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MONDAY, NOVEMBER 23, 2009
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9

Against Economic Tide, Norway Thrives

Often standing in contrast to Europe, strict state control puts Norway in good stead

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(Newser) – While the rest of the world struggles with recession, Norway’s socialist-leaning government looks pretty smart, the New York Times reports. Norway enjoys a budget surplus of 11% and is free of debt (the US owes $11 trillion), and its economy grew 3% last year. Oil revenues are pouring in—$68 billion last year—and its sovereign wealth fund is among the world’s largest.

Tight control over lending kept banks there healthy—and housing prices are rising because there was no bubble. While it’s easy to attribute Norway’s success to its status as the world’s third-largest oil exporter, legislation mandating oil revenue be deposited into the sovereign wealth fund to highlights forward-looking values. “We cannot spend this money now,” one economist said. “It would be stealing from future generations.”

A Norwegian oil rig.
A Norwegian oil rig.   (AP Photo)
Workers make final preparations to pipes as they enter the sea from the vessel Acergy Piper, Sept. 21, 2006, in Bergen, Norway.
Workers make final preparations to pipes as they enter the sea from the vessel Acergy Piper, Sept. 21, 2006, in Bergen, Norway.   (Getty Images)
Many Norwegians have a boat and a second home.
Many Norwegians have a boat and a second home.   (Flickr)
Oslo at dusk.
Oslo at dusk.   (Flickr)
Norway, the world's third-largest oil exporter, didn't overspend in the good times and enjoys economic growth as the rest of the world is in recession.
Norway, the world's third-largest oil exporter, didn't overspend in the good times and enjoys economic growth as the rest of the world is in recession.   (Flickr)
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The US and the UK have no sense of guilt. But in Norway, there is instead a sense of virtue. If you are given a lot, you have a responsibility.
- Anders Aslund, an expert on Scandinavia at the Peterson Institute for International Economics

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9 comments
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Yourself
May 14, 09 10:54 AM CDT
god forbid a little bit of Bank regulation. that's the exact same thing as in Canada, the bank regulations is what kept it from being hit so hard during the economic downturn. http://www.newsweek.com/id/183670 Reply
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+2
Reader74862963
May 14, 09 11:03 AM CDT
This is why the NY Times is going out of business. Tell both sides of the story. "Well true that tighter regulations and higher government intervention help hold up the economy during a recession, they hold economic growth back during recoverys and expansions." Reply
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IN RESPONSE:
Snowleopard
May 14, 09 12:45 PM CDT
I'd gladly give up a few percentage points of growth in the good times so as to lessen the economic destruction that happens during recessions. The boom bust cycle wrecks havoc society. What's so bad about slow, sustained growth?
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+2
Fondue
May 14, 09 11:05 AM CDT
It is amazing the difference between having morals and actually sticking to them can do. Reply
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+1
kokuaguy
May 14, 09 11:27 AM CDT
A society that believes it has a responsibility for future generations... hard to believe! Reply
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+6

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