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Background
Finland is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden on the west, Norway on the north and Russia on the east, while Estonia lies to its south across the Gulf of Finland. The capital city is Helsinki.
Around 5.4 million people reside in Finland, with the majority concentrated in the southern part of the country. It is the eighth largest country in Europe in terms of area and the most sparsely populated country in the European Union. The native language of nearly all of the population is Finnish. The language is one of only four official EU languages not of Indo-European origin. The second official language of Finland - Swedish - is the native language of 5.5% of the population. Finland is a parliamentary republic with a central government based in Helsinki and local governments in 342 municipalities. A total of about one million residents live in the Greater Helsinki area (which includes Helsinki, Espoo, Kauniainen and Vantaa), and a third of the country's GDP is produced there. Other major cities include Tampere, Turku, Oulu, Jyväskylä, Kuopio and Lahti.
Finland has been ranked the second most stable country in the world, in a survey based on social, economic, political and military indicators. It was a relative latecomer to industrialization, remaining a largely agrarian country until the 1950s. Thereafter, economic development was rapid, and the country reached the world's top income levels in the 1970s. Between 1970 and 1990, Finland built an extensive welfare state. In the aftermath of the country's severe depression in the early 1990s, successive governments have changed the Finnish economic system through some privatisation, deregulation and tax cuts.
Finland is well placed in many international comparisons of national performance such as the share of high-technology manufacturing and health care. The country is ranked 1st in the 2009 Legatum Prosperity rating, which is based on economical performance and quality of life.
Politics
The Constitution of Finland defines the political system. Finland is a representative democracy with a semi-presidential parliamentary system. Aside from state-level politics, residents use their vote in municipal elections and in the European Union elections.
According to the Constitution, the President of Finland is the head of state and responsible for foreign policy (which excludes affairs related to the European Union) in cooperation with the cabinet. Other powers include Commander-in-Chief, decree, and appointive powers. Direct vote is used to elect the president for a term of six years and maximum two consecutive terms. The current president is Tarja Halonen (SDP).
Since equal and common suffrage was introduced in 1906, the parliament has been dominated by the Centre Party (former Agrarian Union), National Coalition Party and Social Democrats, which have approximately equal support and represent 65-80% of voters. After 1944 Communists were a factor to consider for a few decades. The relative strengths of the parties vary only slightly in the elections because of the proportional election from multi-member districts, but there are some visible long-term trends. The autonomous Åland islands has separate elections, where Liberals for Åland was the largest party in 2007 elections.
Economic overview
Finland has a highly industrialized free-market economy with a per capita output equal to that of other European economies such as France, Germany, Belgium or the UK. The largest sector of the economy is services at 65.7%, followed by manufacturing and refining at 31.4%. Primary production is 2.9%. With respect to foreign trade, the key economic sector is manufacturing. The largest industries are electronics (21.6%), machinery, vehicles and other engineered metal products (21.1%), forest industry (13.1%) and chemicals (10.9%). Finland has timber and several mineral and freshwater resources. Forestry, paper factories, and the agricultural sector (on which taxpayers spend around 3 billion euros annually) are politically sensitive to rural residents. The Greater Helsinki area generates around a third of GDP. In a 2004 OECD comparison, high-technology manufacturing in Finland ranked second largest after Ireland. Knowledge-intensive services have also ranked the smallest and slow-growth sectors - especially agriculture and low-technology manufacturing - second largest after Ireland. Overall short-term outlook was good, and GDP growth has been above many EU peers. Inflation has been low, averaging 1.8% between 2004 and 2006.
Finland is highly integrated in the global economy, and international trade is a third of GDP. The European Union makes 60% of the total trade. The largest trade flows are with Germany, Russia, Sweden, United Kingdom, United States, 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.
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As of 2006, 2.4 million households reside in Finland. The average size is 2.1 persons; 40% of households consist of a single person, 32% two persons and 28% three or more persons. Residential buildings total 1.2 million and the average residential space is 38 m2 per person. The average residential property without land costs 1,187 euro per sq metre and residential land 8.6 euro per sq metre. 74% of households had a car. There are 2.5 million cars and 0.4 million other vehicles. Around 92% have a mobile phone and 83.5% (2009) Internet connection at home. The average total household consumption was 20,000 euro, out of which housing consisted of about 5500 euro, transport about 3000 euro, food and beverages excluding alcoholic at around 2500 euro, recreation and culture at around 2000 euro.[73] Purchasing power-adjusted average household consumption is about the same level as it is in Germany, Sweden and Italy.[64] According to Invest in Finland, private consumption grew by 3% in 2006 and consumer trends included durables, high quality products, and spending on well-being.
Transportation
Helsinki-Vantaa Airport is the largest and busiest airport in Helsinki Metropolitan Area and the whole of Finland.The main international passenger gateway is Helsinki-Vantaa Airport with over 13 million passengers in 2008. Oulu Airport is the second largest and around 25 airports have scheduled passenger services. The Helsinki-Vantaa based Finnair, Blue1 and Finncomm Airlines sell air services both domestically and internationally, and there are many others offering direct flights around the world. Helsinki has an optimal location for great circle routes between Western Europe and the Far East. Despite low population density, taxpayers spend annually around 350 million euro in maintaining 5,865 kilometres (3,644 mi) railway tracks even to many rural towns. Only one rail company operates in Finland, VR Group, which has 5% passenger market share (out of which 80% are urban trips in Greater Helsinki) and 25% cargo market share. Helsinki has an urban rail network.
The majority of international cargo utilizes ports. Port logistics prices are low. Vuosaari harbour in Helsinki is the largest container port after completion in 2008 and others include Hamina, Hanko, Pori, Rauma, Oulu. There is passenger traffic from Helsinki and Turku, which have ferry connections to Tallinn, Mariehamn and Stockholm. The Helsinki-Tallinn route, one of the busiest passenger sea routes in the world[citation needed], has also been served by a helicopter line.
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