I do wonder whether this fund should be subject to punitive measures, since it is built on an activity that is generally acknowledged to be destroying the planet. It's not right that a group of people should be able to insulate themselves from the carnage they have wrought.
Norweigan oil fund
191–200 of 339 posts
Re: Norweigan oil fund
#192Earlier quoted context omitted.
Perhaps this is why they can afford many government programs that the US simply cannot. Without a prolific income stream comparable to Norwegian oil, the only way to provide more social services is to tax individuals and businesses harder. Tax any group too heavily and you create brain drain, which hurts in the long run.
The best comparison is Sweden, which is right next door, culturally and linguistically similar, but does not have oil like Norway does.
But is does have more and more easily used land. And while it looks very similar from outside Scandinavia it doesn't look quite so similar close up. Culturally similar but far from the same.
Topographically they are quite different, timber is more profitable in Sweden for instance because the country is much flatter and transport is much easier.
The two countries have different challenges to overcome and different histories that still affect the way people think.
Re: Norweigan oil fund
#193I did some quick math and with their current annual return rate of 5.8%, the returns from the the Oil Fund could finance the government's budget entirely once it gets to be about $2T in size. That's about 2x its current size. That's still about 20 years away at their current growth rate, and the government budget would probably increase by then, but it's still probably achievable. What happens then? Norway could theo…
Unfortunately (as a Norwegian), that is never going to happen. Norway's is a success story, but there is a darker side to the oil fund. This money will be spent on something. Our public sector has a tendency to grow without questioning from any political group, such that the total tax level stays the same, regardless of any incomes from the oil fund.
Currently, 1/3 of working-age Norwegians work in the public sector. 1/3 works in the private sector, and the final third are either unemployed or qualify for government benefits. (Meaning: Retired, long-term disabled, in full-time parental leave and so on). That this seems sustainable at all is very strange. We might as well go straight to a large-scale basic income experiment, because we almost have a basic income system in place already. In my opinion, this would be a more honest way of providing government benefits than the system we already have.
Currently, 3-4% of the oil fund is liquidated each year to pay for the deficit in the national budget, while total taxation has in fact _increased_ under the current Right government.
To my eyes, Norway has an exotic form of Dutch Disease in the form of our government spending, which is prevented from becoming a catastrophe by the oil fund. It will be interesting to see what the future brings, but it's not all roses.
Re: Norweigan oil fund
#194Earlier quoted context omitted.
I can't stand this ideological sports-team type of commentary, so just to add some real information and context (after my downvote): Venezuela produces ~70k barrels per person per day. Norway produces a little more than half as much total oil, but with one-sixth the population it works out to ~330k barrels per person per day. An order of magnitude per-capita difference.
That's not an order of a magnitude. Even then, so, Venezuela produces 1/5th per capita the oil of Norway. Why doesn't there exist a fund with $37k/person in Venezuela?
Norway had a per-capita GDP 10x that of Venezuela when they launched their fund. The option was a luxury that they were granted by already being a fairly wealthy country.
Also, consider if 25% of Norway's oil revenue is sufficient to provide a basic functioning government. Now you have Norway saving 75% of their oil revenue every year, and Venezuela still sucking 5% out of other funds, resulting in a long-term extremely wealthy Norway and a destitute Venezuela.
Re: Norweigan oil fund
#195Re: Norweigan oil fund
#196Earlier quoted context omitted.
Of course it was avoidable. Just should have kept capitalism.
How does capitalism decide who gets extraction rights for natural resources?
The discoverer? And then whoever wants to buy the extraction rights from her at the market price? What’s even the problem?
Re: Norweigan oil fund
#197Earlier quoted context omitted.
Farouk al-Kasim is the Iraqi who is said to have played a big role in this outcome. I believe his story has been on HN before: https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...
And I think Brazil is trying to replicate the model
No, this is what Brazil should've done decades ago but could not due to corruption and short-sightedness. Nowadays, the only model that they are trying to replicate is that of authoritarian regimes.
Re: Norweigan oil fund
#198Earlier quoted context omitted.
yeah also take a look at how many immigrants and refugees they let into their country. the number is probably very close to 0.
https://en.wikipedia.org/wiki/Immigration_to_Norway > In 2017, Norway's immigrant population consisted of 883,751 people, making up 16.8% of the country's total population. This includes both foreign-born and Norwegian-born with two foreign-born parents, and four foreign-born grandparents. In this population, 724,987 are foreign-born immigrants, while 158,764 are Norwegian-born with foreign-born parents. The ten most…
so more like 130k real refugees 2% of total populationthat have been handpicked and all paperwork in order or now compare rhat to UK, France or USA where the number is close to 10% where 1/3 of them are illegal, don't speak the language and don't pay any taxes.
Re: Norweigan oil fund
#199Yes those social Norwegian's invested; and the UK gave there north sea oil revenues to all the oligarchs
Of course the UK has a far larger population, so it would be worth far less per capita. It's sobering to remember that Norway started this fund only in 1990. The UK mooted but cabinet ultimately rejected a North Sea Oil fund on similar lines in 1975. It was suggested by Tony Benn while he was Energy Minister. All that did materialise was the British National Oil Corporation (later Britoil having been privatised by Th…
The UK was more or less on it's knees in 1975, I think that without North Sea Oil there would be very little chance that it could have build the services economy and infrastructure it did in the 80's and 90's. I think that you also give our politicians too much credit in terms of managing a fund; remember that the UK was the biggest recipient of marshall aid after the war, and it spent it on patrolling an empire that it was clearly about to lose and subsequently lost. I think that politicians of both parties would have been very likely to raid any fund and use it for vanity projects.
Re: Norweigan oil fund
#200A lot of comments in this thread seem fixated on the fact that this originated from oil profits, but to me it feels like more of a consequence of the Norwegian government's partial public ownership of its domestic energy companies and other industries. Lots of countries have a surplus of at least one natural resource; few of them have central governments with the authority (and lack of corruption) to publicly own those resources. Most governments just can't keep their hands out of the cookie jar.
Every time I hear someone talk about socialism, whether its pundits or politicians or columnists, they talk about welfare. Everyone seems to have forgotten that that public ownership of capital is by definition the more important part of socialist policy that makes welfare possible. Norway is probably the best example of this idea's power. I'm not saying socialism is without weaknesses, but I don't understand how anyone can look at Norway and think that it doesn't work or is somehow evil.