Voima Weekly #40 – Why is Finland growing poorer, even though it has every condition needed to become wealthier?

Aerial view of the old Falun Mine in Sweden. Falun’s copper mine is a powerful reminder of what minerals and the mining industry can mean for a nation. In the 17th century, Stora Kopparberget produced as much as two-thirds of Europe’s copper, financed Sweden’s wars and state-building, and served as one of the economic foundations on which Sweden rose to become a European great power. This is the mining industry at its best: a resource extracted from the ground is transformed into capital, technology, state power, and wealth that carries across generations. Today, the mine operates as a museum.

Finland has forests, water, energy, minerals, high-level engineering expertise, and relatively few people. For that reason, Finland’s starting point should be exceptionally strong. Our natural resource base relative to the size of our population is remarkable by European standards: we have approximately 4.6 hectares of forestry land per person, more than 450 cubic metres of timber per Finn, vast reserves of fresh water, and a mineral base that the OECD has described as one of the richest in Europe.

This does not mean that wealth is created automatically by the ground beneath us. But it does mean that Finland should, by default, be one of Europe’s strongest economies. Forests, water, minerals, energy, expertise, and land area are shared among just over 5.6 million people. The starting point is not weak. Quite the opposite.

This is the contradiction: the country is strong in natural resources, but the national balance sheet does not behave accordingly. Natural resources alone do not make a nation wealthy. Wealth is created only when those resources are refined, owned, and led correctly. From the perspective of the national economy, the fundamental question is therefore this: who owns the country’s resources, who carries the risk, who refines them, and on whose balance sheet does the value ultimately accumulate?

That is why the current discussion feels wrongly framed. In Finland, we constantly discuss where the next savings list will come from, how public finances will be patched up, and how the next debt package can be justified. The conversation revolves around spending, taxes, and debt, when the deeper question should be this: why is a country with such a strong resource base unable to form sufficient capital of its own?

Finland’s problem is not a lack of resources. It is clear that Finnish administration and bureaucracy have become too heavy. I have addressed this in earlier Weekly¹ letters through the lenses of public finances, regulation, and structural issues, so I will not return to that same path in this text.

Here the question is even more fundamental: why is a country with such a strong resource base unable to form enough capital of its own?

There is no single, simple answer. It is the result of many factors: overly heavy administration, high taxation, a lack of capital, slow permitting processes, weak owner-thinking, and the fact that too few people have built these resources forward with long-term commitment.

Production, ownership, and capital formation are no longer rewarded in the same way as maintaining the system. But this is not only the fault of government. Wealth is not created because someone identifies a resource in a PowerPoint deck or in a political program. It is created when an owner or entrepreneur takes the resource seriously, builds a business around it step by step, raises capital, carries and endures many kinds of risk, and develops the value chain year after year.

There has been too little of this kind of ownership in Finland. We have a great deal of expertise, but too few builders who gather and compound capital. A lot of discussion, but too few people who take a project through permitting processes, financing rounds, failures, technical problems, contract negotiations, and market cycles.

It is easy to say that the state, bureaucracy, or the EU is standing in the way. Often they are. But that does not release us from the responsibility of ownership. National wealth will not be rebuilt without people and companies willing to carry risk, build production, and keep doing the work even when the environment is not perfect.

The problem is therefore both structural and personal. We need fewer obstacles, but also more owners who think in decades rather than project cycles.

The United Arab Emirates built its wealth with a different kind of thinking. Abu Dhabi’s oil history began with long concessions granted to foreign companies, but the country did not remain a passive recipient of royalties. In the 1960s, the model was changed to a 50/50 profit-sharing arrangement, and in the 1970s Abu Dhabi began taking direct majority stakes in production. ADNOC was founded in 1971, and by 1974 Abu Dhabi had raised its participating interest in key onshore production to 60 percent. The country did not remain a territory where others simply pumped the natural resource out of the ground. It turned itself into an owner.

On top of these types of agreements and ownership structures, the broader wealth of the United Arab Emirates was later built: low taxation², an environment attractive to capital, infrastructure, trade, logistics, real estate development, and an international financial centre. Another point in its favour is that public administration has not expanded with rising wealth in the same way as in many Western countries. In international comparisons, UAE government spending is only around one-fifth of GDP or less, while the corresponding figure in Finland is approximately 57–58 percent. This difference is not a minor detail. It shows that wealth can also be built in a model where the state acts partly as an owner and an enabler — not as a system that absorbs an ever-larger share of the national economy merely to sustain itself.

The same principle of owner-thinking can also be seen in Norway. Norway did not treat oil merely as budget revenue to be spent immediately on public expenditure. Instead, it built a separate structure for its oil and gas revenues: the Government Pension Fund Global³, often referred to as the Oil Fund.

Despite its name, it is not a conventional pension fund that directly pays pensions to individual citizens, but Norway’s sovereign global investment fund. Its purpose is to transform oil and gas revenues into lasting national financial wealth and to support public finances over the long term, including for future generations and the costs of an ageing population. The Norwegian state’s net cash flow from petroleum activities is transferred into the fund, and funds can be transferred to the state budget only by decision of Parliament.

This is an extremely important distinction. Norway did not simply find oil. It decided that oil wealth would be transformed into national financial wealth. A finite natural resource was converted into global ownership: equities, fixed-income investments, real estate, and other financial assets. Oil did not remain merely a temporary revenue stream. It was turned into a balance sheet.

This is an essential lesson for Finland as well. The point is not that Finland is Norway, or that forests, water, ore, and energy are the same as North Sea oil. The point is the way of thinking. Norway asked how a natural resource could be turned into lasting national wealth.

A country does not become wealthier because its administration grows. On the contrary: if an ever-larger share of the national economy’s energy is spent maintaining the system itself, the country effectively begins to grow poorer. Wealth is created when people build things that someone else is willing to pay for with their own money and of their own free will.

The raw materials market is the simplest example of this. If the market needs metal, energy, timber, water, or food, the buyer pays for it. This does not require vast theoretical genius. It requires ownership, capital, permits, logistics, contracts, and the ability to deliver.

Only on top of this basic layer are higher value-added production, technology, by- products, services, and the wider industrial ecosystem built. First, there must be production. Only then is there a reason to build more around it. That is why value should not primarily be sought in administrative programmes or political declarations, but in real productive capacity.

The state can build infrastructure, secure the rule of law, and remove obstacles around production. But over the long term, the state cannot replace production itself. When the system begins to spend more and more of its energy maintaining its own administration, capital slowly begins to erode.

The original idea of the European Union⁴ was to remove barriers around capital, labour, trade, and cooperation. In many respects, however, development has also moved in the opposite direction: toward heavier regulation, more centralised administration, and an ever-growing transfer system. Capital is no longer directed primarily to where the market sees the best return, but increasingly to where the political system wants it to be⁵.

This is also clearly visible in the way people now talk about “strategic investments”. Data centres, artificial intelligence, the green transition, and the next national project are declared to be the solution to almost everything. But true innovation is not born from political liturgies. In practice, these kinds of declarations often create only a new layer of actors seeking to benefit from administratively directed capital and support structures⁶.

A genuinely value-creating company usually emerges from something much simpler: someone solves a problem that a customer is willing to pay for with their own money.

This is also one reason why, in the West, capital is increasingly moving away from production and toward the system itself. More structures are being built to manage capital than to create it. At the same time, ownership, risk-taking, and the building of production are becoming increasingly heavily taxed and regulated.

The biblical Parable of the Talents also applies to nations⁷. To the one who uses what has been entrusted to him well, more is given. From the one who buries what he has received in the ground, even what he had is eventually taken away. This may sound harsh, but in the economy it happens all the time. Capital moves to where it is used well. Talent moves to where people’s work bears fruit. Industry moves to where it can grow. Ownership moves to those who are willing to carry risk.

If a nation does not refine its own gifts into capital, someone else will do it on its behalf — or those gifts will remain useless in the ground while the nation grows poorer above them. This is a brutal thought, but that is exactly why it must be said out loud. A gift that is not used does not ultimately remain a strength. It becomes a lost opportunity.

Greenland is a cold Nordic reminder of this.

Denmark has succeeded in keeping Greenland administratively tied to the West, but it has not succeeded in making it wealthy. This is a brutal but justified observation. Greenland has minerals, an Arctic location, and geopolitical value, yet its economy still relies heavily on fishing and Denmark’s annual block grant. If owner-thinking had been strong, Greenland should by now be one of the strategic production and raw- material centres of the Arctic. Instead, it remains largely a potential that other great powers are now watching.

This is not only about natural resources. It is about responsibility. If responsibility moves too far away from people, families, communities, and real owners, a resource easily becomes something to be administered rather than wealth to be built.

The same applies to other responsibilities in society. Caring for one’s parents was, for a long time, primarily the responsibility of the family, the wider kin, and the community. The modern state gradually transferred many of these responsibilities to itself, while continuously expanding its own role in society. In many areas, this brought security, stability, and predictability. But if the balance is lost, the system begins to resemble a structure in which production and capital formation are treated as an almost inexhaustible source for ever-growing, centrally managed obligations.

At that point, the problem is no longer only economic. It becomes moral and cultural. If responsibility moves too far away from the individual, the sense of ownership also disappears. And when the sense of ownership disappears, the ability to build for the long term gradually disappears with it.

Finland’s question is ultimately this: have we used the talents entrusted to us, or have we buried them in the system?

At Voima, we have not stayed still waiting for someone else to answer this question. We are building our own answer in practice: a system based on real assets, ownership, technology, and long-term capital formation. We are not doing this because the path is easy. We are doing it because we believe this is the right direction.

– Marko Viinikka
Founder, CEO
Voima Gold Oy

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.