest practices from Finland 2009

Trade between Malaysia and Finland

In the past few years, trade between Malaysia and Finland has increased mainly 10-30 percent yearly for both export and import until 2008. In 2007, exports from Malaysia to Finland exceeded 0,6 % of Finland’s total imports, being 357 million euros. Imports to Malaysia were 199 million euros, 0,3 % of Finland’s total exports. Exports from Finland to Malaysia increased 14 % from the previous year. However, in 2008 the global economic slowdown started to affect also the trade between Malaysia and Finland. Value of the exports from Finland to Malaysia was 164 million euros (0,3% of all the exports) and imports from Malaysia to Finland 292 million euros (0,5% of Finland's total imports).

Nokia handphone_Copyright © Nokia 2009Most important export goods from Finland to Malaysia in 2008 were chemicals and related products, basic manufactures made from paper, paperboard, iron and steel, and electric machinery and parts. Most significant import products were electric machinery, crude rubber and furniture. Part of the trade between Finland and Malaysia is transit trade via Singapore. This trade is not registered in the statistics of Finnish customs. Service sector including e.g. consulting and software is a growing sector in the bilateral trade relations between Malaysia and Finland. Already more than 40 Finnish companies are represented in Malaysia.

 

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Updated 11/19/2009


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