The Secret of Norway’s Success

The Secret of Norway’s Success | Previously published at JohnBrianShannon.com by John Brian Shannon

Sweden, Norway, Finland and Denmark (collectively the Nordic countries) have a combination of high living standards and low income disparity that has captured the world’s attention. At a time when the growing gap between the rich and poor has become a political hot button in developed nations, the region known as Scandinavia has been cited by many scholars as a role model for economic opportunity and equality.” — Investopedia.

Norway flag
Norway has captured the world’s attention with its high living standards and its low income disparity. Norway flag. Image courtesy of www all-flags-world com

There isn’t a country in the world that shouldn’t be able to match the high living standards set by Norway

Norway provides us with an example that all nations should strive to meet or exceed within a few years’ time

In fact, if we’re doing it right, the stellar Norwegian example will come to be seen as the standard for successful economic policy, instead of the outlier.

But first, let us count the ways that Norway succeeds:

  • The highest accumulated revenue surplus in the world, worth $1 Trillion (held in a sovereign pension fund)
  • Strong and steady GDP growth (see chart below)
  • Very low Debt-to-GDP (see chart below)
  • A #1 to #4 ranking on the UN Happiness Index (varies by year)
  • A #1 ranking on the Social Progress Index (see chart below)
  • Typically a #1 or #2 ranking on the highest per capita income in the world
  • In the Top 5 worker productivity rankings in Europe (and by extension, the world)
  • One of the lowest crime rates in the world
  • One of the ‘least corrupt’ nations. Ranked #5 on the Corruption Perception Index
  • An average 2.5% unemployment rate (except during the global financial crisis where it shot up to 5.5%. Not to worry, it’s already fallen to 3.0%)
  • Free university tuition for all citizens and residents
  • Free universal healthcare ranked 7th in the world (It would rank higher, but maintaining full-service Hospitals in remote regions with tiny populations is uneconomical)
  • Virtually 100% of the country is powered by renewable energy except for some remote settlements where a microgrid (natural gas power) is the only choice
  • Unparalleled diplomatic credentials. Everyone knows Norwegians are among the best ‘honest brokers’ in the diplomatic world making Norway the ‘go-to’ arbitrators for nations in crisis
  • A favorite country of the Olympics committee having hosted successful games twice in recent years

Do you think Norway’s success happened by accident?
Do you think Norway’s success only happened since 1990 when oil and gas began to be extracted off the Norway coast?

Well, you’d be wrong on both counts.

The economy of Norway has grown at a rate better than that of any developed nation stock market, just as it was designed to do. And growth rates were steady prior to the large-scale extraction of petroleum in the country, and remain steady.

Say again?

Yes, you heard right. The growth rate of the Norwegian economy beats many stock market indices as measured over the decades.

Who wouldn’t want to invest in Norway’s public/private investments, in Norwegian business generally, and in the highly educated workforce with its high productivity rate and so much more?

Norway GDP from 1960 - 2015
Norway GDP growth from 1960 – 2015. Source: tradingeconomics.com

Successive Norwegian governments have limited deficit spending to a maximum of 4% of GDP during the ‘bad years’ — and used budgetary surpluses to paydown government debt during the ‘good years’

Here’s what that looks like.

Norway Debt-to-GDP
Norway Debt-to-GDP. Generally, Government debt as a percent of GDP is used by investors to measure a country’s ability to make future payments on its debt, thus affecting borrowing costs and government bond yields. Last updated on December of 2015. Source: tradingeconomics.com

Norway’s success didn’t happen by accident, nor did it occur after suddenly striking it rich in the undersea oil and gas fields

Other countries have struck it rich by discovering oil (or other massive resources) and haven’t experienced the positive outcomes seen in Norway. Where are their UN Happiness Index ratings, or productivity stats, or their per capita income stats? Nowhere near Norway’s, that’s for certain.

So why Norway?

Maybe the question should be, “Why only Norway and not every country?” — as every country could and should be seeing the same level of success as Norway.

Some people might question that their particular country, large or small, could excel like Norway.

But low ambition is the enemy of great accomplishments

If you aim low you’ll surely meet your goals. Conversely, if you aim high, you’re likely to excel. The Norwegians aimed high and succeeded — and good for them!

Aiming High

Many years ago, everyone believed that it was impossible for a human to run a 4-minute mile. And with each retelling of that erroneous belief it became that much more true.

After all, if it was that impossible, why bother trying to run a 4-minute mile?

Yet, one man, Roger Bannister from England, decided that he would aim high and run a mile in less than 4 minutes. And not long after making that decision, he did.

Since Sir Roger exceeded that expectation, many thousands of athletes have run the 4-minute mile. It’s almost commonplace nowadays for professional athletes to run a 4-minute mile as part of their overall training programme to prepare for competition.

Norway is the Roger Bannister of nations!

By getting the fundamental economics right, Norway set itself up to succeed every time an opportunity to succeed, appeared. And that in a nutshell, is the measure of successful governance.

Norway with its smallish, mostly ice-covered landmass and its tiny population of only 5.1 million residents has $1 Trillion dollars in the bank!

It’s true. The Norwegian government has carefully invested its revenues and sharply limited government spending to the point that the Norwegian government may not (by law) run a budget deficit of more than 4% in any given year.

By limiting spending in this way, it allowed government revenues to accrue ‘during the good years’ while the economy was booming, and it limited spending during the lean years.

“But Norway is rich because of their offshore oil and gas revenues.”
If oil and gas are the reason Norway is doing so well, then why was Norway wealthy and well-governed prior to the exploitation of their offshore oil and gas?

“Well then, Norway was rich because of its offshore fishing industry.”
But Norway was wealthy and well-governed even before large-scale commercial fishing fleets ruled the seas.

“Norway must be rich from its tourism industry.”
Yet the booming Norwegian tourism industry is only a recent development.

“But Norway must have been rich because of its strong timber industry.”
The same applies. Norway was a wealthy and well-governed country prior to large-scale mechanized forestry.

This conversation could go on for some time… so let me shorten it up for you.

The reason that Norway excels is because Norwegian politicians of all stripes agreed long ago that Norway should ‘live within its means’ and bank surplus government revenues for use in later years

And it has worked wonders for the Norwegian economy, for Norwegian citizens and non-citizen residents, and for global investors.

It isn’t all about the resources! It’s all about the good stewardship!

By strictly applying the Norwegian model of governance every country could see similar levels of success.

Some people might say, “Well fine. But our country has no resources.”

But every country has resources of some kind. There isn’t a country in the world that couldn’t maximize its resources to match or exceed Norway’s stellar example.

And Hey! Citizens are a ‘resource’ too. Just look at Taiwan’s success! And that high level of success occurred despite it being a land of very limited natural resources.

I challenge anyone to make the case that their country couldn’t excel given 10 years of strict application of the Norwegian economic model

You can’t win that argument. Even ice-covered Norway with only 5.1 million citizens, is an easy winner in the competition for the most successful nation as measured by per capita statistics.

They Began with the End Result in Mind

Including the most important statistics of all — a very high ranking on the UN Happiness Index and the Social Progress Index — the stats from which all other positive stats flow. (Say that three times, to let the profundity of that statement to sink in)

Social Progress Index 2015
It’s Norway (again) taking the Number One spot on the Social Progress Index.

Again, it isn’t about the resources it’s about advanced governance

In Norway, it’s about helping businesses to thrive — while putting the well-being of citizens and residents first!

It’s about ensuring a strong, stable, and vibrant society, and it’s about ensuring excellence in economics and governance.

And that, my friends, is the secret of Norway’s success.

Norway EV Sales Hit 23% of all New Car Sales

Norway Electric Car Sales = 23% Of The Market (Again)

The numbers for Norway EV sales are “in.” Official numbers are not provided for several models that share a base name with gasmobiles, so José Pontes has made estimates for them and we’ll just have to go with his numbers. Why a country with such a developed electric car market won’t break out their numbers… Continue reading Norway EV Sales Hit 23% of all New Car Sales

Renewable Energy Policy can Save the EU

Originally published at JohnBrianShannon.com by John Brian Shannon

An accelerated switch to renewable energy is the path to EU jobs and prosperity

Europe is on shaky ground. There is even talk in some quarters that the euro, and consequently the EU, may not last a year.

Critics of the European Union are predicting that continued austerity measures, the elections in Greece, petroleum price instability, and Russian moves in Ukraine will conspire to topple the European Union.

Of course, this is a subject of ongoing debate. EU backers say that the present economic morass will end and that the UK and other European nations will join as full European Union members in the coming months, resulting in a unified and complementary union ready to take on the challenges and opportunities of the 21st century.

Success Stories Throughout History

Throughout history, various leaders have ‘risen to the occasion’ to provide visionary leadership — seemingly ‘rising out of nowhere’ to inspire great love among the public for a cause, and on account of their great vision and leadership impossible feats occurred on their watch due to the combined willpower of millions of thereby-inspired people.

People are individuals, and no matter how many individuals there are in a country or in a larger economic union like the EU, at the end of the day every one of them are individuals living inside a larger society. Therefore, leaders must appeal to those things important to their citizens.

In Life; All a person really needs, is a person (or something) to love. If you can’t give them that, give them hope. If you can’t give them that, at least give them something to do.

Leaders who can inspire love for the country through their vision and charisma, have the effect of giving each individual in the country something to love. Or at the very least, give them hope.

Where would the United States have been without FDR?

The New Deal was a series of domestic programs enacted in the United States mainly between 1933 and 1938. They included laws passed by Congress as well as presidential executive orders during the first term (1933–37) of President Franklin D. Roosevelt.

The programs were in response to the Great Depression, and focused on what historians call the “3 Rs”: Relief, Recovery, and Reform.

That is Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression. — Wikipedia

The success of the New Deal is beyond dispute. Without it, the United States would not be half the country that it is today.

Where would Great Britain have been without Winston S. Churchill?

Sir Winston Leonard Spencer-Churchill was a British politician who was the Prime Minister of the United Kingdom from 1940 to 1945 and again from 1951 to 1955.

Widely regarded as one of the greatest wartime leaders of the 20th century, Churchill was also an officer in the British Army, a historian, a writer (as Winston S. Churchill), and an artist. Churchill is the only British Prime Minister to have won the Nobel Prize in Literature since its inception in 1901, and was the first person to be made an honorary citizen of the United States. — Wikipedia

In between lecturing Hitler and Mussolini via his weekly radio broadcast, Winston Churchill painted a realistic picture of Great Britain for his citizens, and painted another realistic picture for them what life would be like under occupation.

Rather than be cowed by a more powerful aggressor, Churchill inspired his people to valour and sacrifice. And they responded powerfully.

What would our 21st century world have become had Mohandas K. Gandhi not perfected the art of non-violent protest?

Mohandas Karamchand Gandhi was the preeminent leader of Indian independence movement in British-ruled India. Employing nonviolent civil disobedience, Gandhi led India to independence and inspired movements for civil rights and freedom across the world. Indians widely describe Gandhi as the father of the nation.

Gandhi famously led Indians in challenging the British-imposed salt tax with the 400 km (250 mi) Dandi Salt March in 1930, and later in calling for the British to Quit India in 1942. He was imprisoned for many years, upon many occasions, in both South Africa and India.

Gandhi attempted to practice nonviolence and truth in all situations, and advocated that others do the same. Gandhi’s vision of a free India was based on religious pluralism.

His birthday, 2 October, is commemorated as a national holiday, and world-wide as the International Day of Nonviolence. — Wikipedia

Imagine if every protest movement since 1947 hadn’t been influenced by Gandhi. Almost certainly, the anti-Viet Nam protests and the civil rights movement in 1960’s America would have led to civil war.

Due to Gandhi’s example, individuals who were part of the anti-war movement or the civil rights movement protested — peacefully for the most part — and to great effect.

John F. Kennedy’s decision to not be cowed by the USSR’s Nikita Khrushchev, led eventually, to the end of the Soviet Union

Had JFK not stood up to Soviet adventurism in Cuba and South America, the geopolitical world would have evolved very differently The USSR would have, in short order, controlled the Western democracies completely.

By utilizing the economic advantage, by ordering a Moon shot, and by not backing down against the communists in Viet Nam, JFK neatly avoided playing the Soviet gameplan — and instead played a gameplan that favoured the strengths of the democratic West.

All of these visionaries gave citizens reason to — love their country, to hope for a better future, to employ their good will and energies — towards solving the almost unsolvable problems of their time. (Love, Hope, Do)

Without that overarching vision promised by their political leaders, without that hope in their hearts, and without some means to express their goodwill and energy, citizens wouldn’t have united in large numbers to solve the near-insurmountable challenges of their time.

Now is the time for visionary EU renewable energy leadership

The case for the EU to adopt a ‘50% renewable energy by 2020’ portfolio and make it an ‘air quality and jobs mission’ for citizens and governments alike:

The vast majority of Europeans want a renewable energy future.

They know that the technological hurdles have been overcome, they know that many Pacific Ocean island nation-states and Indian Ocean islands now run on 100% renewable energy, they know that Norway is powered by 100% renewable energy and that Iceland has surpassed 76% renewable energy use.

They know that Sweden gets 51% of its energy from renewable energy, and that Latvia, Finland, Austria, and Denmark aren’t far behind. They see Estonia, Portugal, and Romania getting more than 25% of their electricity from renewable energy and they see Germany’s Energiewende setting stellar records for renewable energy output every month.

Other nations in Europe have surprisingly advanced renewable energy programs and some EU nations will surpass their renewable energy target before 2020.

Renewable Energy provides massive employment opportunities

And it is becoming apparent that when compared to the fossil fuel industry, the renewable energy industry provides thousands more jobs per million people. Always handy that, a job to go to.

Energy Price Parity and Subsidy Regimes

Not only has some renewable energy approached price parity with conventional energy, in some cases it has surpassed it. Especially when the massive global fossil fuel subsidies that topped $600 billion in 2014 ($550 billion in 2013) are factored in.

Meanwhile, global renewable energy subsidies barely hit $100 billion in 2014, the majority share of it spent in China.

Worried about fossil fuel subsidies? That’s nothing compared to fossil fuel externalities

Fossil fuel subsidies of $600 billion (globally) are one thing. But it now appears that the economic totality of fossil fuel cost to healthcare systems, to livestock health, the agriculture sector, the global climate, regional climate (local drought or flooding) and damage to outdoor concrete and metal structures may now exceed $2 trillion dollars per year.

China reports 410,000 premature deaths per year are due to air pollution. The U.S. admits to 200,000 premature deaths by air pollution and as many as 400,000 premature deaths per year occur in Europe due to our overuse of fossil fuels.

If you add the global rising fossil fuel subsidies of $600 billion to the global externality cost of fossil fuels, it equals approximately $2.6 trillion (globally).

How much renewable energy can we get for $2.6 trillion dollars, please?

It’s not that fossil fuels are intrinsically bad, or evil. It’s not that the people who run those companies are bad, or evil. It’s not the shareholder’s fault either.

It’s just that too many of us are using fossil fuel.

And nobody is forcing us to buy it. If there are reasonable alternatives to fossil fuel overuse, then citizens are making a conscious decision to pollute the air, rather than choose those alternative forms of energy.

But if no alternative exists for citizens to purchase (and yet consumer demand is there) that is primarily the fault of policymakers.

The solution to the fossil fuel subsidy and externality problem in the EU? Renewable energy

With the right vision and the right leadership, getting the EU to a 50% renewable energy minimum standard by 2020 is eminently possible.

There are no technological hurdles that haven’t been solved.

There simply exists no public outcry against renewable energy power plants.

Grid parity (with low subsidy) is now the norm — even against massively subsidized fossil fuel and nuclear power.

And several countries around the world already run on 100% renewable energy. One of them is in Europe. (Norway) So it can be done.

It’s not about; How much will switching to renewable energy cost us?

It’s now about; How much will renewable energy save us?

Each one euro spent on renewable energy installations (actual installations, not more endless research) could save two euros of fossil fuel subsidy and three euros of fossil fuel externality cost — although there is a time lag involved before healthcare systems, ranchers, farmers, and owners of infrastructure see declining costs.

Following the 1/2/3 fossil fuel subsidy and externality equation, we see that if the EU suddenly installed 10 billion euros worth of wind turbines and solar panels (displacing the equivalent amount of fossil electrical generation) the EU would save 20 billion euros of subsidy, and would over 25 years, save 30 billion euros in heathcare costs, costs to livestock health and agriculture, and outdoor concrete and metal infrastructure repair costs.

Spending 10 billion to save 50 billion — for a net save of 40 billion euros over 25 years. Not bad.

Spending 100 billion euros to save 500 billion — for a net save of 400 billion over 25 years, that works too.

So, denizens of Europe, how much fossil fuel electrical power production would you like to replace with renewable energy?

The EU should move to a 50% renewable energy portfolio by 2020 and make it a priority ‘mission’ for citizens and governments alike. An energy ‘New Deal’ for EU citizens

In order to plan for a clean EU energy future, we need to look at where the European Union is today and make a responsible plan, one that displaces fossil fuel electrical power production without placing undue economic hardship on existing electrical power producers.

A ‘can-do’ attitude that doesn’t ignore the many positives associated with an EU-wide 50% renewable energy standard will be required to meet the challenge

Present EU renewable energy targets by 2020 could easily be ramped-up across-the-board to 50%. NOTE: Sweden is already there, with Latvia, Finland and Austria not far behind.
EU 2020 renewable energy targets could easily be ramped-up across-the-board to 50% renewable energy usage. NOTE: Iceland and Sweden have surpassed the 50% renewable energy threshold, with Latvia, Finland, Austria and Denmark not far behind.

The best candidate for an EU-financed switch to renewable energy?

Malta is presently striving to meet its target of 10% of energy demand from renewable sources by 2020. However, Malta could easily convert to 100% renewable energy in as little as 24 months.

Malta is a tiny island nation and other tiny island nations have successfully transitioned to 100% renewable energy — and it took them only a few short months to accomplish that goal.

Malta’s electrical grid produces 571 MW at peak load and uses expensive imported fossil fuels.

Replacing Malta’s fossil fueled electrical grid with a combination of offshore / onshore wind turbines and solar panels is well within our present-day technical capabilities and would save the Malta government millions of dollars per year in fuel and healthcare costs.

A low-interest loan from the EU to cover the capital cost of wind and solar power plants and some basic technical support is what Malta needs. Nothing more complicated than that.

How would replacing Malta’s present electrical power generation with 100% renewable energy benefit the EU and the residents of Malta alike?

It’s a given that all of the wind turbines and solar panels / inverters, etc. would be sourced from the EU. In fact, European sourcing could be a requirement of obtaining the EU financing for the project.

All of the engineering, manufacturing and installation / grid connection would be performed by EU workers.

Malta’s residents and visitors would thereafter enjoy clean air, lower healthcare costs, better quality of life, and could say goodbye to toxic and expensive, imported oil.

From 10% to 100% renewable energy within 24 months — now that would demonstrate political and environmental leadership!

Granted, Malta has the smallest electrical grid in the EU. But it’s a place to start, a place to set a baseline for the learning curve to 100% renewable energy on a per country basis, and a place to test out the actual economic inputs vs. outputs, with minimal investment.

By starting with island nations and converting them to 100% renewable energy, solid standalone renewable energy power generation experience is gained, and once completed, can serve as models for standalone systems on the continent.

To get to 50% renewable energy in other EU states requires similar measures but on a larger scale than Malta. (Low interest loans from the EU, requirement to source all equipment, materials, and labour from EU nations, and some amount of renewable energy expertise)

Some European Union nations wouldn’t need all that much investment to make the step up from their planned 2020 targets. Some will already have attained at least 30% renewable energy, assuming they hit their planned targets. Other nations have small populations, and therefore, wouldn’t need all that much capital to hit the 100% mark, let alone a 50% renewable target by 2020.

The Next Step for the EU

During the darkest days of recession in early 1980’s America, newly-elected President Ronald Reagan didn’t appear and suddenly solve America’s economic problems.

He told Americans (very convincingly) that they had it in their power to solve their own economic problems and arranged some temporary loans to Chrysler and other companies — and cheered by his vision and leadership, they responded powerfully — ending America’s recession.

Someone in the EU needs to step up now, leading the charge to improve EU air quality, to lower the rate of illness and premature deaths due to air pollution, to lower the damage to livestock and agriculture, and to concrete and metal infrastructure — thereby creating tens of thousands of well-paying jobs — by insisting on a minimum of 50% renewable energy standard by 2020 for all EU nations.

And that great, overarching vision in itself, will be the thing that EU residents will love, hope for, and willingly agree to do, for the next five years. Neatly ending the EU’s present recession.

Let’s roll up our sleeves, people. We’ve got work to do.

Related Article:

If Norway can succeed like this, why can’t every nation?

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Cruise ship navigates northern Norway coastline. Image courtesy of visitnorway com
Cruise ship navigates Norway coastline. Image courtesy of visitnorway.com

Let’s look at Norway, a tiny nation of 5.1 million people. Norway has a medium-sized undersea petroleum reserve, some timber resource and proximity to the largest market in the world. It also once boasted a booming fishing industry, however, with fish stocks in decline only a fraction of that former fishery remains.

On the bright side, Norway has more scenic views per kilometre than anywhere on the planet.

But other than that, the long and narrow, mostly empty country that exists along the North Sea spends most of the year under a blanket of snow, ice, and bitter cold.

Norway makes the best of its opportunities

And yet, Norway has made the most of its opportunities, ranking regularly in the top 5 places to live in the world, personal income ranks in the top 5 in the world, in the top 5 education systems in the world, and in the top 10 health care systems in the world. In many other measures Norway ranks among the top 10 globally.

How did little Norway, with only 5 million people, few resources, and buried under a blanket of cold and snow for 6 months of the year, manage all of that and so much more?

As is so often the case, the answer is found within the question itself. Good management!

Many nations have more generous helpings of natural resources and opportunities available to them compared to tiny Norway, and yet for some strange reason they can’t claim anywhere near Norway’s economic success and resultant quality-of-life for residents.

Norway overcame many obstacles to get where it is today, and chief among them was bad advice!

At Norway’s entry into the petroleum market after discovery of undersea oil and gas reserves in the 1969, the Norwegians were told that oil companies would leave if they weren’t granted exemption from the country’s high taxation, stalling any future development.

The Norwegians were also told that high personal tax rates would cause a flight of capital from the country and that executives and professionals would flee to greener pastures, leaving only a blue collar economy behind which would require Norway to thenceforth hire expensive foreign consultants to conduct the government’s business, high finance and corporate law.

Norway was also warned over-investing in its health care system and education systems could wreck their overall economy.

And the Norwegians were told that their country was too cold, too forbidding, and too isolated to have any kind of serious tourism business.

Well, lets look at how it all turned out, shall we?

  • With less than 1% of the world’s population, Norway’s economy has reached 22nd (nominal) / 46th (PPP) out of 191 countries, according to the CIA Factbook, with an average of 3.5% (2013) growth throughout the economy
  • Norwegian public debt is very low at 30.3% of GDP (2012)
  • Norway’s high productivity score, ranked #15 by the World Economic Forum in 2012 still puzzles economists worldwide
  • The WEF also scored Norway at #3 globally for its macroeconomic environment in 2012
  • Norway’s inflation rate is stable at 2.2% (2013)
  • Unemployment is stable at 3.3% (2013)
  • Norway maintains an AAA credit rating with the financial rating agencies (2012)
  • Norway’s entire economy produced $499.8 billion GDP with 3.1% growth in 2012
  • Out of that $500 billion dollar economy, Norway maintains one of the highest per capita incomes in the world at; 492,000 NOK / $79,104 (2013) (PPP) which places them at (3rd) position in the world
  • Monthly incomes for all employees, including male and female, full time and part time workers in the country rose 3.9% from 2012 to 2013, averaging 41,000 NOK / $6592, per month (2013)
  • Norway donates almost 1% of GDP each year to worthy causes around the world, amounting to slightly over $2 billion dollars of foreign aid annually.
Norway personal income chart 2013
Norway personal income chart 2013

Norway Healthcare

In 2000, healthcare in Norway was ranked by the WHO at 11th position in the world out of 191 countries, but in 2014 was ranked at 7th position by Commonwealth Fund Group in a comprehensive study of the top 11 healthcare systems in the world. See: The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries comparison charts here.

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries
The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries

Tourism in Norway

The official emblem of the 1994 Winter Olympics in Lillehammer, Norway is a stylized aurora borealis (northern lights) and snow crystals.
The official emblem of the 1994 Winter Olympics in Lillehammer, Norway.

Although the incredibly scenic fjords are unavailable for tourism six months of the year, the picturesque cities dotting Norway’s far-flung fjords welcome thousands of cruise ship travelers all summer and are a vital contributor to the country’s economy. Inland, various scenic driving and hiking tours are available and a surprising number of homeowners advertise bed-and-breakfast accommodations.

Skiing and snowboarding facilities exist country-wide and the Norwegian’s have capitalized on all six months of snow and cold temperatures, bringing a combined tourism industry from almost nil, to a multi-billion dollar level with four decades of dedicated effort.

The Lillehammer Winter Olympics officially known as the XVII Olympic Winter Games were held in Lillehammer, Norway in 1994. Norway’s capital city of Oslo held the 1952 Winter Olympics.

Total tourism revenues at the height of the global financial crisis in 2009 were in the neighbourhood of $6.6 billion dollars (direct and indirect) and $319 million dollars (direct) annually.

Norway’s Oil and Gas industry

Norway extracts 1.92 million barrels per day from its North Sea crude oil reserves and also extracts some 200,000 Million square metresᶟ (oil equivalent) of natural gas.

Petroleum profits are taxed at 78%, which nets Norway significant annual revenue. Even with the highest oil and gas taxation on the planet, Norway has no shortage of oil companies willing to exploit the medium sized offshore reserves.

One of the companies involved in Norway’s oil and gas industry is (67% government-owned) Statoil, Norway’s state oil company. It is the 11th largest petroleum company in the world, reporting gross revenues of $723 billion dollars in 2012.

Norway Petroleum Directorate
Norway Petroleum Directorate. History and forecast for oil and gas extraction graphic in millions of square metresᶟ oil equivalent, per year.

Why does Norway have $700 billion dollars in the bank? And why did it pass legislation to never spend more than 4% of the total in any given year?

While there’s no question that Norway has done well from its oil and gas, unlike many resource-based nations, Norway has invested its petro dollars in such a way as to create and sustain other industries where it is also globally competitive. The second largest export of Norway is supplies for the petroleum industry, points out Ole Anders Lindseth, the director general of the Ministry of Petroleum and Energy in Norway.

“So the oil and gas activities have rendered more than just revenue for the benefit of the future generations, but has also rendered employment, workplaces and highly skilled industries,” Mr. Lindseth says.

Maximizing the resource is also very important. Because the government is highly invested, (oil profits are taxed at 78 per cent, and in 2011 tax revenues were $36-billion), it is as interested as oil companies, which want to maximize their profits, in extracting the maximum amount of hydrocarbons from the reservoirs. This has inspired technological advances such as parallel drilling, Mr. Lindseth says.

“The extraction rate in Norway is around 50 per cent, which is extremely high in the world average.”

In 1990, the precursor of the Government Pension Fund – Global (GPFG), a sovereign wealth fund, was established for surplus oil revenues. Today the GPFG is worth more than $700-billion.

The GPFG wealth fund is largely invested outside Norway by legislation, and the annual maximum withdrawal is 4 per cent. Through these two measures, Norway has avoided hyper-inflation, and has been able to sustain its traditional industries. — The Globe and Mail

Norway fishing and seafood industry

The wild and farmed fishery and non-fish seafood industry in Norway accounts for billions of dollars of economic activity. Exports totaled $7.1 billion dollars in 2009, $3.8 billion of that from aquaculture. In 2011, aquaculture alone had grown to $4.9 billion.

Guided by the Norwegian government, the fishery has grown into a sustainable industry that meets the needs of Norwegian’s and continued growth is expected for fish and other seafood exports.

Summary of ‘the little country that could’

Rather than complain about the cold weather most of the year, Norway took a long look at its assets and location and decided to make the best of it. A telling refrain you will hear in the Nordic countries is, “There is no bad weather, only bad clothing.” That, in a nutshell, is the Nordic mindset.

Indeed, this speaks volumes about who they are as a people. If you want to go out, you dress appropriately. This worldview seems to have assisted the Norwegians to make the most of their opportunities by taking stock of prevailing situations, and responding appropriately.

Norway: Where ‘what matters most’ — actually matters!

Their guiding principles dictate that the well-being of its citizens must be first and foremost in economic decisions, with care being taken to create a sustainable long-term model.

Ergo, a country of 5 million with limited arable land and harsh winter, simply adapted to their environment and their economic environment. Citizens and non-citizen residents are fairly rewarded for their productivity and loyalty to the country, which further engendered productivity and loyalty.

Norway wisely invested in the country’s future so that all Norwegians can receive a full university or vocational education funded by government taxation and receive free healthcare, and many other citizen benefits. Any resident of Norway — whether they’re a Norwegian citizen or not — can apply to Norway’s public universities and receive a full university education free of charge. The idea behind this is that an educated society brings its own economic benefits and increases the dissemination of knowledge to all corners of the Kingdom of Norway.

Likewise, all residents are covered by Norway’s healthcare service, although it can be challenging for the government to provide timely services to tiny population centres of 10-100 people in very remote parts of the country.

Norway proved it can be done

Putting the needs of citizens first, guaranteeing the safety and security of residents, environmentally-sound development of natural resources and sustainable long-term economic models have placed Norway near the top in all global indicators — and that is in spite of the negatives the country must contend with.

Results matter. Ideology does not

Norway is a model that every country must research carefully to contrast and compare with their own results. Which is what really matters. Results matter. Ideology does not matter.

Let’s hear it for pragmatism!

What matters to Norwegians is the well-being of residents and the strength of the economy, and what matters to the Norwegian government are the ratings of respected indices such as those from the UN, the World Health Organization (WHO), the World Economic Forum (WEF), credit rating agencies and others.

Norway should award itself a Nobel Peace Prize for Excellence in Governance and Society.

Nobel Peace Prize medallion
And, the next Nobel Peace Prize should go to… Norway, for Excellence in Governance and Society.

 

 

 

 

 

 

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