Sweden’s social contract was built on the ideals of an inclusive welfare state after WWII. Immigration to Sweden, and the fact that it has not been involved in warfare since 1809, have contributed to its economic development. The newest generations of immigrants have arrived from South Eastern Europe, MENA and Africa. Their inclusion in the folkhemmet (literally, people’s home as Sweden was called) has been slow and difficult, as the country has gone through drastic neoliberalisation. In addition, the ethnically Swedish population has maintained their distance from the newcomers. At present, Swedish social contract faces challenges from residential segregation, rising populism, tensions surrounding the crumbling welfare society, and increases in gang-related violence.