Norway Oil Expedition

Norway is the fifth largest crude oil exporter in the world, and the largest in all of europe with its large amount of petroleum. It has managed to create a vast social welfare system over the years, being almost iconic in its independant success. For many years now, there has been no question of this, but as resources deterorite, Norway is in a position where it must seek new opportunities to expand.

The resources of the North Sea are Norway's primary source of crude oil reserves, but with new politics come new endeavors. With the election of Prime Minister Stoltenberg in september of 2009, Economic policies have called for the expansion into arctic seas for new petroleum and other crude oil reserves.

Since most of Norways funds are kept in a Sovereign WEalth Fund reaching almost $400 billion, the state has ensured itself the cost of exploration for new oil reserves, as well as the potential for economic decline due to immigration and taxes, as those are also major issues with Norway's economy.

In an earlier post, I mentioned that the Norwegian form of currency is the Krone. This is so because of their independance from the European Union. Above is a depiction of the exchange rate for the last 5 years from the dollar to the krone. Clearly you can see it has risen quite a lot since 1996, which at that time it was already at 6.4 krone per 1 U.S. dollar. Norway's independant and insular mindset has contributed to its prosperity and economic stability since the early 1990's.

I mention the early 90's because, Norway had a huge financial crisis with it's banks, dating to around 1984, when lending limits and interest rates dropped to staggering levels, leaving nothing but debt in their wake. This problem has been somewhat alleviated due tomacroeconomic policies being instated to compensate for rising inflation rates.

Norwegian interest rates are currently higher on the krone than EU interest rates on the euro. The norwegian currencies appreciation against the euro is largely due to the above factors, as well as government finances and external trade balance.

Norway's Growing Population.

Norway is a Scandinavian country, dominated primarily with Germans. It has roots spreading back over 10,000 years ago, with the Sami people who inhabit the northern areas in some instances. Due to the level of government Norway has, and it's prosperous economy, it is started to feel an increase in population, primarily in immigrants.

Immigrants include, but are not limited to: Foreign workers, people from other cultures seeking new opportunities, and illegal immigrants. As of 2010, there are over 300,000 immigrants in Norway, some of which have obtained Norwegian citizenship's in there time spent in the country.

As far as Norway's public service system is concerned, they are very similar to the United States. They mandate public education from ages 6 to 16, and all education is free until the university level. They also have free religious belief, as well as having a public pension system for free health care, making it clear that Norway looks out for it's people above all else. This is why they have a loyal population and prosper through hard times.

Tourism in Norway

As of 2008, Norway ranks 17th in the World Economic Forum's Travel and Tourism Competitiveness Report.

This somewhat prestigious ranking is due mainly not to man made tourist attractions, but to the beautiful landscapes and mountain ranges spanning the country. Norway is known for it's clean, crisp looking surroundings; they strive to keep their environment clean and pollution free. Although, it goes without saying that nature alone doesn't bring in all of Norway's tourism. The lush ski resorts and campsites in the woods are popular destinations for the adventurous tourist. They are located amongst the coastal fjords and arctic mountain ranges providing a scenery unparalleled by many tourist locations.

Another interesting fact is that, connecting the giant waterfalls and mountain ranges is a ferry system that offers a unique way of travel from one part ofNorway to another, aside from the typical car or bus transit. These idiosyncrasies in places like Oslo and Bryggen, offer a different type of experience that many countries just can't.

Sources: http://en.wikipedia.org/wiki/Tourism_in_Norway

EU Reluctancy

Norway's economic success and stability is greatly attributed to it's independence. Above is a chart showing the export and import percentages of GDP for Norway. This is without the aid of the EU, as Norway opted to stay out of the EU in an attempt to provide independence to their economy & society. This decision proved to be ultimately effective as Norway's economy to date has been very prosperous. The reluctance to join the EU is simply because countries that are a part of the EU tend to flourish if they are wealthy. Norway for example would not benefit because the EU is a system in where everyone contributes money and resources. The wealthier nations contribute to balance the less wealthy nations, helping everyone gain stability. Because of this reason, Norway is succeeding on it's own.

Norway is a NATO country, with a lot of oil reserves generating a high profit for the nation which only has 4 million inhabitants and highest living standards in the world. It is protected by NATO because of its strategic importance of its oil resources. It also has access to the European market through the EFTA (European Free Trade Association). With all those factors in mind there is nothing for it to gain by joining the EU but only something to loose. This is common between many nations that are not in the EU.

Basically, Norway is self-sufficient, and has paved the way for it's independant success without the need for much outside help.

Norwegian Labor Market

As previously stated, Norway's current struggle is with it's unemployment rate. Though this issue appears to be leveling out, it is expected to be a recurrent issue until 2012, although this is purely speculative. In 2009 the unemployment rate was at 3.3% to the now 3.9% in 2010. These numbers indicate that Norway's unemployment rates are definitely an issue, and are not going away without some type of reform.

GDP however has been rising in a more positive direction as of 2010. Norwegian economists estimate a rise in GDP of around 1.4% by the end of 2010, and 2.5% by the year 2011. This portrays an optimistic future for the Norwegian people, and something to aspire to uphold.

The government has set up a public committee to examine the regulatory framework regulating the Norwegian financial market in light of the financial crisis. This is a positive step towards reforming the labor issues and gives the people of Norway reassurance that actions are being taken. It seems to me that Norway's government really cares about it's people and the overall benefit of it's economy.

http://www.eurofound.europa.eu/eiro/2009/09/articles/no0909039i.htm

Rich In Resources

There is no denying that Norway has one of the world's most prosperous economies. Many factors contribute to this, including it's capitalistic economic values which encompass a balance of free market and government interference. The government controls the key areas such as the petroleum sector through large-scale enterprises.

The main reason Norway has endured such hard times and came out unscathed is largely due to it's superfluous and eclectic variety of natural resources. Some of the more common are: petroleum, hydropower, fish, forests, and minerals, but the main area of focus is the petroleum sector, which accounts for over 30% of the state's revenue.

Though Norway elected to stay out of the EU in around 1994, it is still a shareholder in europe's economy, and an economy juggernaut to say the least. Norway is still going strong in 2010, and I believe it will continue to do so due to their fair economic policies and the lucrative petroleum industry they control.

http://www.eubusiness.com/europe/norway/econ

Resillience in Recession

The recession as of late has not only hit The U.S., but it has been affecting all of it's subsidiaries as well. Norway is one example though, of a country who perservered through the recession, a success which has not been acheived by many countries in these trying times.

When the economy was hit, it was responded to with strong monetary and fiscal policies that are common amongst norways strong form of government. It has been known to be one of the most economically successful countries in many years, ranked higher than the U.S. and many others in terms of economic stability.

The only aspect Norway is even comparable to other countries in, in terms of negativity, is their unemployment rate. Though it is fairly low at this time, it is not as bad as most other countries, but more importantly is improving everyday. It is estimated that the rate of unemployment will reach 3.5% by the year 2012.

Norway's economy is constantly growing and expanding, and with the central bank increasing it's key policey rates, it is only looking good for the future.

http://www.fnh.no/en/main/publications/the-economic-situation-in-norway/

A Basic Overview

Norway is a scandinavian country in southern Europe that consists mostly of Germans, although the number of immigrants present in the country is steadily growing each year.

Interestingly enough, Norway is one of the richest countries per capita in the world. It excels in the production of metals, paper, chemicals, shipbuilding, and fishing, although there are other areas of trade. Norway's shipping fleet is revered as being the most substantial among the maritime nations as well as providing excellent import and export opportunities for the country.

In case this wasn't enough fortune for one country, the insurgance of oil around the 1970's added leverage to norway's already substantial list of economic successions. This also allowed Norway to expand their social welfare system, which pleased both consumers and producers in the economy. Norway is not a member of the EU's Economic and Monetary Union and does not have a fixed exchange rate to date, it is a free country, who trades majorily with Europe.

Source: http://www.factsmonk.com/facts_on_norway