In addition to my earlier pick of Chile, I now must nominate Sweden and Norway for this honor. Both are wonderful countries, and in absolute terms very likely to remain strong performers. But I think a good deal of that old Nordic magic is slipping away, and this has become more evident in the last few years.

Let’s start with Sweden and maybe I’ll get to Norway another time:

1. The average product of their education system seems to have declined rather rapidly, as measured by test scores. On PISA they have gone from #4 to #21.

2. Arguably the basic Swedish economic social model is inconsistent with their level of immigration, and I don’t see them switching to a different economic and social model anytime soon. You can be pro-immigration, and still not think Sweden is honing in on the right mix of domestic policy and immigration policy.

3. Swedish manufacturing seems to be deindustrializing at a faster than expected pace. And some of Sweden’s most successful sectors are exposed to a lot of competition from emerging markets, in particular because they rely heavily on engineering talent. Sweden also has a significant presence in financial services, but they are not an obvious future winner in that area. And do timber, hydropower, and iron — their main commodity exports — have such a promising future? There are probably few disasters lurking here, but lots of question marks.

4. Sweden doesn’t seem to have a lot of low-hanging fruit left. Female participation in the labor force already is high, and they already have done lots of liberalization, privatization, and deregulation. It is not clear where the next generation of policy improvements will come from. The McKinsey report recommends “increasing government productivity” as a major source of potential gains, but that is hardly easy, even for the Swedes.

5. The Swedish central bank seems to have scored an “own goal” by engaging in premature tightening, coming out of the earlier recession. They’ll make much of that up over time, but still it is a sign the country has lost some mojo.

6. Sweden’s household to debt ratio is about 170%, one of the highest in the world. This is not only troubling in its own right, but arguably it is a sign debt is being used to make up for a slow accumulation of underlying economic deficiencies, as was the case in the United States. Furthermore “Four in 10 mortgage borrowers in Sweden are not paying off their debt, according to data collected by Reuters, and those that are repaying the principal are doing so at a rate that would on average take nearly a century.” They are probably still in the middle of a housing bubble.

7. There is an erosion of support for mainstream Swedish political parties. You don’t have to approve of those parties to see this as a symptom of a very slight underlying political rot setting in. The “extreme Right” party has seen a rapid rise in support.

8. A rampaging Putin probably won’t harm them directly, but still recent Russian events raise geopolitical risk in their neighborhood.

Don’t worry, the Swedes will do fine, but they have arrived at officially overrated status. I was more sanguine about their prospects a few years ago than I am today and I would not invest in their stock market. If you wish to count their pluses however, they still have a very good system of government, a strong ethic of trust and cooperation, a good ability to change course when necessary, high productivity, a strong presence in information technology, a wonderful export capacity, low public debt, and first-rate proficiency in English, among other virtues.

That all said, the Swedish currency is actually down against the euro since the beginning of the year.