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Danes Surprised at Top Rank in Quality of Life

October 09, 1986|From Reuters

COPENHAGEN — A recent American survey ranked Denmark as the world's top country in terms of quality of life--a rating which has surprised some Danes, faced with growing social unrest and economic problems.

The survey, conducted by the University of Pennsylvania, assessed 124 countries in terms of social, political and cultural factors together with normal economic indicators.

Denmark finished first because of its high standard of living, superior welfare services, regard for human rights and democratic traditions, lack of earthquakes and other natural disasters and its low level of militarism.

It was followed by Italy, West Germany, Austria, Sweden, France, Norway, Ireland, the Netherlands and Belgium in the top 10, with Britain at No. 12.

But although it enjoys the highest material standard of living in the European Community, commentators note that Denmark continues to suffer from acute economic problems that threaten its cradle-to-grave welfare system.

The government has predicted a state budget surplus this year for the first time since 1974, and unemployment and inflation rates continue to fall. But the balance of payments deficit still causes alarm.

Last year's record deficit of $3.6 billion is likely to be repeated this year, despite four major austerity packages in the last 18 months. Further measures are widely predicted this autumn to quench Denmark's galloping domestic consumer demand.

Danes are among the most highly taxed people in the world. According to recent Organization for Economic Cooperation and Development figures, Denmark's tax burden represents 49% of gross domestic product (GDP), a figure exceeded among organization members by Sweden alone.

Direct taxation accounts for 70% of state revenue and Denmark has a standard income-tax rate of 49%. Value added tax, at 22% on nearly all goods, makes the country expensive for foreign visitors and residents alike.

With net foreign debt approaching $32 billion, some commentators have openly questioned how long Denmark can afford its sophisticated welfare state.

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