Nowadays, Finland is facing multiple crossroads. Witnessing the implications of the Russian invasion of Ukraine, the Scandinavian country decided to end its decades-long neutrality and join NATO, fearing the possibility of Putin invading its territories as well. As tensions between the West and Russia deepen, it becomes more and more clear that the cold war never actually ended. Also, we mustn’t forget that a government with a completely different orientation is about to rise to power in Helsinki. So, is it a good idea to invest in Finland these days?
I am Ofir Bar, an investor with about a quarter of a century of experience in worldwide markets. As an investor, it’s hard for me to ignore the fact that Finland is in the eye of the storm, in the context of the conflict with Russia. That said, it’s still a very rich and advanced country, with immense potential. That is to say, when considering whether or not one should invest in Finland, many factors need to be taken into account. Allow me to explain all the major factors that truly matter before you make your choice.
Is Finland the next target?
As you may have guessed, the tense situation with Russia has a tremendous effect on the attractiveness of investing in Finland. This country’s location is highly strategic, making it a high-potential target for Putin’s next invasion, if one occurs. It’s not a secret that war is bad for business, and that’s a matter of concern to all investors. Being neutral is good for business. Of course, I don’t think Prime Minister Marin had any other viable options considering the fact that Finland had to pick sides in order to prepare for a possible future war.
This brings me to the elections held in Finland just lately. As you may have heard, the Social-Democratic Party lost the elections, and it is now only the third biggest party after the National Coalition and the far-right Finns Party. These two conservative parties have risen to power mainly on the back of rising criticism of the Social Democratic Party’s financial policies during these highly unstable times, but that’s not all: The conservatives are determined to stop immigration into Finnish territories. The Finns Party even wishes to leave the EU at once in order to block more immigrants from entering Finland.
What does this mean? Well, the Social Democratic Party indeed faced some major challenges during its term, such as COVID and the implications of the war to the east. The party handled these quite well, in my opinion, but many others think this situation could have been handled better. Who knows, maybe the conservatives are set to bring better results? That said, I believe leaving the EU may be disastrous for Finland. It also means the country will no longer partake in the commerce agreements between EU members. And this is just the tip of the iceberg concerning the economic consequences of leaving the union. Just look at what happened to the UK.
Optimism makes a difference
With all that said, it’s easy to forget all the clear advantages Finland has to offer investors. We can talk on and on about the danger to the east, but for now, Finland remains a stable and strong, developed country. Although the possibility that Russia will invade it is rather scary, it’s not that probable: Since NATO knows that Finland is situated in such a strategic place, invading it may spark WWIII, and Putin knows that. I believe it’s more probable he’ll try his luck with other countries that are not likely to set a chain reaction on NATO’s side.
True, Finland has been going through some rough times – but many countries are suffering from rough times for similar reasons. Instead, let’s observe Finland in a macro look: For the last couple of decades, this nation has been a symbol of stability, both economically and politically. Also, it’s among the least corrupt countries in the world. The combination of these two traits makes it, even these days, a market that is almost irresistible to investors.
The stability that characterizes Finland is a product of a business culture that encourages innovation and productivity. The local business sector offers many options to investors looking to set a foothold in this market. The local government greatly supports new businesses and startups, making things easier for entrepreneurs. Also, we must not forget that Finland is well-located not only in terms of strategic warfare, but also economically: The Nordic and Baltic markets are just across its doorstep, and the North American market is just a few hours of flight away.
It’s well-known that businesses thrive in times of optimism, and Finland has an abundance of that. This country is known for being home to happy people, with low levels of anxiety and stress. And that’s the real icing on the cake.
The Finnish egg basket
Considering all the factors, it’s not easy to determine whether Finland is a good place for investors in these times. Truth be told, Finland is approaching unknown territories, both economically and politically, but if you ask me, we shouldn’t jump to conclusions. Finland has been a thriving country for many decades, and I believe that even if it goes through some rough years in the near future, it is strong enough to weather the storm. For these reasons, I believe that the new challenges Finland faces should not deter investors from placing some ‘eggs’ in the Finnish basket.
