Sunday, October 28, 2007


More than a year ago, I noticed an article written by Stefan Karlsson entitled "Norway's National Day" where the author explain how Norway's oil-savings policy and also the recycling of savings accumulated from Norway's oil exports redirected into oil fund which invests into foreign securities and creates huge trade and current account surpluses. In fact, Norway is the third largest exporter of oil in the world after Russia and Saudi Arabia.

Using PPP measure of the GDP, Norway is the 6th wealthiest country in the world, having a per capita GDP at $46,300 USD, surpassing Ireland and the United States (link). High GDP per capita in terms of purchasing power parity is the result of gigantic increases in the GDP in recent decades due to high oil prices and oil exports which benefited the Norwegian economy. It would be a mistake to think that Norway's economic policy reflects its gross domestic product. Public ownership remains high (link). Welfare policies tend to contain a degree of inefficiency and fiscal sustainability (link) is risky in a long term perspective as the petroleum and pension fund are set to decline in its size subject to strong dependency and ageing population pressures (link).

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