Oil is a curse as well as a blessing – just ask a lot of Africans who see their wealth fuel violent dictatorships, but closer to home society in Norway is increasingly divided about how the manna from the North sea should be used.
For a decade arguments about its management have resulted in changes of government. Yet over the same period Norwegians have really started to benefit from a cash bonanza. The first discoveries were in 1969, but exploiting the fields needed borrowed foreign capital. That has now been paid off. By 1990 and with forecasts of dwindling reserves, Norway created a sovereign wealth fund, with revenues set aside for hard times beginning in 1996. The country would prudently prepare for a future without oil. By June of this year that fund had reached a lip-smacking 300 billion euros, but the state is only allowed to cream off 4 percent any year, deemed “normal”, to plug budget gaps or fund special projects. The outgoing Norwegian government upped this figure to 7 percent this year because of the global economic crisis, but the 4 percent rule is being contested by the rightwing opposition Progress party’s leader Siv Jensen: “In this election runup I have heard a lot about Norway being a poor country. But we have an enormous surplus every year. We have to discuss how to manage that money on behalf of the population because they are the rightful owners of it.” That would be senselessly wasteful maintains the Labour leader, Jens Stoltenberg: “You are talking as if you were planning to use all these oil revenues to polish up the Norwegian welfare state. No, you are talking about 50 to 60 billion krona which you plan to use to lower taxes, not build new hospitals or roads.” Unemployment is stable at 3%, Europe’s lowest, and the country has had the briefest of recessions, yet waiting lists for medical treatment are long, and it is hard to find places in retirement homes. The road network is crumbling and inadapted to the 21st century. This is what irritates the average Norwegian, especially as, like some jealous dragon, it seems that the government is content to sit on a pile of treasure.