STOCKHOLM –Suburbs ablaze with cars on fire and protesters hurling rocks at the police. After a week of violent riots, Sweden and the rest of the world are trying to understand what went wrong in this country, famed for its social model.

The Swedish suburbs were not burned to the ground. Sweden has been through worse, and truth be told, this spate of social unrest doesn’t come close to the riots France and the UK experienced in their suburbs.

Even if this country of 9 million inhabitants is doing rather well – with growth at 1.7% in the first trimester, and healthy public finances – and is still a very civic-minded society, it is in fact going through a rough patch.

“The problem is not a failure of the integration policy, it is that there is no integration policy to speak of -- just rhetoric,” says Irene Molina, professor of cultural geography at Uppsala University. “There is still a lot of structural discrimination in the Swedish society in regard to employment, housing, even going out to nightclubs, and it’s more or less accepted,” she adds.

According to Ove Sernhede, from the Center of Urban Studies: “The rise of inequalities in Sweden’s biggest cities is shocking; more than half the children who grow up there live beneath the poverty line.”

Two studies confirm this observation. The first study, from the Organization for Economic Cooperation and Development (OECD) shows that Sweden is the developed country where the gap between rich and poor expanded the most from 1995 to 2010.

The second study, from Swedish think-tank Migro, showed that Sweden was the worst country in the OECD in terms of unemployment rate among foreigners: 15.9% compared to 6.4% for native Swedes.

In the west Stockholm suburb of Husby, where the riots started on May 19, many families try to enroll their children in Stockholm’s best high schools. Because of the Swedish school system, schools in the suburbs are left with less students – and therefore less funding. Dropout rates are huge, and so is youth unemployment.

While we applaud the Swedish social model, we tend to forget that Sweden was one of the first European countries to deregulate its public services in the mid-1980s.

The deregulation of the financial sector led to the explosion of the housing bubble, which sparked a huge crisis in the 1990s. This led to an austerity policy – although it was never called that – and its effects can still be felt today.

After the right came to power in 2006, suburbs like Husby were set aside and forgotten. Local administrative services were moved to other neighborhoods, which further fuelled frustrations.

Ghetto trap

Many Swedes are victims of where they live. They are trapped in their suburbs, without much hope of being able to leave one day.

This was the case of Zlatan Ibrahimovic before he became an international soccer star. He was born in Rosengard, an impoverished suburb of Malmo, the third biggest city in Sweden. “Malmo was very close,” he wrote in his biography, “but it was another world. I was 17 when I first went to downtown Malmo and I couldn’t understand what was happening there.” Rosengard is a 30-minute walk from Malmo.

The Swedish model is fledgling, even though the country is doing all it can to appear modern, shiny and sleek with its pop music, food and conservative finance minister who wears a pony-tail and earrings and talks like a social-democrat.

Think-tank Migro says one idea to boost employment levels for immigrants would be to reduce wages for low-paying jobs so that immigrants wouldn’t compete with native Swedes for these jobs. This is similar to what conservative Prime Ministers Fredrik Reinfeld told Le Monde in 2009, when visiting an employment agency in the suburbs: “There should be different kinds of jobs. Some of those disappeared from our country. But we need them so that we can reduce youth unemployment.”

To one of the agency’s managers who was saying that Swedish lessons would help in that regard, the prime minister answered that for certain types of jobs, a command of the Swedish language was not necessary. Will the labor sector transform into a two-speed sector, with a cheap and low-level workforce at its base? Unions are gearing up for a fight.

Sweden has a cosmopolitan society – 20% of which is of foreign origin – and is tolerant for many things. But Sweden also has an extreme far-right movement that is thriving.