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Comment by thriftwy | Hacker News Reader

I'm frankly not sure why you expect the level of Finland to remain where it was.

20 years ago Russian writer Viktor Pelevin remarked that "we are like a banana republic that has to import its bananas from Finland". But fast forward those 20 years, Finland itself is now a buffer state that buffers a dead end. In many ways, Baltic states and Finland made money trading with Russia, and if Russia stays AFK, their combined economic viability is in doubt.

I'm not sure what is Finland's comparative advantage these days. What are things that are is cheaper to do in Finland (or Latvia) that you cannot do in Hungary, on Cyprus or in Denmark? The logistic leg is surely longer and I'm frankly not sure that you're going to pull it off.

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I'm not sure why you're getting downvoted. You're not being actively hostile, just voicing conerns.

But I feel you're not extending your own question far enough to answer it for yourself. Why do in Finland what is cheaper to do in Cyprus? Why do in Cyprus what is cheaper to do in Laos? Etc, etc. The answer is usually not "The economy is wrong and I am right".

Logistics-wise, it is true that we are farther away from places, but it's also true the price of logistics has fallen over the past 100 years by several orders of magnitude -- and that we have a giant sea on our western flank which makes it even cheaper to move huge amounts of freight. I don't think you can look at the sophistication of modern logistical operations and deem that that is going to be the dealkiller for people. Doubly so when you consider the rising tide of self-driving technologies of all kind -- triply so when you consider Finland is one of the few states in Europe still actively investing in nuclear power. A self guided, nuclear powered cargo fleet is the kind of thing I dream about at night.

But again - that wouldn't be specific to Finland, that would be a boon to any state with a coastline. So I just don't really see it as all that relevant from a comparative advantage viewpoint. There has to be more to the story than the raw logistics of it, much like there has to be more to the story of Python being more popular than x86 these days even though x86 is closer to the metal.

Was it Kekkonen who said that the Finnish economy is like a chair, and two of the legs are made of wood?

The forestry industry is still a big player, especially with the recent disconnection of Russia from the world economy. Biofuels may play a part in that. But not sure it's a big enough differentiator these days.

The country is well-educated, however it suffers from the same problem as much of Europe: not enough young people to support a growing retired population. That retired population is also more conservative leaning and doesn't want more immigration, yet Finland needs more skilled immigrants. Again, a common European story of an older voting base who want to live off the fruits of other peoples' labour (whether as recipients of government largesse, or as landlords on their property investments) but do their darnedest to make it harder for that labour to make those fruits.

Disconnected Russia is also a problem for the Finnish forest industry: the processing capacity greatly exceeds domestic wood supply and was relying on raw material imports from Russia. This now results in reduced industrial output.

In my opinion, Finns are very honest, hard working, and reliable. They obviously don't try to sell themselves as cheap, so they don't compete on price, but on quality.

I like how the parent puts Denmark next to Hungary and Cyprus, as if their salaries could be comparable in any way.

This is like comparing Silicon Valley salaries with Chinese

Can their salaries, and productivity, be compared with Finland though?

My point was, Finland is doing several different things, most of which may now be done cheaper elsewhere.

What about skills based? Doing things that other "cheap" countries can't do? If u can't compete on price compete on know-how.

I don't think they lack skills on Cyprus and in Denmark. Hungarians are also quite bright.

Sure, I don't expect that Finland's economy would just implode. Developed countries don't do that. But it's quite possible it will enter multiple years long economic malaise, even by post-2022 EU accounts. As other countries slowly eat its lunch by developing matching skills while having better logistical disposition to use them.

Their advantage might be quality though. I have a bunch of tools from Finland, because they're heavy duty and reliable. Cost is much higher than Chinese made, but it's still value for money.

> "we are like a banana republic that has to import its bananas from Finland"

Wasn't there some trade policy wierdness back in the 90s that made Finland (on paper) one of the world's top banana exporters or something? A short search didn't come up with anything, so I can't tell if I only imagined that back then.

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