. KELLY
embassy:
Itainen Puistotie 14A, SF-00140, Helsinki
mailing address:
APO AE 09723
telephone:
[358] (0) 171931
FAX:
[358] (0) 174681
Flag:
white with a blue cross that extends 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)

@Finland, Economy

Overview:
Finland has a highly industrialized, largely free market economy, with
per capita output two-thirds of the US figure. Its key economic sector
is manufacturing - principally the wood, metals, and engineering
industries. Trade is important, with the export of goods representing
about 30% of GDP. 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. The
economy, which experienced an average of 4.9% annual growth between
1987 and 1989, sank into deep recession in 1991 as growth contracted
by 6.5%. The recession - which continued in 1992 with growth
contracting by 4.1% - has been caused by economic overheating,
depressed foreign markets, and the dismantling of the barter system
between Finland and the former Soviet Union under which Soviet oil and
gas had been exchanged for Finnish manufactured goods. The Finnish
Government has proposed efforts to increase industrial competitiveness
and efficiency by an increase in exports to Western markets, cuts in
public expenditures, partial privatization of state enterprises, and
changes in monetary policy. In June 1991 Helsinki had tied the markka
to the European Union's (EU) European Currency Unit (ECU) to promote
stability. Ongoing speculation resulting from a lack of confidence in
the government's policies forced Helsinki to devalue the markka by
about 12% in November 1991 and to indefinitely break the link in
September 1992. The devaluations have boosted the competitiveness of
Finnish exports to the extent the recession bottomed out in 1993 with
renewed economic growth expected in 1994. Unemployment probably will
remain a serious problem during the next few years, with the majority
of Finnish firms facing a weak domestic market and the troubled German
and Swedish export markets. Declining revenues, increased transfer
payments, and extensive funding to bail out the banking sy