Norway: Where Socialism (Oh No!) Shines
July 1, 2009
Yngve Slyngstad, Chief Executive Officer of Norges Bank Investment Management (NBIM), attends the presentation of 2009 first quarter results of the Norwegian Government Pension Fund - Global in Oslo May 20, 2009. REUTERS/Scanpix/Stian Lysberg Solum
Europe’s economy will contract, on average, 4.6% this year, according to the European Central Bank (ECB). Norway’s economy? 1%.
In fact, Norway has weathered the economic recession so well that when world stock markets were at their lowest levels in years Norway’s government gobbled up nearly $60 billion dollars worth of cheap stocks – just before stocks began their slow, if inexorable, recovery. As a result, Norway’s sovereign wealth fund is one of the fattest in the world, and the country’s GDP per capita, at $52,000, is one of the highest in Europe.
How is this economic success story – made even more palatable and enviable during the current recession – possible? According to the NY Times, the secret is in the (black) gold: instead of spending oil profits from its vast off-shore oil reserves (which make it the 3rd largest exporter of oil in the world), Norway saved the profits, even decreasing spending at times. Their state welfare program is still reaping the benefits, sustaining many Norwegians for most of their lives.
The ironic rub? Norway’s finance minister is socialist. If only Senator McCarthy were alive today…
-Chris Hildebrand
