Finland: Through Hardships, To the Stars

Some nations find a way to overcome crises and thrive, while others unfortunately falter. This article delves into Finland’s history and reasons for its challenging past and remarkable ascent.

In November 1939, the Soviet Union invaded Finland. The Soviet Union had a population 50 times larger and a significantly larger and better-equipped army. The Soviet Army expected a quick victory, with Helsinki captured within less than two weeks. It seemed that Finland's fate was sealed.

Led by Marshal Mannerheim, Finland put up a surprisingly effective resistance.  Mannerheim and others clearly saw the signs of the Soviet invasion long before the war broke out. But, the Finns were determined to defend their independence at all costs. This decision set Finland on a path of resistance, leading to the Winter War of 1939-1940, during which the Finnish people demonstrated incredible bravery and resilience in the face of overwhelming odds. The war ended in a negotiated peace treaty. Finland was forced to cede some 10 percent of its territory to the Soviet Union. But as documents would later prove, the Soviet Union attacked, hoping for the entire Finland, not just part of it.

In some ways, the Winter War was just the beginning of Finland's complex position during World War II. In 1941, Germany invaded the Soviet Union. Finland allied itself with Germany, the Soviet Union's enemy, hoping to regain its lost territories.

Finland signed the Treaty of Paris in 1947, formally ending the state of war. The treaty required Finland to trade with the Soviet Union and buy their products. The treaty also required Finland to pay 300 million dollars or in today’s dollars over 4 billion dollars to the Soviet Union within six years. Meeting the demands of war reparations was no easy feat for Finland, especially for a small, largely agricultural, and un-industrialized nation. But Finns displayed remarkable national unity and identity. Finnish citizens voluntarily contributed to the government's efforts to raise funds. Many Finnish women donated their jewelry and other valuable possessions to help the government fulfill its obligations to the Soviet Union. They all came together to ensure that Finland does not give the Soviet Union any reason for further demands and claims.

Hundreds of thousands of Finns who were displaced from Karelia, who became disabled as a result of the war, orphans, and widows, needed housing, money, and emotional support. It is truly remarkable how the Finns managed the influx of refugees. Not a single refugee ended up on the streets. The Finns, in various cities, generously opened the doors of their homes to those seeking refuge. This display of compassion and hospitality showed an unprecedented level of national unity among the Finnish people.

Finland’s foreign policy and its economy underwent a significant transformation since the Winter War. After a the Winter War and World War II, Finland faced the challenge of defining its position in the rapidly changing geopolitical landscape. Finland adopted policies favorable to the Soviet Union to avoid further confrontation. Such strategy required sacrificing some economic independence and freedom of speech. However, it allowed Finland to maintain its independence, democracy, and sovereignty.

Economy-wise, Finland was a poor country with a large debt burden in the years immediately following World War II. The Finnish economy is now a highly developed and diversified economy, whose GDP per capita has increased from 1,000 dollars in 1940 to over 50,000 dollars today. So how did Finland manage to become one of the most prosperous countries in the world?

The key to Finland's prosperity lay in realizing they could nurture a skilled workforce and develop industries that could yield high profits. Therefore, first and foremost, they had to invest in people. Finland invested in its people by adopting the Nordic Model of social democracy. This comprehensive social welfare system offered healthcare, education, and support, promoting equality and inclusivity, greatly influencing the country's economy and society.

Education became a cornerstone of Finland's economic growth. The country’s world-class education system, combined with a meticulous selection process for choosing teachers, has nurtured a culture of continuous learning and knowledge sharing. Finnish schoolteachers go through very competitive process. They are selected from bright high school and university students, enjoy very high status and higher than university professor’s salaries. Finnish teachers are well-paid, have advance degrees and have lots of autonomy in how they teach. This is perhaps why, Finnish students consistently score at or near the top of world national rankings in literacy, math, and problem-solving abilities.

Throughout decades, Finland has gradually diversified its economy, which proved to be essential for sustained growth. Strategic investments in sectors like electronics, telecommunications, and machinery contributed to its thriving technology-driven economy.

Finland's commitment to research and development played a significant role in its economic growth. The government's support for research and development has fostered an environment of creativity and invention. Finland’s combined private and public investment in research and development equals to 3.5 percent of its GDP, almost double the level of other European Union countries.  With significant investment in research and development, right policy interventions, willingness to learn from mistakes, they fostered an environment that led to the rise of global giants like Nokia.

Finland has a strong industrial base and an export-oriented economy. The end of the Cold War and the collapse of the Soviet Union in 1991 brought significant changes to Finland's geopolitical landscape. Soon Finland joined the European Union, which supported economic reforms and boosted Finland’s trade. Joining the European Union allowed Finland to access a large and wealthy market, which was crucial for Finland’s economic development. Today, Finland's exports make up close to half of its GDP, contributing to the nation's prosperity.

To support further its growth, Finland has invested heavily in modern infrastructure, including transportation and communication networks. In recent years, Finland has been at the forefront of digitalization and has seen the rise of numerous successful startups in various industries, contributing to its economic growth and global reputation as an innovation hub.

Today, the Finnish economy is considered to be one of the most stable in Europe. The country has a low debt burden, a strong currency, a well-educated workforce, a low level of corruption, political stability, and a well-functioning democracy, which has created an environment conducive to economic growth and foreign investments. Finland enjoys one of the lowest levels of income inequality among the OECD countries. Finns are consistently ranked to be the happiest nation in the world.

A Latin saying states, 'Through hardships, to the stars.' The paths to economic and national success are undeniably challenging and fraught with hardships. But, as Finland has demonstrated, they can be achievable under certain circumstances.

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See also: Diamond, Jared (2019). Upheaval: Turning Points for Nations in Crisis. Little, Brown and Company.