Future Perfect

[

] 160

ustainability

olicies

, P

rogrammes

and

their

conomic

mpact

On the basis of this experience, we have developed a

framework for the use of oil revenues that facilitates stable

economic development and ensures that future genera-

tions also benefit from the revenues. This is part of the

generation contract. The framework rests on two pillars:

• The oil revenue is invested abroad in the

Government Pension Fund Global

• The fiscal rule, which ensures that we phase oil

revenues into the Norwegian economy gradually

and in a predictable manner at a level that can be

maintained over time.

Both the fiscal rule and the savings put aside in the

Government Pension Fund Global contribute to stable

economic development in Norway. By phasing in oil

revenues gradually and investing what we do not use

outside Norway, we are also helping to prevent the

crowding out of industries competing on the world

market. The Fund is a long-term investor. A good

return in the long term is regarded as being dependent

upon sustainable development in economic, environ-

mental and social terms. The Fund has guidelines for

The strategy has several priority areas. International cooperation

to promote sustainable development and combat poverty is one

of the main areas. In the area of the natural environment, climate

change and long-range air pollution, together with biodiversity,

hazardous chemicals and cultural heritage, stand out as the most

important challenges. Taking into account sami perspectives on

environmental and natural resource management covers the

indigenous population. Sound management of natural resources

and sustainable economic and social development have a promi-

nent place in the strategy.

The strategy should be followed up not only by national authori-

ties, but also local authorities, the business sector, organizations,

research communities and individual citizens. So this is not a strat-

egy for the Government alone, it also describes how other groups

can contribute to sustainable development.

We use a set of 17 indicators to assess if we are moving in a

sustainable direction. These indicators are also used by the various

Ministries in their reports to the Ministry of Finance. Statistics

Norway plays an important role in analysing and reporting on

annual developments of these indicators.

Sustainable development cannot be achieved in one country

alone, independent of the rest of the world. Poverty allevia-

tion, pandemic preparedness and trade are only a few examples

demonstrating why international cooperation is required to

ensure sustainable development. That is why Norway is a major

supporter of the United Nations and has delivered on official

development assistance commitments for several years, providing

more than one per cent of GNP.

Norway has not always been a rich country. The sharp rise in

prosperity since the 1970s is often attributed to the discovery of

oil in the North Sea and the oil revenues that began to flow into

Norway’s coffers. However, this is only one of several factors.

The revenues from oil extraction made it possible to import

more goods without increasing employment in mainland indus-

tries that are exposed to international competition. At the same

time, we saw a marked increase in jobs in sectors that were not

exposed to international competition. The increase in these

sectors kept pace with the increase in female participation in the

labour force. Between the years 1972-2005, the participation of

women aged 25-54 in the workforce increased from about 50 per

cent to more than 80 per cent. Rough estimates indicate that GDP

would have been 15 per cent lower if the percentage of women in

the workforce had remained at the level it was at the beginning

of the 1970s.

Women’s entry into the workplace has been a significant

factor for economic growth, which helped to build up a strong

welfare state and made it easier to phase the oil revenues into the

Norwegian economy. A comprehensive welfare system requires

a high level of employment to fund the broad range of welfare

services offered.

Norway has considerable non-renewable resources in the form of

offshore oil and gas reserves that will not last forever, and we will

need a strong mainland economy with a sufficiently large sector

exposed to international competition.

When Norway discovered oil in the 1960s, it was already a well-

developed democracy with sound institutions we could build on.

The new petroleum industry brought both opportunities and chal-

lenges which saw Norway go through a period of trial and error

during the 1970s and 1980s.

Image: Kai Jensen/Scanpix