Finland-An Introduction

• Year of EU entry: 1995
• Political system: Republic
• Capital city: Helsinki
• Total area: 338 000 km²
• Population: 5.3 million
• Currency: euro

Finland, a country of forests and lakes, is perhaps best known for its unspoilt natural beauty. In the far north, the White Nights, during which the sun does not set, last for around 10 weeks of the summer. In winter the same area goes through nearly eight weeks when the sun never rises above the horizon.
As a result of Finland being a part of Sweden for seven centuries (from the 12th century until 1809) some 6% of the population is Swedish-speaking. Finland became an independent state following the Russian revolution in 1917. Since this date Finland has been a republic. It has a one-chamber parliament whose 200 members are elected every four years.
The country has developed a modern, competitive economy, and is a world leader in telecommunications equipment. Main exports include telecoms equipment and engineering products, paper, pulp and lumber, glassware, stainless steel and ceramics.
Its remote northern beauty has inspired many artists, including the composer Jean Sibelius and the designer Alvar Aalto. Finland has also produced a number of top sports stars, including Formula One drivers Mika Häkkinen and Kimi Räikkönen.
Finnish cuisine has been influenced by continental, Russian and Swedish food. Traditional specialities include fish (especially salmon and turbot roe), as well as reindeer meat. Dishes to look out for include karjalanpiirakka (rice or potato pastry) and kalakukko (fish and pork fat baked inside a loaf)

Geographical Profile
Area: 338,144 sq. km. (130,558 sq. miles); about the size of New England, New Jersey,
and New York combined.
Cities: Capital (December 2009)–Helsinki (pop. 583,350). Other cities–Espoo (244,330), Tampere (211,507), Vantaa (197,636), Turku (176,087).
Terrain: Low but hilly, more than 70% forested; 188,000 lakes and 179,584 islands, 98,050 of which are in the lakes.
Climate: Northern temperate.

Demography
Nationality: Noun–Finn(s). Adjective–Finnish.
Population (December 2009): 5.35 million.
Population growth rate (2009): 0.5%.
Ethnic groups: Finns, Swedes, Lapps, Sami, Roma, Tatars.
Religions: Lutheran 79.9%, Orthodox 1.1%.
Languages: Finnish 90.67%, Swedish 5.43% (both official); small Lapp- (0.03%) and Russian-speaking (0.97%) minorities.
Education: Years compulsory–9. Attendance–almost 100%. Literacy–almost 100%.
Health: Infant mortality rate–2.61,000 (2009). Life expectancy–males 76.5 yrs., females 83.2 yrs.
Work force (2.68 million; of which 2.46 million are employed): Public services–32%; industry–19%; commerce–15.9%; finance, insurance, and business services–14.5%; agriculture and forestry–4.5%; transport and communications–6.8%; construction–7.2%.

Government
Type: Constitutional republic.
Constitution: July 17, 1919; March 2000.
Independence: December 6, 1917.
Branches: Executive–president (chief of state), prime minister (head of government),
Council of State (cabinet). Legislative–unicameral parliament. Judicial–Supreme Court,
regional appellate courts, local courts.
Subdivisions: Six provinces, provincial self-rule for the Aland Islands.
Political parties: Social Democratic Party, Center Party, National Coalition (Conservative)
Party, Leftist Alliance, Swedish People’s Party, Green League, Christian Democrats, True
Finns.
Suffrage: Universal at 18.

Economy (2009)
GDP: $238.4 billion (EUR 170.9 billion).
GDP growth rate: -8.0%.
Per capita income: $44,668 (EUR 32,025).
Inflation rate: 0.0% (2009); 2.5% (November 2010).
Natural resources: Forests, minerals (copper, zinc, iron), farmland.
Agriculture, forestry, fishing and hunting (2.9% of GDP): Products–meat (pork and beef), grain (wheat, rye, barley, oats), dairy products, potatoes, rapeseed.
Industry (31.6% of GDP): Types–metal (including electronics and electrical equipment) and engineering, forest products, chemicals, shipbuilding, foodstuffs, textiles.
Trade: Exports–$62.6 billion. Major markets–EU 55.6%, Russia 9%, U.S. 7.8%, China 4.1%. Imports–$60.3 billion. Major suppliers–EU 56.4%, Russia 16.2%, China 7.9%, U.S. 3.4%.
Exchange rate (2009): 1.3948 euros (EUR) = U.S. $0.7169.

HISTORICAL HIGHLIGHTS

The origins of the Finnish people are still a matter of conjecture, although many scholars argue that their original home was in what is now west-central Siberia. The Finns arrived in their present territory thousands of years ago, pushing the indigenous Lapps into the more remote northern regions. Finnish and Lappish–the language of Finland’s small Lapp minority–both are Finno-Ugric languages and are in the Uralic rather than the Indo-European family.
Finland’s nearly 700-year association with the Kingdom of Sweden began in 1154 with the introduction of Christianity by Sweden’s King Eric. During the ensuing centuries, Finland played an important role in the political life of the Swedish-Finnish realm, and Finnish soldiers often predominated in Swedish armies. Finns also formed a significant proportion of the first “Swedish” settlers in 17th-century America.
Following Finland’s incorporation into Sweden in the 12th century, Swedish became the dominant language, although Finnish recovered its predominance after a 19th-century resurgence of Finnish nationalism. Publication in 1835 of the Finnish national epic, The Kalevala–a collection of traditional myths and legends–first stirred the nationalism that later led to Finland’s independence from Russia.
In 1809, Finland was conquered by the armies of Czar Alexander I and thereafter remained an autonomous grand duchy connected with the Russian Empire until the end of 1917. On December 6, 1917, shortly after the Bolshevik Revolution in Russia, Finland declared its independence. In 1918, the country experienced a brief but bitter civil war that colored domestic politics for many years. During World War II, Finland fought the Soviet Union twice–in the Winter War of 1939-40 and again in the Continuation War of 1941-44. This was followed by the Lapland War of 1944-45, when Finland fought against the Germans as they withdrew their forces from northern Finland.
During the Continuation War (1941-1944) Finland was a co-belligerent with Germany. However, Finnish Jews were not persecuted. Of the approximately 500 Jewish refugees who arrived in Finland, eight were handed over to the Germans, for which Finland submitted an official apology in 2000. Also during the war, approximately 2,600 Soviet prisoners of war were exchanged for 2,100 Finnish prisoners of war from Germany. In 2003, the Simon Wiesenthal Center submitted an official request for a full-scale investigation by the Finnish authorities of the prisoner exchange. It was established there were about 70 Jews among the extradited prisoners. However, none was extradited as a result of ethnic background or religious belief.
Treaties signed in 1947 and 1948 with the Soviet Union included obligations and restraints on Finland vis-a-vis the U.S.S.R. as well as territorial concessions by Finland; both have been abrogated by Finland since the 1991 dissolution of the Soviet Union (see Foreign Relations).

Parliament

Constitutionally, the 200-member, unicameral Eduskunta is the supreme authority in Finland. It may alter the constitution, bring about the resignation of the Council of State, and override presidential vetoes; its acts are not subject to judicial review. Legislation may be initiated by the president, the Council of State, or one of the Eduskunta members.
The Eduskunta is elected on the basis of proportional representation. All persons 18 or older, except military personnel on active duty and a few high judicial officials, are eligible for election. The regular parliamentary term is 4 years; however, the president may dissolve the Eduskunta and order new elections at the request of the prime minister and after consulting the speaker of parliament.

Judicial system

The judicial system is divided between courts with regular civil and criminal jurisdiction and special courts with responsibility for litigation between the public and the administrative organs of the state. Finnish law is codified. Although there is no writ of habeas corpus or bail, the maximum period of pretrial detention has been reduced to 4 days. The Finnish court system consists of local courts, regional appellate courts, a Supreme Court, and a Supreme Administrative Court.

Administrative divisions
As of January 1, 2010, Finland is divided into six Regional State Administrative Agencies; namely Etelä-Suomi, Itä-Suomi, Lounais-Suomi, Länsi- ja Sisä-Suomi, Pohjois-Suomi, Lappi) plus Åland – replacing the old division of six provinces . Finland has 20 regions, the regions are divided into 72 sub-regions and the sub-regions are divided into 342 municipalities. Fifteen Centers for Economic Development, Transport and the Environment (ELY Centers) form part of the government’s reform project for regional administration. The tasks and services of the former Employment and Economic Centers, Regional Environmental Centers, Road Districts, and State Provincial Offices’ departments for transport and communications and for education and culture have been pooled in the ELY Centers. They manage the regional implementation and development tasks of the state administration, and are tasked with promoting regional competitiveness, well-being and sustainable development, as well as curbing climate change.
The island province of Aland is located near the 60th parallel between Sweden and Finland. It enjoys local autonomy and demilitarized status by virtue of an international convention of 1921, implemented most recently by the Act on Aland Self-Government of 1951. The islands are further distinguished by the fact that they are entirely Swedish-speaking. Government is vested in the provincial council, which consists of 30 delegates elected directly by Aland’s citizens.

ECONOMY
Finland has a highly industrialized, free-market economy with a per capita output equal to that of other western economies such as France, Germany, Sweden, or the U.K. The largest sector of the economy is services (65.5%), followed by manufacturing and refining (31.6%). Primary production is at 2.9%.
The Finnish economy had made enormous strides since the severe recession of the early 1990s. Finland successfully joined the euro zone and outperformed euro-area partners in terms of economic growth and public finance. Following a period of sustained and robust growth, the Finnish economy suddenly slowed in the wake of the international financial crisis. GDP growth shrank from 0.9% in 2008 to -8% in 2009 (the sharpest contraction since Finland gained independence from Russia in 1917). Exports declined 32%, and unemployment climbed to 8.2%.
In 2010 the Finnish economy recovered from the 2009 financial crisis better than most forecasts predicted. GDP growth for 2010 is projected to be 3.2%, growth of 2.9% is projected for 2011 and 2.7% for 2012. The unemployment rate for 2010 is projected to be 8.4% and as the economy recovers forecasts predict a drop to 7.4% in 2012. At the end of 2010 the inflation rose to more than 2%. During 2011, inflation is expected to accelerate to 2.4%, mainly due to tax changes and international price pressures in the raw materials (Ministry of Finance estimates 12/20/2010).
Exports of goods and services contribute over 37.4% of Finland’s GDP. Metals and engineering (including electronics) and timber (including pulp and paper) are Finland’s main industries. The United States is Finland’s third most important trading partner outside of Europe. With a 3.4% share of imports in 2009, the United States was Finland’s ninth-largest supplier. Major exports from the United States to Finland continue to be machinery, telecommunications equipment and parts, metalliferous ores, road vehicles and transport equipment, computers, peripherals and software, electronic components, chemicals, medical equipment, and some agricultural products. The primary competition for American companies comes from Russia, Germany, Sweden, and China. The main export items from Finland to the United States are electronics, machinery, ships and boats, paper and paperboard, refined petroleum products, telecommunications equipment and parts. In 2009, the United States was Finland’s third-largest customer after the EU (55.6%), and Russia (9%). However, trade is only part of the totality: the 10 biggest Finnish companies in the United States have a combined turnover that is three times the value of Finland’s total exports to the United States. About 2.0% of the Finnish GDP comes from exports to the United States.

Except for timber and several minerals, Finland depends on imported raw materials, energy, and some components for its manufactured products. Farms tend to be small, but farmers own sizable timber stands that are harvested for supplementary income in winter. The country’s main agricultural products are dairy, meat, and grains. Finland’s EU accession has accelerated the process of restructuring and downsizing of this sector.

FOREIGN RELATIONS

Finland’s basic foreign policy goal from the end of the Continuation War with the U.S.S.R. in 1944 until 1991 was to avoid great-power conflicts and to build mutual confidence with the Soviet Union. Although the country was culturally, socially, and politically Western, Finns realized they must live in peace with the U.S.S.R. and take no action that might be interpreted as a security threat. The dissolution of the Soviet Union in 1991 opened up dramatic new possibilities for Finland and has resulted in the Finns actively seeking greater participation in Western political and economic structures. Finland joined the European Union in 1995.

Relations With the Soviet Union and With Russia
The principal architect of the post-1944 foreign policy of neutrality was J.K. Paasikivi, who was President from 1946 to 1956. Urho Kekkonen, President from 1956 until 1981, further developed this policy, stressing that Finland should be an active rather than a passive neutral. This policy is now popularly known as the “Paasikivi-Kekkonen Line.”
Finland and the U.S.S.R. signed a peace treaty at Paris in February 1947 limiting the size of Finland’s defense forces and providing for the cession to the Soviet Union of the Petsamo area on the Arctic coast, the Karelian Isthmus in southeastern Finland, and other territory along the former eastern border. Another provision, terminated in 1956, leased the Porkkala area near Helsinki to the U.S.S.R. for use as a naval base and gave free access to this area across Finnish territory.

The 1947 treaty also called for Finland to pay to the Soviet Union reparations of 300 million gold dollars (amounting to an estimated $570 million in 1952, the year the payments ended). Although an ally of the Soviet Union in World War II, the United States was not a signatory to this treaty because it had not been at war with Finland.

In April 1948, Finland signed an Agreement of Friendship, Cooperation, and Mutual Assistance with the Soviet Union. Under this mutual assistance pact, Finland was obligated–with the aid of the Soviet Union, if necessary–to resist armed attacks by Germany or its allies against Finland or against the U.S.S.R. through Finland. At the same time, the agreement recognized Finland’s desire to remain outside great-power conflicts. This agreement was renewed for 20 years in 1955, in 1970, and again in 1983 to the year 2003, although the subsequent dissolution of the Soviet Union led to the agreement’s abrogation.

The Finns responded cautiously in 1990-91 to the decline of Soviet power and the U.S.S.R.’s subsequent dissolution. They unilaterally abrogated restrictions imposed by the 1947 and 1948 treaties, joined in voicing Nordic concern over the coup against Soviet leader Mikhail Gorbachev, and gave increasing unofficial encouragement to Baltic independence.
At the same time, by replacing the Soviet-Finnish mutual assistance pact with treaties on general cooperation and trade, Finns put themselves on an equal footing while retaining a friendly bilateral relationship. Finland now is boosting cross-border commercial ties and touting its potential as a commercial gateway to Russia. It has reassured Russia that it will not raise claims for Finnish territory seized by the U.S.S.R. and continues to reaffirm the importance of good bilateral relations.

Multilateral Relations
Finnish foreign policy emphasizes its participation in multilateral organizations. Finland joined the United Nations in 1955 and the EU in 1995. As noted, the country also is a member of the North Atlantic Treaty Organization’s (NATO) Partnership for Peace as well as a member in the Euro-Atlantic Partnership Council. As a NATO partner, Finland has 178 military troops and 39 civil crisis management experts in Afghanistan (November 2010) serving with a Swedish-led Provincial Reconstruction Team in the province of Mazar-e-Sharif, working to create a secure environment for reconstruction in northern Afghanistan.

Finland is well represented in the UN civil service in proportion to its population and belongs to several of its specialized and related agencies. Finnish troops have participated in UN peacekeeping activities since 1956, and the Finns continue to be one of the largest per capita contributors of peacekeepers in the world. Finland is an active participant in the Organization for Security and Cooperation in Europe (OSCE) and in early 1995 assumed the co-chairmanship of the OSCE’s Minsk Group on the Nagorno-Karabakh conflict. Finland chaired the OSCE in 2008 and was part of the Chairmanship Troika in 2009.

Cooperation with the other Scandinavian countries also is important to Finland, and it has been a member of the Nordic Council since 1955. Under the council’s auspices, the Nordic countries have created a common labor market and have abolished immigration controls among themselves. The council also serves to coordinate social and cultural policies of the participating countries and has promoted increased cooperation in many fields.

In addition to the organizations already mentioned, Finland became a member of the following organizations: Bank for International Settlements, 1930; International Monetary Fund, 1948; International Bank for Reconstruction and Development, 1948; General Agreement on Tariffs and Trade (GATT), 1950; International Finance Corporation, 1956; International Development Association, 1960; European Free Trade Association, 1961; Asian Development Bank, 1966; Organization for Economic Cooperation and Development, 1969; Inter-American Development Bank, 1977; African Development Bank, 1982; Multilateral Investment Guarantee Agency, 1988; the Council of Europe, 1989; European Bank for Reconstruction and Development in Central and Eastern Europe, 1991; World Trade Organization, 1995; and INTELSAT, 1999. Finland entered Stage Three of EMU (the European Monetary Union) in 1999. All the Nordic countries, including Finland, joined the Schengen area in March 2001.

INDIA-FINLAND RELATIONS
Finland and India have traditionally enjoyed warm and friendly relations. In the recent past, there has been a perceptible increase in the level of engagement, both political and commercial, which saw the exchange of the visit of the Prime Ministers of the two countries during the same calendar year (2006). This was followed by a visit by the President of Finland Mrs. Tarja Halonen in January 2007 and February 2009 and Finnish Prime Minister Mr. Matti Vanhanen visited India in February 2008 and February 2010, to attend the Delhi Sustainable Development Summit organized by TERI. Bilateral discussions were also held during the visits.

Finland sees in India a large market for its products and a favourable investment destination for its high technology industries whereas India views Finland as an important member of the EU and a repository of modern technology. India has also proved to be an attractive alternative to China for its trade and investments given common traditions of democracy, rule of law and freedom of press.

Bilateral Agreements:
India and Finland have the following agreements:

1. Trade Agreement (1967). Modified Economic Cooperation Agreement (March 2010).
2. Agreement on Avoidance of Double Taxation (1983) – Amended in January 2010.
3. Setting up of the India-Finland Joint Commission (1974) (16 meetings of the Joint Commission have taken place upto October 2009)
4. Cultural Agreement (1983)
5. MOU on Textiles (1993)
6. Air Services Agreement (1995), modified in May 2006.
7. Bilateral agreement on Promotion & Protection of Investments (2002).
8. Agreement for Cooperation in the Fields of Science & Technology (2008).
9. MoU on Information Security Janaury 2010

Indo-Finnish Bilateral Trade: Indo-Finnish bilateral trade in 2008 was valued at Euro 748.73 million, an increase of 16% over the previous year. India’s exports during 2008 grew by 14.6% over the previous year and were valued at Euro 219.49 million. Imports from Finland have also been growing rapidly and registered a growth of 16.7% in 2008 over the previous year and were to reach Euro 529.24 million.

Even though the balance of trade is in favour of Finland, the following points are noteworthy:

1. A number of Indian IT firms are functioning in Finland and their revenues are not reflected in bilateral trade figures.
2. India’s imports from Finland, especially sophisticated industrial machinery are contributing to industrial development, economic growth and export potential in India.
3. With free movement of trade and services within the EU, imports by Finland from third countries through agents and wholesalers in Europe especially Germany and The Netherlands are not accounted for in bilateral trade figures. Some Finnish firms have been sourcing Indian textiles and garments from European agents which are not reflected in bilateral trade figures.

Investment: On the investments side, large Finnish companies like Nokia, Kone elevators, Wartsila and Elcoteq have set up manufacturing facilities in India. Over 80 Finnish companies now have operations in India and 30 Indian companies, mainly in the software and consultancy sector are working in Finland.

Tourism: The favoured Finnish tourist destinations in India are Goa and Kerala though other destinations are also becoming increasingly popular. With the commencement of direct Finnair flights from Helsinki to New Delhi, it is expected that tourism from Finland to India and from India to Finland would increase dramatically. The number of visas issued by this Mission which more than doubled from 11,574 in 2004 to 30,667 in 2007 reflects this trend. The number came down to 20,340 in 2009 due to global recession. Finland is now included in list of six countries for which visa on arrival facility has extended with effect from 1st January, 2010.

During the winter months (October-March) Finnair operates two to three charter flights a week to Goa, depending on the demand.

Indians in Finland: There are about 2000 Indians in Finland. Majority of the Indian community live in the capital Helsinki and the surrounding regions. Finland has not been a favoured destination for illegal immigrants from India due to harsh weather and language difficulties.

Majority of the Indians who have settled in Finland are from Punjab. They are mainly engaged in the restaurant business. There are dozens of restaurants serving western food but owned by Indians/PIOs and some restaurants serve Indian food. Indian food has now become popular among locals. Some deal in garments, textiles, artificial jewelry, Indian provisions and groceries and gift items..

In recent years, a number of young Indians, mainly computer professionals, have joined Finnish high-tech companies such as Nokia, etc. Presently there are about 400 Indian professionals working in Finland for Finnish high-tech companies and Indian software companies.
There are also a small number of Indian/PIO academics working in Finnish universities. The number of Indian students at Finnish universities has grown in recent years and currently about 350 Indian students are pursuing higher education in Finland.

Important visits from Finland to India

Important visits from India to Finland

(Courtesy: Government of India, Ministry of External Affairs)