Norway is one of the richest countries in the world.
While there are many different economic factors that contribute to what makes a country poor or rich, the primary association with Norway’s wealth is the discovery of the North Sea oil.
Linked to this oil, is the Norwegian Government Pension Fund Global. The fund is an investment in the future of Norway. It is an economic plan put in place for when the oil runs out. The current market value of the fund is 8 292 billion NOK (£772 billion). It generates a 5.9% annual return.
While some speculate on how Norway would cope without its oil, there are other factors contributing to Norway’s wealth.
Thorvaldur Gylfason, Professor of Economics at the University of Iceland, wrote in 2008 that Norway was set apart from other oil exporting countries. “Norway was a well functioning, full-fledged democracy long before its oil discoveries,” he wrote.
Gylfason believes that it is thanks to Norway's established democracy that the resources were able to be used and exported in the way they were. This was not the case for all countries that discovered oil. In some cases, the natural resources were grabbed and hoarded, as could happen under a dictatorship.
Investment in alternatives
Another nod to the future is Norway's investment in electric vehicles. The goal for all cars with a Norwegian registration to be emission-free by 2025 was followed by the aim for all domestic flights to be 100% powered by electricity by 2040. 18 June 2018 saw the first flight of an electric aeroplane in Norway.
A survey commissioned by the Norwegian Electric Vehicle Association and Nordic Energy Research indicates that 45% of all the cars sold in Norway during 2018 will be electric powered or hybrid vehicles.
There are those that see Norway’s investments in sustainable green solutions and electric powered vehicles as a paradox. However, the investment in an environmentally friendly future that is not dependent upon oil seems to be a smart move by Norway, to ensure that their wealth will continue once the oil has run out.
We believe that information should be free and will therefore never put up a paywall.
If you like reading our reports about the Scandinavian business scene and would like to donate towards the upkeep of the site, we would be very grateful. Click here to donate.