Denmark is a developed country located in the northwest of Europe; she’s a part of Scandinavian countries. Germany, Norway, and Sweden are the neighboring countries of Denmark. She falls into the category of tech advanced countries in the world. Her system of government is comprised of parliamentary democracy and constitutional monarchy.
Now, it is time to discuss the strengths and weaknesses of the country, what opportunities available to the Danish government, and possible external threats that could jeopardize the country’s economy. Here it follows the SWOT analysis;
Strengths of Denmark
Well Developed Economy
The nominal GDP of the Danish economy in 2018 was 370 billion US dollars; it was the world’s 34th biggest nominal GDP, and nominal per capita of the country was 63,829 US dollars, it was the world’s 6th highest per capita.
GDP and per capita are two basic indicators that tell us the economic progress of a country. Her GDP and per capita is one of the highest in the world. Consequently, Danish citizens are the world’s happiest people because they earn enough money to fulfill their needs, and they live a quality life.
Denmark has been one of the oldest and longest members of the European Union. As we know that being a member of the EU provides a lot of advantages to a country and its citizens as well. Like, she can trade products and services freely with other member countries. Her people have the freedom to move across all the member countries without any papers.
When a country has economic stability, then her people would live a happy life and the crime rate would be lower as a result. The interesting thing about the socio-culture order of the country is that people are well educated, and they’re more tolerant towards the people of other cultures and religions.
However, the Danish society is peaceful and cohesive. Such a peaceful social atmosphere has a great impact on the working performance of her people. Therefore, their productivity is much higher because of the country’s social order.
According to the ranking of Transparency International, Denmark falls in the category of those countries that have the lowest corruption rate. As we all know that corruption is not good for any economy, whether it’s social, political or economical. However, when a country has the lowest corruption, it means the lowest hypocrisy that people are the same inside and outside. Furthermore, there would be an atmosphere of trust among people, politicians, and public institutes. When there’s trust, then society can perform better collectively because everyone feels responsible to complete one’s job.
Weaknesses of Denmark
Small Geography of Denmark
Some things are in your control like per capita, GDP, corruption, population, and management system. A country can improve its performance by working on certain parameters. However, small geography is one such factor that a country can’t increase especially if you compare it with her neighboring countries like France and Germany. Small geography means that she has few natural resources to profit from like land for agriculture and farming.
Relying on Fossil Fuels
Although the country has made much progress in the field of renewable energy; and her renewable resource is fulfilling approximately 50% energy needs of the country. She has to burn fossil fuels to satisfy her energy needs. However, the country used to export the extra reserve of oil and gas, but the growing energy demand of the country is making her burn it, rather than exporting it.
Burning fossil fuel is not only good for the environment, but it’s not good for the country’s economy as well. It is because the EU is planning to impose environmental taxes against those member countries that are still relying upon oil and gas. Such taxation would cost the economy of the country a lot.
Relying on Public Sector
Approximately 80% of the Danish jobs are comprised of the service industry; it shows that the Danish population is heavily relying upon her government and her service industry. That is good at a time when the economy is proliferating. But it could be catastrophic if the country has to face some sudden unexpected economic downfall. Then she has no choice but to downsize, and downsizing would result in a high unemployment rate.
Opportunities for Denmark
Renewable Energy sources
Renewable energy sources and wind turbines are growing fields, and the country has a 50 % energy gap to cover. If the Danish government invests in this sector, then it would benefit the country’s economy in many ways. For instance, it would create job opportunities and the country’s service industry weight would shift.
Most important, it would transform the country into using clean renewable energy. That’s not only good for the environment, but it would also save many economic costs like EU environmental taxes and the cost of oil and gas.
London used to have the office of the European Union, ever since Britain left the EU. The new office of the European parliament is in question; many member countries would want it in their countries. However, it would also present a great opportunity to bring the new EU office in her country. If Denmark relocates the new EU office in her country, then many opportunities would come along with it.
Threats to Denmark
Any unexpected economic downfall would descend the country from 100 to 20 because her majority of job market is heavily relying on the service industry and public sector. If any natural disaster or economic downturn happens, then the country would have to cut her extra resources. That would bring thousands of unemployed people on the roads; the crime rate would increase because people would have no money to buy it honestly. The whole peaceful social order would change into chaos because hunger would force them to do anything.
Britain was the key player in the European trades of goods and services, ever since leaving the EU has put the whole trade system into uncertainty. No member country is certain about the impact that how badly it would affect their economy, because the UK was the major trade partner. Danish government has also had very good trade relations with her. Now, Brexit has put her in a very dwindling position.
Denmark is a very strong country in terms of GDP, per capita, social and cultural order, and trust among people and the government. It’s the strong leadership of the country that brought her such honor and dignity internationally. Such Danish achievements are out of the question, but she’s overly relying on the fossil fuels, service industry, and public sector. That would jeopardize all the hard work of her economy if the country doesn’t control these factors.
Brexit has created a lot of uncertainty in the region, but it would also bring many opportunities. Now, the Danish government should be ready to fill those gaps created by the Brexit, because someone has to do it. Then why Denmark should do it, and replace the UK’s place. It’s a difficult task, but the price is also big.
Economically speaking, her financial position is much better if you compare it with other EU member countries. If she manages to shift the weight of the service industry into private businesses, and more focus on renewable energy sources. Then she doesn’t have to worry about her future.