It really is amazing that there is a list as long as your arm of economies dominated by natural resource extraction for whom it has been a curse. And then there's Norway. The sole exception.
Canada and Australia seem to be doing fine.
Farouk al Kasim saved Norway from its oil (2014)
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Re: Farouk al Kasim saved Norway from its oil (2014)
#62Disclosure: I'm a Swede who previously worked in various primarily Norwegian-owned software companies for two decades. I'm mostly happy about how it went. I also got some insights about Norway along the way via the 100+ trips to Oslo during that last decade when I had an engineering management role. That travel schedule was exhausting. My pet peeve about Norway and oil: How very few people ever call them out on being…
They should continue to produce it and explore for it until we (the world) don't need it.
The "starve the beast" strategy did not work for the Reagan tax cuts and it will not work for energy.
Re: Farouk al Kasim saved Norway from its oil (2014)
#63Stupid use of funds for the most part, it's not re-invested in the country, just the American stock market. It's not like they had to buy solid gold rolls royces, but there's no reinvestment internally other than oil and fish. Norway is a hedge fund with the F-35.
I suspect that the people arguing here that Norway should direct that huge volume of money internally are not Norwegian residents. Those of us who live in Norway, most of us anyway, recognize that doing that would be a disaster and would just fund short term spending and fuel inflation. The UK and the Dutch just spent the money they got from the North Sea oil and at least the UK has little to show for it. Anyway, the…
There must be some way that a honest government can spend a lot of money improving a country.
The ideas that this decision can not be made in a hurry and that the spending can jump in size too quickly are reasonable. But the ones that there is absolutely nothing better to do with the money, and that most of it will be there in a large crisis when they need to withdraw are both ridiculous.
Re: Farouk al Kasim saved Norway from its oil (2014)
#64Earlier quoted context omitted.
Is the standard of living really much better in the Middle East than what Norway offers? I haven't seen any exposés on modern slavery in Norway like I have on the Middle East fiefdoms, but maybe those canny vikings are just better at hiding it?
I think importantly, the slave-like people in eg Qatar are not Qataris, they're Filipinos, Indians, Bangladeshis, etc. But, one wonders why a very rich society would need to resort to enslaving people in order to save a buck.
Also it’s a fraction of the Indian/Pakistanis etc. that are in a slave like situation. Almost all business owners are also Indian.
Re: Farouk al Kasim saved Norway from its oil (2014)
#65Disclosure: I'm a Swede who previously worked in various primarily Norwegian-owned software companies for two decades. I'm mostly happy about how it went. I also got some insights about Norway along the way via the 100+ trips to Oslo during that last decade when I had an engineering management role. That travel schedule was exhausting. My pet peeve about Norway and oil: How very few people ever call them out on being…
Disclosure, I'm a Norwegian. Saudi Arabia of the north. Well. Actually I think Sweden might be a top contender for that name.
Nah, as an outsider visitor to both countries, Norway is definitely Saudi Arabia. I would have called Sweden the Pakistan or Syria of the North, except there's no comparison to the situation currently there among its peers. Sweden is in the same spot as the native Americans of the Thirteen Colonies.
In my opinion, a lot of people in the comment section don't get that there is a somewhat real concern that the abundance of oil revenue has made Norwegians less ambitious and innovative in comparison to what they could have been with that kind of a world-class education system, in comparison to its neighbours. And the greenwashing of the Norwegian oil industry is actually a real thing too.
Re: Farouk al Kasim saved Norway from its oil (2014)
#66Earlier quoted context omitted.
I suspect that the people arguing here that Norway should direct that huge volume of money internally are not Norwegian residents. Those of us who live in Norway, most of us anyway, recognize that doing that would be a disaster and would just fund short term spending and fuel inflation. The UK and the Dutch just spent the money they got from the North Sea oil and at least the UK has little to show for it. Anyway, the…
There must be some way that a honest government can spend a lot of money improving a country. The ideas that this decision can not be made in a hurry and that the spending can jump in size too quickly are reasonable. But the ones that there is absolutely nothing better to do with the money, and that most of it will be there in a large crisis when they need to withdraw are both ridiculous.
The larger your economy, the more of a financial cushion you should create and the longer your investment horizon needs to become. If you want to have a resilient society anyway. Political pressures though count against it and demagoguery can make it extremely appealing to reap short term benefits at the cost of long term investment in your own society.
It’s why I was really sad to see the Canadian government give up on its Crown corporations. Sure, they got tens of billions of dollars for it. But that wealth took a really long time to acquire in the first place and the market cap of having a complete monopoly can’t have been priced in correctly (otherwise the private market wouldn’t have been all lathered up at the opportunity to take over).
Re: Farouk al Kasim saved Norway from its oil (2014)
#67Earlier quoted context omitted.
Investment within Norway is high enough that putting more in would drive inflation, at which point you might as well be burning the money, so it's a balancing act. And the notion that improving living conditions - Norway is already at or near the top of nearly every quality of life measure - increases fertility is directly the opposite of real life global trends.
It's too exhausting to keep going. It's essentially a religious belief here, for some backwards reason a nation of mortgage holders is fervently obsessed with keeping inflation down and making money by investing in anybody but themselves. If you point out this might not be an optimal medium term strategy, somebody will pull out a list, point at somewhere near the top and say hey, we're doing better than Sweden. It's…
I'm all for investment, but the problem is that there isn't an arbitrary amount of resources to invest in, nor an arbitrary supply of people to do the jobs you want to pay for with that extra money.
As such, if you pour money in you will inherently drive up prices, and inflation is effectively equivalent to applying an extra tax on everyone.
The notion that you can just pour money in and improve everything works at a household level, but is just an incredibly naive view in terms of a national economy.
It's a balancing act.
At the same time Norway, like every other country in the world is heading for a demographic time bomb nobody knows how to prevent, and so holding back money to be able to pay for that without e.g. drastically cutting back pensions and the like matters. Especially given that the "oil fund" is technically a pension fund.
With respect to mortgages, home ownership in Norway is very high in part because buying a house is affordable to the average Norwegian, in part because Norway is one of only a very small number of countries to let you deduct mortgage interest from taxable income.
But make them too cheap for supply of housing to keep up and all you do is drive up the prices and you're back to square one. Another way of saying that: Housing will "never" be cheap, because if house prices drops or interest drops or salaries go up, people buy bigger/better placed houses. We're nowhere near the housing quality where enough people go "oh, my house is big enough / in the most perfect location, I won't bother moving" if they suddenly find they can afford much more.
Re: Farouk al Kasim saved Norway from its oil (2014)
#68Earlier quoted context omitted.
Posten is a mixed bag. Ease of access at places like grocery stores, and general service is great. But delivery can often be weirdly delayed. Sometimes we get notice of bills _after_ they're due. But overall, I prefer it to the US postal service I'm used to, so it doesn't feel like a slam dunk example to me. Spend some of that money on training and paying more GPs, and you'd have my interest...
Maybe I'm just really unlucky, and I didn't really want to get into that guy about wait times at hospitals or whatever, but I find Posten to be just _spectacularly_ and often hilariously terrible.
Fair point, but why would you think that having a workable post service is a matter of money? Maybe they're simply incompetent and/or never bothered to fix it...
Re: Farouk al Kasim saved Norway from its oil (2014)
#69Earlier quoted context omitted.
Here's a bonus: western half of Denmark is on the continental europe synchronous grid and the eastern half is on the Nordic grid.
at least the whole country is nominally ~220 VAC 50 Hz though right? Not like Japan with different frequency standards.
Right,the difference is basically invisible.
I wonder why RG Nordic is not linked up with continental Europe.
Re: Farouk al Kasim saved Norway from its oil (2014)
#70Stupid use of funds for the most part, it's not re-invested in the country, just the American stock market. It's not like they had to buy solid gold rolls royces, but there's no reinvestment internally other than oil and fish. Norway is a hedge fund with the F-35.
Their economy is going fantastically. It's clearly working out for them.