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Economy of Norway PDF Print E-mail
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Monday, 30 May 2011 09:10

NorwayNorwegians enjoy the second highest GDP per-capita (after Luxembourg) and fourth highest GDP (PPP) per-capita in the world. Today, Norway ranks as the second wealthiest country in the world in monetary value, with the largest capital reserve per capita of any nation. According to the CIA World Factbook, Norway is a net external creditor of debt. Norway maintained first place in the world in the UNDP Human Development Index (HDI) for six consecutive years (2001–2006), and then reclaimed this position in 2009 and 2010.

Cost of living is about 30% higher in Norway than in the United States and 50% higher than the United Kingdom. The standard of living in Norway is among the highest in the world. Foreign Policy Magazine ranks Norway last in its Failed States Index for 2009, judging Norway to be the world's most well-functioning and stable country. Continued oil and gas exports coupled with a healthy economy and substantial accumulated wealth lead to a conclusion that Norway will remain among the richest countries in the world in the foreseeable future.

The Norwegian economy is an example of a mixed economy, a prosperous capitalist welfare state featuring a combination of free market activity and large state ownership in certain key sectors. The Norwegian welfare state makes public health care free (above a certain level), and parents have 46 weeks paid parental leave. The income that the state receives from natural resources includes a significant contribution from petroleum production and the substantial and carefully managed income related to this sector. Norway has a very low unemployment rate, currently 3.1%. 30% of the labour force are employed by the government, the highest in the OECD. 22% are on welfare and 13% are too disabled to work, the highest proportions in the world. The hourly productivity levels, as well as average hourly wages in Norway are among the highest in the world.citation needed The egalitarian values of the Norwegian society ensure that the wage difference between the lowest paid worker and the CEO of most companies is much smaller than in comparable western economies.citation needed This is also evident in Norway's low Gini coefficient. The state has large ownership positions in key industrial sectors, such as the strategic petroleum sector (Statoil and Aker Solutions), hydroelectric energy production (Statkraft), aluminium production (Norsk Hydro), the largest Norwegian bank (DnB NOR), and telecommunication provider (Telenor). Through these big companies, the government controls approximately 30% of the stock values at the Oslo Stock Exchange. When non-listed companies are included, the state has even higher share in ownership (mainly from direct oil license ownership). Norway is a major shipping nation and has the world's 6th largest merchant fleet, with 1,412 Norwegian-owned merchant vessels.

The country is richly endowed with natural resources including petroleum, hydropower, fish, forests, and minerals.Export revenues from oil and gas have risen to 45% of total exports and constitute more than 20% of the GDP. Norway is the fifth largest oil exporter and third largest gas exporter in the world, but it is not a member of OPEC.

By January 2006, the Government Pension Fund of Norway controlled assets valued at US$200 billion. During the first half of 2007, the pension fund became the largest fund in Europe, with assets of about US$300 billion (equivalent to over US$62,000 per capita).

 

Last Updated on Tuesday, 31 May 2011 10:05