Trade in agricultural commodities, consumer products,
and
services had been relatively limited, but exchanges with
the
outside world were crucial for industry. Not only had the
forest
industries grown largely in response to foreign demand for
wood
and paper, but the metal-working industry had also taken
off only
under the goad of postwar reparations deliveries to the
Soviet
Union. By the mid-1980s, exports accounted for half of all
industrial output and for as much as 80 percent of the
output of
the crucial forest industries. Similarly, imports of
energy, raw
materials, and investment goods remained essential for
industrial
production. The development of export-oriented industries
had
driven Finland's postwar structural transformation,
indirectly
affecting the rest of the economy. Industrial
competitiveness
would largely determine the economy's overall health into
the
1990s.
During the postwar period, Finnish exports shifted from
lumber and other raw materials to increasingly
sophisticated
products, a change which reflected the increasing
diversification
of the country's economic structure. The forest industries
continued to dominate exports, but, while they had
accounted for
about 85 percent of total exports in 1950, they accounted
for
only 40 percent by the mid-1980s. The relative shares of
different forest exports also shifted. Sawn timber and
various
board products accounted for more than one-third of total
exports
in 1950, but by 1985 they had fallen to only 8 percent.
Exports
of pulp and paper fell more gradually during the same
period,
from 43 percent of exports to about 30 percent. Pulp and
cardboard, the main exports of the chemical
wood-processing
branch, declined in importance, while specialized paper
products
incorporating higher value added, such as packing
material,
printed paper, and coated paper, grew in importance.
Taking the place of forest products, exports of metal
products grew rapidly during the postwar period from a
little
over 4 percent of exports to about 28 percent. Here, too,
exports
of more sophisticated manufactured goods grew faster than
those
of basic products. By the late 1980s, basic metals
accounted for
about 20 percent of metal exports, ships for about 25
percent,
and machinery and equipment for about 20 percent. Advanced
products such as electronics and process-control equipment
were
gaining on conventionally engineered products. The
chemical
industry had exported relatively little until the 1970s,
but by
1985 it had grown to account for about 12 percent of
exports. By
contrast, the textile, confectionery, and leather goods
industries had peaked at over 10 percent in the late 1970s
and
early 1980s, and then they had fallen to about 6 percent
of
exports by the mid-1980s. Minor export sectors included
processed
foods, building materials, agricultural products, and
furs.
Up to the 1970s, Finland tended to export wood-based
products
to the West, and metal and engineering products to the
East. By
the mid-1980s, however, Finnish machines and
high-technology
products were also becoming competitive in Western
markets.
Finland's imports had consisted primarily of raw
materials,
energy, and capital goods for industrial production, and
in the
late 1980s these categories still accounted for roughly
twothirds of all imports. The commodity structure of imports
responded both to structural changes in domestic
production and
to shifts in world markets. Thus, the heavy purchases of
raw
materials, energy, and capital goods up until the
mid-1970s
reflected Finland's postwar industrial development, while
the
subsequent period showed the influences of unstable world
energy
prices and Finland's shifts toward high-technology
production.
Imports of investment goods climbed from about 15 percent
in 1950
to almost 30 percent in the late 1960s and early 1970s,
only to
fall again by the 1980s to about 15 percent. Foodstuffs
and raw
materials for the textile industry accounted for about
half of
all raw material imports during the 1950s, but by the
1980s
inputs for the chemical and metal-processing industries
took some
75 percent of raw material imports. World energy prices
had
strongly influenced Finnish trade because the country
needed to
import about 70 percent of its energy. After rising slowly
until
the early 1970s, the value of oil imports had jumped to
almost
one-third of that of total imports in the mid-1970s, then
had
fallen with world oil prices to about 13 percent by the
late
1980s.
Like its export markets, Finland's import sources were
concentrated in Western Europe and the Soviet Union (see
table 19, Appendix A). The country usually obtained raw
materials,
especially petroleum, from the East and purchased capital
goods
from the West.
Finnish service exports had exceeded service imports
until
the early 1980s. Up until this time, shipping and tourism
earnings had generally exceeded interest payments to
service the
national debt. In the mid-1980s, however, the balance was
reversed as the earnings of the merchant marine declined
and
Finns began to spend more on tourism abroad. Although
Finnish
businesses tried to compete in these labor-intensive
sectors, the
country's high wage levels made shipping and tourism
difficult to
export.
Like other Nordic countries, Finland's trade was
concentrated
in the Nordic area and in Europe. Unlike the others,
however,
Finland had, as its most important trading partner, the
Soviet
Union. During the postwar years, trade with the Soviets
had
expanded and contracted in response to political
developments and
market forces. During the immediate postwar period, the
Soviet
share of Finland's trade, spurred by reparations payments,
rose
to over 30 percent. However, the following two decades saw
this
share gradually decline as Finland expanded exports to
Western
Europe. A second cycle began after the 1973 oil crisis,
when
recession in Western markets cut demand for Finnish
products
while the increased value of Soviet oil deliveries to
Finland
allowed expanded exports to the East. Finnish exports to
the
Soviet Union rose sharply during the years after 1973,
only to
fall--along with world petroleum prices--by 1986.
By the late 1980s, the geographical distribution of
Finland's
trade was moving back to the pre-1973 pattern. In 1986,
for
example, although the Soviet Union continued to be
Finland's
single largest trade partner, trade with West European
countries,
which together accounted for about 61 percent of Finnish
trade,
was much more important than trade with the Soviet Union.
Finland's main trade partners in Western Europe were
Sweden,
which took the biggest share of Finnish exports, and the
Federal
Republic of Germany (West Germany), which supplied the
largest
slice of Finnish imports. East European countries other
than the
Soviet Union accounted for only slightly over 2 percent of
trade.
Non-European countries were responsible for some 19
percent of
trade. The United States, Finland's main non-European
trade
partner, accounted for over 5 percent of Finnish exports
and
imports in 1987.
As in many small European countries, the postwar trade
policy
of Finland had been to pursue free trade in industrial
products
while protecting agriculture and services. During the
1980s,
strict quotas still blocked imports of most agricultural
commodities (except for tropical products that could not
be
produced domestically), but liberalized regulations
allowed
increased imports of services, especially financial
services.
Most industrial imports and exports were free of
surcharges,
tariffs, and quotas under multilateral and bilateral
agreements
between Finland and its major trading partners
(see Regional Economic Integration
, this ch.). Health and security
concerns,
however, inspired restrictions on imports of products such
as
radioactive materials, pharmaceuticals, arms and
ammunition, live
animals, meat, seeds, and plants. With a few exceptions,
Finland
discontinued export licensing in the early 1960s. The
State
Granary, however, controlled all trade in grains, while
the
Roundwood Export Commission reviewed all lumber exports.
|
Background | | Finland was a province and then a grand duchy under Sweden from the 12th to the 19th centuries, and an autonomous grand duchy of Russia after 1809. It won its complete independence in 1917. During World War II, it was able to successfully defend its freedom and resist invasions by the Soviet Union - albeit with some loss of territory. In the subsequent half century, 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.
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Location | | Northern Europe, bordering the Baltic Sea, Gulf of Bothnia, and Gulf of Finland, between Sweden and Russia
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|
Area(sq km) | | total: 338,145 sq km land: 303,815 sq km water: 34,330 sq km
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Geographic coordinates | | 64 00 N, 26 00 E
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Land boundaries(km) | | total: 2,654 km border countries: Norway 727 km, Sweden 614 km, Russia 1,313 km
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Coastline(km) | | 1,250 km
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Climate | | cold temperate; potentially subarctic but comparatively mild because of moderating influence of the North Atlantic Current, Baltic Sea, and more than 60,000 lakes
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Elevation extremes(m) | | lowest point: Baltic Sea 0 m highest point: Haltiatunturi 1,328 m
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Natural resources | | timber, iron ore, copper, lead, zinc, chromite, nickel, gold, silver, limestone
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Land use(%) | | arable land: 6.54% permanent crops: 0.02% other: 93.44% (2005)
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Irrigated land(sq km) | | 640 sq km (2003)
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Total renewable water resources(cu km) | | 110 cu km (2005)
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Freshwater withdrawal (domestic/industrial/agricultural) | | total: 2.33 cu km/yr (14%/84%/3%) per capita: 444 cu m/yr (1999)
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Natural hazards | | NA
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Environment - current issues | | air pollution from manufacturing and power plants contributing to acid rain; water pollution from industrial wastes, agricultural chemicals; habitat loss threatens wildlife populations
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Environment - international agreements | | party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic-Marine Living Resources, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: none of the selected agreements
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Geography - note | | long boundary with Russia; Helsinki is northernmost national capital on European continent; population concentrated on small southwestern coastal plain
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Population | | 5,250,275 (July 2009 est.)
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Age structure(%) | | 0-14 years: 16.4% (male 438,425/female 422,777) 15-64 years: 66.8% (male 1,773,495/female 1,732,792) 65 years and over: 16.8% (male 357,811/female 524,975) (2009 est.)
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Median age(years) | | total: 42.1 years male: 40.5 years female: 43.7 years (2009 est.)
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Population growth rate(%) | | 0.098% (2009 est.)
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Birth rate(births/1,000 population) | | 10.38 births/1,000 population (2009 est.)
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Death rate(deaths/1,000 population) | | 10.07 deaths/1,000 population (July 2009 est.)
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Net migration rate(migrant(s)/1,000 population) | | 0.68 migrant(s)/1,000 population (2009 est.)
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Urbanization(%) | | urban population: 63% of total population (2008) rate of urbanization: 0.8% annual rate of change (2005-10 est.)
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Sex ratio(male(s)/female) | | at birth: 1.04 male(s)/female under 15 years: 1.04 male(s)/female 15-64 years: 1.02 male(s)/female 65 years and over: 0.68 male(s)/female total population: 0.96 male(s)/female (2009 est.)
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Infant mortality rate(deaths/1,000 live births) | | total: 3.47 deaths/1,000 live births male: 3.78 deaths/1,000 live births female: 3.15 deaths/1,000 live births (2009 est.)
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Life expectancy at birth(years) | | total population: 78.97 years male: 75.48 years female: 82.61 years (2009 est.)
|
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Total fertility rate(children born/woman) | | 1.73 children born/woman (2009 est.)
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Nationality | | noun: Finn(s) adjective: Finnish
|
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Ethnic groups(%) | | Finn 93.4%, Swede 5.6%, Russian 0.5%, Estonian 0.3%, Roma (Gypsy) 0.1%, Sami 0.1% (2006)
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Religions(%) | | Lutheran Church of Finland 82.5%, Orthodox Church 1.1%, other Christian 1.1%, other 0.1%, none 15.1% (2006)
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Languages(%) | | Finnish 91.2% (official), Swedish 5.5% (official), other 3.3% (small Sami- and Russian-speaking minorities) (2007)
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Country name | | conventional long form: Republic of Finland conventional short form: Finland local long form: Suomen tasavalta/Republiken Finland local short form: Suomi/Finland
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Government type | | republic
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Capital | | name: Helsinki geographic coordinates: 60 10 N, 24 56 E time difference: UTC+2 (7 hours ahead of Washington, DC during Standard Time) daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
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Administrative divisions | | 6 provinces (laanit, singular - laani); Ahvenanmaan Laani (Aland), Etela-Suomen Laani (Southern Finland), Ita-Suomen Laani (Eastern Finland), Lansi-Suomen Laani (Western Finland), Lapin Laani (Lapland), Oulun Laani
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Constitution | | 1-Mar-00
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Legal system | | civil law system based on Swedish law; the president may request the Supreme Court to review laws; accepts compulsory ICJ jurisdiction with reservations
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Suffrage | | 18 years of age; universal
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Executive branch | | chief of state: President Tarja HALONEN (since 1 March 2000) head of government: Prime Minister Matti VANHANEN (since 24 June 2003); Deputy Prime Minister Jyrki KATAINEN (since 19 April 2007) cabinet: Council of State or Valtioneuvosto appointed by the president, responsible to parliament elections: president elected by popular vote for a six-year term (eligible for a second term); election last held 15 January 2006 (next to be held in January 2012); the president appoints the prime minister and deputy prime minister from the majority party or the majority coalition after parliamentary elections and the parliament must approve the appointment; Prime Minister VANHANEN reelected 17 April 2007 election results: percent of vote - Tarja HALONEN (SDP) 46.3%, Sauli NIINISTO (Kok) 24.1%, Matti VANHANEN (Kesk) 18.6%, Heidi HAUTALA (VIHR) 3.5%; a runoff election between HALONEN and NIINISTO was held 29 January 2006 - HALONEN 51.8%, NIINISTO 48.2%; Matti VANHANEN reelected prime minister; election results 121-71 note: government coalition - Kesk, KOK, VIHR, and SFP
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Legislative branch | | unicameral Parliament or Eduskunta (200 seats; members are elected by popular vote on a proportional basis to serve four-year terms) elections: last held 18 March 2007 (next to be held March 2011) election results: percent of vote by party - Kesk 23.1%, Kok 22.3%, SDP 21.4%, VAS 8.8%, VIHR 8.5%, KD 4.9%, SFP 4.5%, True Finns 4.1%, other 3.4%; seats by party - Kesk 51, Kok 50, SDP 45, VAS 17, VIHR 15, SFP 9, KD 7, True Finns 5, other 1
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Judicial branch | | Supreme Court or Korkein Oikeus (judges appointed by the president)
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International organization participation | | ADB (nonregional member), AfDB (nonregional member), Arctic Council, Australia Group, BIS, CBSS, CE, CERN, EAPC, EBRD, EIB, EMU, ESA, EU, FAO, G-9, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IEA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, MINURCAT, NC, NEA, NIB, NSG, OAS (observer), OECD, OPCW, OSCE, Paris Club, PCA, PFP, Schengen Convention, UN, UNCTAD, UNESCO, UNHCR, UNIDO, UNMIL, UNMIS, UNMOGIP, UNTSO, UPU, WCO, WEU (observer), WFTU, WHO, WIPO, WMO, WTO, ZC
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Flag description | | white with a blue cross extending to the edges of the flag; the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag); the blue represents the thousands of lakes scattered across the country, while the white is for the snow that covers the land in winter
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Economy - overview | | Finland has a highly industrialized, largely free-market economy with per capita output roughly that of the UK, France, Germany, and Italy. Its key economic sector is manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Trade is important; Finland's ratio of exports to GDP has risen from a quarter to 37% over the past 15 years. Finland excels in high-tech exports such as 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. Although Finland has been one of the best performing economies within the EU in recent years and its banks and financial markets have avoided the worst of global financial crisis, the world slowdown has hit export growth and domestic demand and will serve as a brake on economic growth in 2009 and 2010. The slowdown of construction, other investment, and exports will cause unemployment to rise. During 2009, unemployment will climb to over 8% of the labor force. Long-term challenges include the need to address a rapidly aging population and decreasing productivity that threaten competitiveness, fiscal sustainability, and economic growth.
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GDP (purchasing power parity) | | $194 billion (2008 est.) $192.4 billion (2007 est.) $184.8 billion (2006 est.) note: data are in 2008 US dollars
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|
GDP (official exchange rate) | | $271.9 billion (2008 est.)
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|
GDP - real growth rate(%) | | 0.8% (2008 est.) 4.1% (2007 est.) 4.9% (2006 est.)
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GDP - per capita (PPP) | | $37,000 (2008 est.) $36,700 (2007 est.) $35,300 (2006 est.) note: data are in 2008 US dollars
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GDP - composition by sector(%) | | agriculture: 2.8% industry: 32.4% services: 64.9% (2008 est.)
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Labor force | | 2.703 million (2008 est.)
|
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Labor force - by occupation(%) | | agriculture and forestry 4.5%, industry 18.3%, construction 7.3%, commerce 16%, finance, insurance, and business services 14.5%, transport and communications 7%, public services 32.4% (2008)
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Unemployment rate(%) | | 6.4% (2008 est.) 6.9% (2007 est.)
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Population below poverty line(%) | | NA%
|
|
Household income or consumption by percentage share(%) | | lowest 10%: 3.6% highest 10%: 24.7% (2007)
|
|
Distribution of family income - Gini index | | 29.5 (2007) 25.6 (1991)
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Investment (gross fixed)(% of GDP) | | 20.6% of GDP (2008 est.)
|
|
Budget | | revenues: $143.8 billion expenditures: $132.3 billion (2008 est.)
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|
Inflation rate (consumer prices)(%) | | 4.1% (2008 est.) 2.5% (2007 est.)
|
|
Stock of money | | $NA (31December 2008) $NA (31 December 2007) note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 16 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money and quasi money circulating within their own borders
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Stock of quasi money | | $NA (31 December 2008) $NA (31 December 2007)
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Stock of domestic credit | | $241.1 billion (31 December 2008) $225.4 billion (31 December 2007)
|
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Market value of publicly traded shares | | $NA (31 December 2008) $369.2 billion (31 December 2007) $265.5 billion (31 December 2006)
|
|
Public debt(% of GDP) | | 33.7% of GDP (2008 est.) 46.8% of GDP (2004 est.)
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Agriculture - products | | barley, wheat, sugar beets, potatoes; dairy cattle; fish
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Industries | | metals and metal products, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles, clothing
|
|
Industrial production growth rate(%) | | 0.4% (2008 est.)
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Current account balance | | $5.518 billion (2008 est.) $10.12 billion (2007 est.)
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Exports | | $96.62 billion (2008 est.) $90.2 billion (2007 est.)
|
|
Exports - commodities(%) | | electrical and optical equipment, machinery, transport equipment, paper and pulp, chemicals, basic metals; timber
|
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Exports - partners(%) | | Russia 11.6%, Sweden 10%, Germany 10%, US 6.4%, UK 5.5%, Netherlands 5.1% (2008)
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|
Imports | | $87.51 billion (2008 est.) $78.22 billion (2007 est.)
|
|
Imports - commodities(%) | | foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn and fabrics, grains
|
|
Imports - partners(%) | | Russia 16.3%, Germany 15.7%, Sweden 13.6%, Netherlands 6.3%, China 5.1%, UK 4.2% (2008)
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Reserves of foreign exchange and gold | | $8.346 billion (31 December 2008 est.) $8.385 billion (31 December 2007 est.)
|
|
Debt - external | | $339.5 billion (31 December 2008) $314.1 billion (31 December 2007)
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|
Stock of direct foreign investment - at home | | $84.44 billion (31 December 2008 est.) $88.69 billion (31 December 2007 est.)
|
|
Stock of direct foreign investment - abroad | | $116 billion (31 December 2008 est.) $114.2 billion (31 December 2007 est.)
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Exchange rates | | euros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)
|
|
Currency (code) | | euro (EUR)
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Telephones - main lines in use | | 1.65 million (2008)
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Telephones - mobile cellular | | 6.83 million (2008)
|
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Telephone system | | general assessment: modern system with excellent service domestic: digital fiber-optic fixed-line network and an extensive cellular network provide domestic needs international: country code - 358; submarine cables provide links to Estonia and Sweden; satellite earth stations - access to Intelsat transmission service via a Swedish satellite earth station, 1 Inmarsat (Atlantic and Indian Ocean regions); note - Finland shares the Inmarsat earth station with the other Nordic countries (Denmark, Iceland, Norway, and Sweden)
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Internet country code | | .fi; note - Aland Islands assigned .ax
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Internet users | | 4.383 million (2008)
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Airports | | 148 (2009)
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Pipelines(km) | | gas 694 km (2008)
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|
Roadways(km) | | total: 78,141 km paved: 50,914 km (includes 700 km of expressways) unpaved: 27,227 km (2009)
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Ports and terminals | | Hamina, Helsinki, Kokkola, Kotka, Naantali, Pori, Raahe, Rauma, Turku
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Military branches | | Finnish Defense Forces (FDF): Army, Navy (includes Coastal Defense Forces), Air Force (Suomen Ilmavoimat) (2007)
|
|
Military service age and obligation(years of age) | | 18 years of age for male voluntary and compulsory - and female voluntary - national military and nonmilitary service; service obligation 6-12 months; mandatory retirement at age 60 (2008)
|
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Manpower available for military service | | males age 16-49: 1,169,910 females age 16-49: 1,121,187 (2008 est.)
|
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Manpower fit for military service | | males age 16-49: 962,479 females age 16-49: 920,297 (2009 est.)
|
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Manpower reaching militarily significant age annually | | male: 33,784 female: 32,621 (2009 est.)
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Military expenditures(% of GDP) | | 2% of GDP (2005 est.)
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Disputes - international | | various groups in Finland advocate restoration of Karelia and other areas ceded to the Soviet Union, but the Finnish Government asserts no territorial demands
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Electricity - production(kWh) | | 77.24 billion kWh (2007 est.)
|
|
Electricity - production by source(%) | | fossil fuel: 39% hydro: 18.7% nuclear: 30.4% other: 11.8% (2001)
|
|
Electricity - consumption(kWh) | | 86.9 billion kWh (2008)
|
|
Electricity - exports(kWh) | | 3.335 billion kWh (2008 est.)
|
|
Electricity - imports(kWh) | | 16.11 billion kWh (2008 est.)
|
|
Oil - production(bbl/day) | | 9,789 bbl/day (2008 est.)
|
|
Oil - consumption(bbl/day) | | 215,600 bbl/day (2008 est.)
|
|
Oil - exports(bbl/day) | | 133,000 bbl/day (2008 est.)
|
|
Oil - imports(bbl/day) | | 347,400 bbl/day (2008 est.)
|
|
Economic aid - donor | | ODA, $1.023 billion (2007)
|
|
Oil - proved reserves(bbl) | | 0 bbl
|
|
Natural gas - production(cu m) | | 0 cu m (2008 est.)
|
|
Natural gas - consumption(cu m) | | 4.735 billion cu m (2008 est.)
|
|
Natural gas - exports(cu m) | | 0 cu m (2008)
|
|
Natural gas - proved reserves(cu m) | | 0 cu m (1 January 2009 est.)
|
|
HIV/AIDS - adult prevalence rate(%) | | less than 0.1% (2007 est.)
|
|
HIV/AIDS - people living with HIV/AIDS | | 2,400 (2007 est.)
|
|
HIV/AIDS - deaths | | fewer than 100 (2003 est.)
|
|
Literacy(%) | | definition: age 15 and over can read and write total population: 100% male: 100% female: 100% (2000 est.)
|
|
School life expectancy (primary to tertiary education)(years) | | total: 17 years male: 17 years female: 18 years (2006)
|
|
Education expenditures(% of GDP) | | 6.4% of GDP (2005)
|