COPENHAGEN • According to a recent ranking, there is no better place on earth to live than Denmark.
The social progress imperative, a study which was conducted with the help of Professor Michael E. Porter of Harvard Business School and Professor Scott Stern of MIT, measures things like access to the Internet, affordable housing, health care and freedom of expression.
Its findings suggest money is not the only key to happiness. The United States, which boasts a higher gross domestic product per capita than Denmark, ranks 18th in the study.
But Danish Finance Minister Kristian Jensen says his country faces a number of challenges in persuading highly skilled professionals to bring their much-needed expertise to an economy now facing labour shortages.
Part of the problem, Mr Jensen acknowledges, is a perception that Denmark has become less welcoming to foreigners. Local media has been full of examples showing the country's strict immigration laws at work, including, most recently, a Danish astrophysicist who was unable to start a new life with his American wife here.
In an interview in his office in Copenhagen, Mr Jensen said that laws keeping such skilled individuals out are unfortunate. "It's the clear goal of the government to attract skilled labour to Denmark," he said.
But the country's efforts to communicate its immigration policy to the outside world have not always worked, he said.
Denmark is governed by a centre-right minority coalition that holds on to power, thanks to the support of the anti-immigration Danish People's Party. The group, which is backed by about one-fifth of the electorate, wants Denmark to introduce border checks, exit Europe's Schengen arrangement on freedom of movement and to stop accepting refugees.
Mr Jensen's Liberal Party, which has been in power for 12 of the past 16 years, has made immigration rules progressively stricter, tightening 64 times, by its own count. The changes include cutting financial support for asylum seekers and making it harder for foreigners to obtain Danish citizenship.
But without foreigners, Denmark will struggle to solve its labour shortage. The local workforce is not motivated by tax cuts, which makes it hard to provide the kind of fiscal impulse that would normally kick-start growth, he said.
Denmark's economy has been straining to get going in the wake of a local housing market crash and the global financial crisis. The government now sees growth of 1.7 per cent both this year and next, up from 1.3 per cent last year.
"We could easily increase the workforce in Denmark by lowering taxes, but there's no voter appetite for such a policy," Mr Jensen said. "Denmark is peculiar in the sense that tax cuts aren't necessarily popular."
He says without such measures, economic growth of 2 to 3 per cent will be hard to achieve.