Economy of Denmark
Public sector employment (full-time and part-time) has been relatively steady at more than 800,000 a year this first decade, making up around 38% of total full-time (28% of full-time and part-time) employment[24], whereas private sector employment has risen by over 300,000 since the 1990s to slightly over 2 million in 2007 (full-time and part-time).[25]With the information based partly on payments to the Arbejdsmarkedets Tillægspension pension fund of all employees and insured but unemployed members of an unemployment fund in Denmark, full-time employment is calculated at over 2.3 million persons in the third quarter of 2007. The increase in the fourth quarter from a year ago in the number of employed persons was 1.0% and the amount of hours worked was 2.9% higher.[26]Productivity increased at an average of 2.3% a year in 2004, 2005 and 2006, recently being revised upward from an average of just 0.9% and previously with a too high employment level estimated.[27] The upward revision is good, because a high wage economy like Denmark's with very few valuable natural resources needs to be highly productive, or efficient, and innovative to compete with other countries for a market share in the global economy. However, according to OECD, the distortions imposed by a combined marginal tax wedge of 70% (60% income tax plus 25% VAT, not counting elevated excise duties on certain goods) are hurting productivity and in turn the country's competitiveness[28].
[
Public Sector Reform
To gain synergies through economies of scale (critical mass) (greater professional and financial sustainability) and big item discounts and to offer a wider array of services closer to the public (be a one-stop place of access to the public sector not unlike the unitary councils), it was deemed necessary to merge the municipalities and other administrative entities in the public sector. This would also help alleviate the financial problems of depopulation due to limited job opportunities, high unemployment and aging and make introduction of new information technology more affordable[29] Mainly from 1 January 2007, the new center-right government streamlined the public sector extensively by decreasing the number of administrative units drastically in the different tiers of government, i.e. in the number of city court circuits (from 82 to 24), police districts (from 54 to 12)[30], tax districts (before 2007 the responsibility of the municipalities;after that part of the central government Ministry of Taxation), reshuffling tasks among the three government levels and abolished the counties in Kommunalreformen ("The Municipal Reform" of 2007), thereby reducing the number of local and regional politicians by almost half to 2,522 (municipal councillors) (council elections November 2005) (1978: 4,735;1998: 4,685; reduced somewhat in council elections November 2001 (Bornholm)) and 205 (regional councillors) (1998: 374)[31] respectively. Before 1970 (a previous reform in effect from 1 April that year) the number of councillors (both categories) was around 11,000[32]in around 1,000 parish municipalities (sognekommuner), being supervised by their county, and market city municipalities (købstadskommuner), the latter numbering 76 (81 including Bornholm whose county as an exception supervised the county's city municipalities) and not being part of a county but being supervised by the Interior Ministry. This distinction (having independent municipalities) ending (except for Copenhagen, Frederiksberg and Bornholm (2003-06)) with the reform of 1970, the term municipality (kommune) replaced the previous two terms, which are now never used except for historical purposes. The number of municipalities had been reduced when during the period from April 1962 to 1966 398 municipalities merged to form 118 voluntarily. The number of municipalities peaked in the 1930s and was 1386 in 1962.[33] Many of the 275 municipalities after 1 April 1974 built large city halls to consolidate the administration and thus changed the cityscape of Denmark and also consolidated other municipal enterprises and the purchase of goods and services from the private sector, as will some of the present 98 municipalities over time.TV2(Denmark) reported 24 September 2007, that SKI, a mutual purchasing service company for central government, regions, and municipalities, made purchases of 140 billion DKK (almost 9% of GDP) of goods and services in bulk every year, prompting private sector companies to complain over razorthin profit margins and that for instance innovative (but expensive) products and energy efficiency sometimes were better than a very low price.
[
Greenland and the Faroe Islands
- Main articles: Economy of the Faroe Islands and Economy of Greenland
Greenland suffered negative economic growth in the early 1990s, but since 1993 the economy has improved. A tight fiscal policy by the Greenland Home Rule Government since the late 1980s helped create a low inflation rate and surpluses in the public budget, but at the cost of rising foreign debt in the Home Rule Government's commercial entities. Since 1990, Greenland has registered a foreign trade deficit.
Following the closure of Greenland's last lead and zinc mine in 1989, Greenland's economy is solely dependent on the fishing industry and financial transfers from the Danish central government. Despite resumption of several interesting hydrocarbon and mineral exploration activities, it will take several years before production will begin. Greenland's shrimp fishery is by far the largest source of income, since cod catches have dropped to historically low levels. Tourism is the only sector offering any near-term potential, and even this is limited due to the short season and high costs. The public sector plays a dominant role in Greenland's economy. Grants from mainland Denmark and EU fisheries payments make up about one-half of the home-rule government's revenues.
The Faroe Islands also depend almost entirely on fisheries and related exports. Without Danish Government bailouts in 1992 and 1993, the Faroese economy would have gone bankrupt. Since 1995, the Faroese economy has seen a noticeable upturn, but remains extremely vulnerable. Recent off-shore oil finds close to the Faroese area give hope for Faroese deposits, too, which may form the basis for an economic rebound over the longer term.
[
Economy - overview
This thoroughly modern market economy features high-tech agriculture, up-to-date small-scale and corporate industry, extensive government welfare measures, comfortable living standards, and high dependence on foreign trade. Denmark is a net exporter of food. The center-left coalition government (1993-2001) concentrated on reducing the unemployment rate and turning the budget deficit into a surplus, as well as following the previous government's policies of maintaining low inflation and a current account surplus. The coalition also committed itself to maintaining a stable currency. The coalition lowered marginal income tax rates while maintaining overall tax revenues; boosted industrial competitiveness through labor market and tax reforms, increased research and development funds. The availability and duration of arbejdsløshedsdagpenge (unemployment benefit) has been restricted to four years and because of rapidly rising prices on housing this has led to an increase in poverty from below 4% in 1995 to 5% in 2006 according to the Danish Economic Council [18]. Despite these cuts, the part of the public sector in Denmark which provides the public sector administration and direct service to the public - nursing institutions for the young or old, hospitals, schools, police, etc. - has risen from 25.5% of GDP during the former government to 26% today and is projected to be at 26.5% in 2015 if current policies continue [19].
Denmark chose not to join the 11 other European Union members who launched the euro on 1 January 1999. Especially from 2006, economists and political pundits have expressed concern that the lack of skilled labor will result in higher pay increases and an overheating of the economy, which would repeat the boom-and-bust cycle in 1986, when government introduced a tax reform and restricted the private loan market because of a record balance-of-payments deficit. As a consequence, the trade balance showed a surplus in 1987, and the balance-of-payments in 1990 (first surplus since 1963). They have remained in surplus since, except for the balance of payments in 1998.
[
GDP
Table showing selected PPP GDPs and growth - 2002 to 2007 est.:
| Year | GDP in billions of USD PPP |
% GDP Growth |
|---|---|---|
| 2002 | 166.876 | 0.5 |
| 2003 | 170.798 | 0.7 |
| 2004 | 178.477 | 2.4 |
| 2005 | 187.721 | 3.1 |
| 2006 | 195.581 | 3.2 |
| 2007 | 212.404 | 1.8 |
[
See also
[
Footnotes
- ^ a b (Danish)Lidt lavere prisstigninger i 2007 end året før.. Statistics Denmark.
- ^ a b (Danish)Ledigheden faldt til under 50,000 fuldtidspersoner. Statistics Denmark.statistikbanken.dk Tables aua01+auf01+02+aus01+02+aup03+01
- ^ [1]Human Development Report 2007/2008
- ^ [2]List of countries by Human Development Index
- ^ (Danish)[3]Finance Ministry:Income development and distribution in Denmark 1983-2005 (with PDF-file)
- ^ Flexicurity
- ^ [4] Cabinet of Poul Nyrup Rasmussen
- ^ (Danish)Moderat vækst i BNP trods kraftig forbrugsvækst.. Statistics Denmark.
- ^ [5]Denmark wins highest tax competition
- ^ [6]2007European Pensions Barometer.
- ^ [7]Beskæftigelsesindikator på grundlag af ATP-indbetalinger.
- ^ [8]Denmark wins highest tax competition
- ^ [9]Sammensat marginalskat i DK
- ^ [10]OECD Economic survey of Denmark 2008
- ^ [11]OECD Economic Outlook 82
- ^ Employment ministry;early retirement pay
- ^ Statistikbanken.dk/ab703 (2007Q4)
- ^ Economic Council, spring 2008 report. English Summary, p. 4
- ^ http://www.statistikbanken.dk tables NAT01 + OFF12
- ^ (Danish)[12]Tax burden in first place
- ^ (Danish)[13]Fortsat store offentlige overskud (25 March 2008)
- ^ Statistikbanken.dk Tables edp3 and edp4
- ^ (Danish)[14] EMU-debt and budgets 2004-07(3 April 2008)
- ^ Statistikbanken.dk Table BESK 11
- ^ (Danish)Danske Bank:Nordisk/Skandinavisk økonomi, different editions.
- ^ (Danish)Stadig flere præsterede arbejdstimerStatistikbanken.dk Tables BESK 11+12+13
- ^ (Danish)Markant opjustering af dansk produktivitetsvækst (17. januar 2008)
- ^ [15] OECD Economic Survey of Denmark 2008
- ^ (Danish)http://www.dr.dk/mitdanmark/da/forside/ A TV series on the municipal reform.
- ^ (Danish)[16] New police districts and local court circuits with links to maps
- ^ (Danish)Den Store Danske Encyklopædi + Supplement 2, "kommunalvalg". Gyldendal. 1994 + 2006. ISBN 87-7789-045-0 and ISBN 87-0204-192-8 Councillors
- ^ (Danish)Ove Hansen: Sådan styres kommunen. AOF/Fremad. 1978. ISBN 87-7403-131-7 Number of councillors
- ^ (Danish)[17] The local administration 1660-2007; Historiske kort (History maps); Vælg et årstal (Select a year).
[
References
- Press release Statistics Denmark August 2007:(Almost all)Electronic publications become free of charge(Danish)
- Statistics Denmark Statistics free of charge
- Statistical Yearbook 2007 PDF-files free of charge
- Short cut to press releases/verbal explanations on released statistics(Danish)
- Central Bank
- Dansk Arbejdsgiverforening Confederation of Danish Employers
- Landsorganisationen i Danmark The Danish Confederation of Trade Unions
- Anvendt Kommunal Forskning Danish Institute of Governmental Research
- The Danish National Centre for Social Research
- De økonomiske Råds sekretariat Danish Economic Councils
- Economic Council of the Labour Movement
- CEPOS Think Tank for a liberal economy and limited Government etc.
- Economic History Services Encyclopedia: Denmark
[
External links
- OECD's Denmark country Web site and OECD Economic Survey of Denmark
- IMF Country Report
- Bureau of Public Affairs, U.S. Department of State, country overview for Denmark
- Google news Denmark
|
||||||||
|
|||||
|
|||||||||||
|
|||||||||||||||||||||||||||||||||||||||||
For more information review our copyright contact and privacy policy.