DESPITE RISING unemployment, Sweden relaxed its immigration rules last week giving companies a free hand to recruit foreign workers without quotas.
While the country has a liberal approach to asylum seekers, accepting more Iraqi refugees than the US and Canada combined, employers groups have long complained that labour immigration was too restricted.
The new approach represents a significant blow to Sweden's renowned social model, undermining the powerful role of trade unions. Previously unions had to be consulted before workers were hired from abroad and the national employment agency required proof that the skills were not available at home.
Critics argued that it effectively closed Sweden to foreign labour.
"This is a huge change for the better. Until now it was very difficult for non-EU citizens to come and work here despite the fact that we have skills shortages," said Karin Ekenger, a labour market analyst at the national employers' organisation, the Confederation of Swedish Enterprise.
"Even though unemployment is rising, as it is all over Europe, we still can't find enough people in areas like healthcare, engineering and IT."
Under the new system, once a job vacancy has been advertised nationally and across the EU for two weeks, companies can choose to recruit further afield and need only inform the migration ministry. The rules also allow asylum seekers whose applications have been refused to be granted work permits as long as they have been employed in the country for six months.
The Swedish economy is heavily dependent on exports and global giants from Volvo to Electrolux, affected by the economic downturn, have announced major job losses and redundancies in recent months. Unemployment is expected to increase from the current 6 per cent to close to 10 per cent by 2010.
Despite the downturn, the centre-right government pressed ahead last month with a charm offensive in India, aimed at promoting Sweden as a destination for job seekers.
"Sweden is ahead of many countries in arming itself for the future with these new rules. With an ageing population both the private and the public sector need to be able to recruit the labour force that they need," said migration minister Tobias Billström during the visit to Delhi and Mumbai.
"It's especially important during a downturn to ensure that businesses capable of expanding their activities are able to do so without being hindered by unnecessary bureaucracy."
With the exception of a minority of extreme right-wing activists, there is widespread support in Sweden for liberal immigration policies. However, the main opposition Social Democratic Party claims the new law will expose immigrants to exploitation and drive down wages. "It will become easier for unscrupulous employers to exploit immigrants and pay lower wages. This is already a growing problem in the black economy and the new system will make things worse," said Magdalena Streijffert, a social democrat member of parliament.
"It's also dangerous to include asylum seekers in the new rules. People should be judged on the reasons why they came here, not on whether they have found a job. Asylum seekers are extremely vulnerable and afraid to be sent home so they'll be prepared to work for any pay and in the worst conditions."
Despite government assurances that collective bargaining agreements between unions and employers will continue to apply in the new system, Swedish trade unions argue that employers have been handed a carte blanche to recruit cheap labour.
"Now employers can make appointments based on the lowest wages rather than competence. When trade unions were involved they acted as a safeguard and monitored pay rates and conditions," said Monika Arvidsson, an economist at Landsorganisationen, a trade union organisation.
However, industry groups argue that companies will use their new found freedom wisely.
"The first choice will always be to recruit close to home unless there are shortages," said Karin Ekenger.
"But in a globalised world, nationality is less important and we need to recruit on the basis of competence and experience."