Welfare increases in that there is greater variety in the supply offered to consumers and companies can benefit  6  Persson, M. and M. Radetzki, "China, Sweden and globalisation”, Ekonomisk Debatt 1, 2006. 7  Bigsten, A. and B. Holmlund, ”Exaggerated fears of the threat from China”, Ekonomisk Debatt 2, 2006  BIS Review 35/2006  3  from economies of scale in their production. There are many indications that the trade with China and the other rapidly-growing economies are developing in this direction. How will Sweden meet the challenges? So far, it appears as though Sweden has managed the structural transformation well, although some groups and regions may experience negative effects during a transitional period. The Swedish Institute for Growth Policy Studies (ITPS) demonstrates in a study that Swedish-owned industrial companies which increased the number of their employees in low-wage countries during the 1990s at the same time showed an increased demand for labour force with higher education back home in Sweden. This is in line with the development that has taken place in the United States and the United Kingdom. According to the Swedish Labour Market Administration’s figures on redundancy notification and ITPS’s media monitoring, few jobs moved abroad as a result of companies transferring their operations abroad during 2005. In total, the number of jobs was 2,000-4,000, of which 1,500 involved a move to another EU country.
This should increase understanding among the population for implementing necessary measures and put pressure on governments to do so. Every other year, a special Globalisation report will be produced. This will contain a more in-depth version of the annual analyses of global financial and economic stability. One very important question for the Fund’s legitimacy and ability to act is how it is governed. Today the governance of the IMF to a large extent reflects the distribution of power in the world when the IMF was established. The question of influence and governance has gained a new explosive force through the economic developments in a number of large growth economies such as China, India, Brazil and Mexico, who now demand greater influence. If nothing is done to reform the IMF’s forms of governance, there is a risk that the organisation will lose legitimacy and relevance. It will most likely take time before a sustainable solution has been drawn up. Personally, I regard the regional principle as the most democratic and efficient in the long term. This would mean that the large regions – which are currently more or less well-organised - the United States, Latin America, Europe, Africa, Asia, etc. - reinforcing there regional platforms in order to shoulder global responsibility together. Thank you! 8  BIS Review 35/2006