The Great Norwegian State Pension Mystery

I’m fan of ScandiNoir detective fiction. But there’s one Scandanavain mystery that been puzzling me for a while:

How come

  • Norway has approximately the same population as Scotland
  • Has a similar retirement age
  • Has extracted much the same amount of oil & gas from their sector of the North Sea as  has been extracted from our North Sea sector.
  • Has a less diverse economy than ours – we’ve got a thriving financial sector, IT sector,   food & drink sector, satellite design and construction sector… we’re even going to have a space port!

Yet

  • their gross domestic product is twice ours
  • their state pension is twice ours
  • they have a sovereign wealth fund
  • we don’t have a sovereign wealth fund and neither does the UK

Answers on a postcard please!
My opinion? 

Firstly I think that it is connected to the way they have managed their oil & gas reserves since the early 1970s when the North Sea came online. I’ve written about this in  previous blog posts : Please, Norway, Help Us Look After Our Oil  and Still Game After All These Years and these posts have the source references to the info given below. For example this is the Norwegian approach to stewardship of their natural resources:

“The overall objective of Norway’s petroleum policy has always been to provide a framework for the profitable production of oil and gas in the long term.
It has also been considered important to ensure that as large as possible a share of the value creation accrues to the state, so that it can benefit society as a whole. This is partly obtained by the tax system.”
(Norsk Petroleum)

 

Having educated myself about that,  I’m now more focused on the consequences of the prudent Norwegian approach. And I think the amount of their state pension compared to ours is one of them.  

 

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