(Apologies. I have no idea what happened to the formatting.)
I've just been reading a post at WOS which points out the difference in the economic situations between Scotland and Norway.
As Stuart points out, Norway has a slightly smaller population, a more northerly aspect, a more challenging climate and topography, but it discovered oil in approximately the same quantities as we did, at the same time. Now, 40 years or so later, it has an embarrassment of wealth, while our standard of living is dropping like a stone.
|They are independent but the sun still shines|
The Norwegian Ministry of Finance forecasts that the global (petroleum) fund will reach NOK 4.3 trillion or £458,616,144,000 by the end of 2014 and NOK 6 trillion (£639,632,000,000) by the end of 2019. In a parliamentary white paper in April 2011 the Norwegian Ministry of Finance forecast that the 2030 value of the fund would be NOK 7.4 trillion (£831,521,600,000). Eight hundred and thirty one and a half billion pounds.
As I understand it, the Scottish or British fund stands at £0.0.
Additionally, the Government Pension Fund in Norway manages the state social security money, a fund to pay pensions and benefits. This fund is managed by a separate board and separate government entity from the petroleum fund. The Government Pension Fund – Norway had a value of NOK 106.9 billion at the end of 2006 (the latest figures I can find). That is for a population of 4.7 million £11,161,058,000).
As I understand it, the equivalent fund in the UK (population 62 million) stands at £0. Pensions and social security are paid from current taxation, which of course is why they have to be pruned back at the moment. In fact as the poor earn less and pay less tax and the rich find ways to avoid tax, it appears our social security fund is being financed by borrowing.
Now I'm not suggesting that everything in Norway is perfection, but just glancing at another set of figures I note that the absolute poverty rate in Norway is quoted at 1.7% of the population, where in the UK it is quoted as 8.7%.
Because they had sensible government which took the vast wealth that oil gave to them, and invested it in bringing the country's infrastructure up to date and then investing the surplus in funds spread over the world against the day that the oil runs out or the price drops or someone discovers new ways to fuel civilization.
The unpredictability of a natural resource like oil is a favourite of the British government and the No Chance Campaign when belittling the Scottish economy, but strangely we have seen little in the way of preparedness from Westminster over the years. When the oil runs out, or ceases to have value, Britain will, alone in the oil producing nations of the world, nothing.