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Egalitarian Finland most competitive, too

Despite hefty government spending on social benefits, Finland tops global economies. Second in a three-part series.

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Fifty years ago, Finland was known for little more than the wood pulp from its endless forests. A poverty-stricken land of poorly educated loggers and farmers on the edge of the Arctic Circle, few paid it any attention.

Today, this small Nordic nation boasts a thriving hi-tech economy ranked the most competitive in the world, the best educated citizenry of all the industrialized countries, and a welfare state that has created one of the globe's most egalitarian societies.

Envious policymakers from far and wide are beating a path to Helsinki to learn the secrets of Finland's success.

"We have a saying here," chuckles Stefan Nygard, a university lecturer, as he swings his baby daughter gently, soothing her to sleep. "If you are Finnish, you've won the lottery."

But as the leaders of other European countries desperately seek ways to preserve their expensive systems of social protection in a competitive globalized world, Finland's circumstances and mind-set aren't easily copied. "Finland is an exceptional case Europe," cautions Riisto Erasaari, professor of social policy at Helsinki University. "We are a small homogenous country, heavily state-based, and our social model as a whole is so typically Finnish that it won't travel. But parts of it," - such as the government-funded focus on innovation and education, "are exportable."

Mr. Nygard and his partner, Minna Sirelius, have certainly enjoyed the fruits of Finland's exceptionalism.

Neither of them paid a cent for their university education, though they took seven years to complete their respective degrees in history and psychology. Ms. Sirelius enjoyed free healthcare throughout her pregnancy and the birth of their daughter, Emilia, and she plans to stay on leave from her job in IBM's human resources department for 11 months.

She can afford to: The government is paying her 60 percent of her salary to look after her baby. Next year Nygard and Sirelius will choose among the Finnish-, Swedish-, English-, or Spanish-language day-care centers in their neighborhood, and the state will pick up four-fifths of the cost.

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