Foredrag for 50 besøkende fra USA (Boston) om den Nordiske modellen.

1. Why Norway is winning in a global marketplace?
Chief Economist, Terje Strøm, NyAnalyse
15th of May 2013

2. The next supermodel?

3. Kingdom of Norway
Facts and figures

4. Norway’s black gold
 Small, transparent, open
economy
 Free healthcare & higher
education
 Women working and
birth rates still high
 Trust in political
system and the law.
 Rather happy tax payers?

5. A global winner – rich and lucky

6. The Economist - quotes
 The new Nordic model is
not perfect.
 High trust in institutions
and political system – so
far…
 Norway is the odd man of
the Nordics.
 Norway is embracing
state capitalism!
 Oiling the wheels of
welfare…

7. Norway – the European rich cousin
March 1999
$ 15/Barrel
October 2003
$ 30/Barrel
April 2005
$ 50/Barrel
Des 2006
$ 60/Barrel
March 2011
$ 90/Barrel
Norway: At the right place at the right time:
”on the back of China’s increasing demand for energy”

8. Results
• A larger trade surplus
• Higher growth rate
• Slower employment
growth in the
manufacturing industry
• More demand for reforms
and pressure to innovate
• Higher immigration
Globalization’s impact on Norway
• Cheap import goods
• Lower prices
• Low interest rates
• Pressure on wage growth
• Increasing market prices
on Norwegian export
commodities
• New export markets
The Norwegian
economyChina-
effects1
Increased
domestic
competition
2
10 new
EU countries
3

9. Best ”terms of trade” since 1915

10. Pros and cons with ”the Nordic Model”
Pros
 Highly educated
population
 Good welfare support
systems
 Low unemployment rate
and few conflicts at work.
 Advanced technology in
worklife
 Little corruption
Cons
 Large share of the
population between the
age 16-67 is outside the
labour force.
 Increase in the number of
people with disability
 Higher taxes than other
OECD countries
 The marginal rate of return
on education is low.

11. Government’s economic policy
 The main objective of
the Government’s
economic policy is to
contribute to high
employment, sustainable
development, fair
distribution of income
and well-functioning
welfare schemes.

12. Our ’cowboy’ finance minister:
thank you Poland and Sweden!

13. World’s largest sovereign wealth
fund
386.6
3307.9
6262.3
0
1000
2000
3000
4000
5000
6000
7000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: Ministry of Finance. From the National Budget 2013.

14. The ”rule of thumb”
Using only 4% of the oil or pension fund
 Why this rule of
thumb?
 The oil revenue should
benefit all generations
 Secure our export
industries and keep wage
increases under control.
 Strategy against Progres
party goal of higher
budget deficits?
 Problems ahead?
 Politics and oil prices
 China falls back…
 European crisis worse
 Migration challenges
gets more difficult…
 Sharp fall in property
prices combined with
global downturn

15. Strong population growth,
low uneployment

16. Look to Sweden

17. Top rankings - the Nordic countries

18. State capitalism – pragmatic?
 The state is the largest
owner of private
companies in Norway, and
owns more than 37 per
cent of total stock value at
Oslo Stock Exchange.
 Foreigners own about 25%
of the stocks.

19. NASA cooperation with oil hub
 ”Curiosity” landed on
Mars i august 2012.
 Mars Institute with office
in Stavanger, our oil
capital.
 Knowledge about drilling
under extreme conditions

20. THE WORLDS MOST ADVANCED OFFSHORE FLEET

21. LNG Gas = Snøhvit, Hammerfest

22. Substituting oil with natural gas
 The production of oil had an
upswing in the beginning of the
1970s and until the turn of the
century. Measured in volumes
oil production reached its top in
2000.
 The production of natural gas
have largely compensated for the
shortfall in oil.
0
50,000
100,000
150,000
200,000
250,000
300,000
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Peak oil or better days ahead?
Kondensat
NGL
Gas
Oil
Source: Statistics Norway

23. Challenges ahead...
 The Norwegian economy
is likely to be faced with
difficult trade-offs in the
decades to come, such as
changes in the global
economy, immigration, o
ur high level of cost and
an ageing population.

24. Sayings…
”typisk norsk å være god”
Gro Harlem Brundtland, prime minister, Labour Party.
before the Winter Olympics in Lillehammer 1994.
” Norge er et lite land i verden…”
Lars Korvald, prime minister, Christan Democrats, in 1972.
Before the referandum about joining the European Union in 1972. The
people said No!

25. Norway’s success story…

26. The investment strategy
 The Government Pension Fund has a very long investment horizon. No
clearly defined liabilities. These characteristics give the Fund a greater
ability to absorb risk than many other investors.
 The strategy is to exploit the long investment horizon of the Fund and
profiting from risk premiums over time. The investment strategy is
based in assessments of expected return and risk in the long run and
the assumption that one has to accept a certain degree of risk to
achieve a satisfactory expected return over time.

27. Strategic Asset Allocation
Equity (60%)
America, Africa,
Midlle-east 35%
Europe 50%
Asia and
Oseania 15%
Bonds (35%-40%)
America, Afri
ca, Middle-
east 35%
Europe
60%
Asia og
Oseania
5%
Realestate (0%-5%)

28. Money never sleeps…

30. The new Norwegian government…
Venstre 5% Høyre 30% KRF 5% FRP 15% Nordic Supermodel

31. The Nordic countries
 The Swedes live longer, but are often sick.
 The Danes die ealier, but are happiest in the world.
 The Finns have high unemployment, but the world’s
best school system.
 The Norwegians are the richest, but the children
struggle with maths!
Source: Bertil Holmlund, Uppsala University, Sweden

32. Thank you for your attention!
WEB: nyanalyse.no
Email: terje@nyanalyse.no
Mobile: +47 46441009