Why Norway is winning in a global marketplace?Chief Economist, Terje Strøm, NyAnalyse15th of May 2013
The next supermodel?
Kingdom of NorwayFacts and figures
Norway’s black gold Small, transparent, openeconomy Free healthcare & highereducation Women working andbirth rates stil...
A global winner – rich and lucky
The Economist - quotes The new Nordic model isnot perfect. High trust in institutionsand political system – sofar… Norw...
Norway – the European rich cousinMarch 1999$ 15/BarrelOctober 2003$ 30/BarrelApril 2005$ 50/BarrelDes 2006$ 60/BarrelMarch...
Results• A larger trade surplus• Higher growth rate• Slower employmentgrowth in themanufacturing industry• More demand for...
Best ”terms of trade” since 1915
Pros and cons with ”the Nordic Model”Pros Highly educatedpopulation Good welfare supportsystems Low unemployment ratean...
Government’s economic policy The main objective ofthe Government’seconomic policy is tocontribute to highemployment, sust...
Our ’cowboy’ finance minister:thank you Poland and Sweden!
World’s largest sovereign wealthfund386.63307.96262.3010002000300040005000600070002001200220032004200520062007200820092010...
The ”rule of thumb”Using only 4% of the oil or pension fund Why this rule ofthumb? The oil revenue shouldbenefit all gen...
Strong population growth,low uneployment
Look to Sweden
Top rankings - the Nordic countries
State capitalism – pragmatic? The state is the largestowner of privatecompanies in Norway, andowns more than 37 percent o...
NASA cooperation with oil hub ”Curiosity” landed onMars i august 2012. Mars Institute with officein Stavanger, our oilca...
THE WORLDS MOST ADVANCED OFFSHORE FLEET
LNG Gas = Snøhvit, Hammerfest
Substituting oil with natural gas The production of oil had anupswing in the beginning of the1970s and until the turn of ...
Challenges ahead... The Norwegian economyis likely to be faced withdifficult trade-offs in thedecades to come, such ascha...
Sayings…”typisk norsk å være god”Gro Harlem Brundtland, prime minister, Labour Party.before the Winter Olympics in Lilleha...
Norway’s success story…
The investment strategy The Government Pension Fund has a very long investment horizon. Noclearly defined liabilities. Th...
Strategic Asset AllocationEquity (60%)America, Africa,Midlle-east 35%Europe 50%Asia andOseania 15%Bonds (35%-40%)America, ...
Money never sleeps…
The new Norwegian government…Venstre 5% Høyre 30% KRF 5% FRP 15% Nordic Supermodel
The Nordic countries The Swedes live longer, but are often sick. The Danes die ealier, but are happiest in the world. T...
Thank you for your attention!WEB: nyanalyse.noEmail: terje@nyanalyse.noMobile: +47 46441009
Boston visit  - the nordic supermodel - 15may Terje Strøm NyAnalyse
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Boston visit - the nordic supermodel - 15may Terje Strøm NyAnalyse

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

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Boston visit - the nordic supermodel - 15may Terje Strøm NyAnalyse

  1. 1. Why Norway is winning in a global marketplace?Chief Economist, Terje Strøm, NyAnalyse15th of May 2013
  2. 2. The next supermodel?
  3. 3. Kingdom of NorwayFacts and figures
  4. 4. Norway’s black gold Small, transparent, openeconomy Free healthcare & highereducation Women working andbirth rates still high Trust in politicalsystem and the law. Rather happy tax payers?
  5. 5. A global winner – rich and lucky
  6. 6. The Economist - quotes The new Nordic model isnot perfect. High trust in institutionsand political system – sofar… Norway is the odd man ofthe Nordics. Norway is embracingstate capitalism! Oiling the wheels ofwelfare…
  7. 7. Norway – the European rich cousinMarch 1999$ 15/BarrelOctober 2003$ 30/BarrelApril 2005$ 50/BarrelDes 2006$ 60/BarrelMarch 2011$ 90/BarrelNorway: At the right place at the right time:”on the back of China’s increasing demand for energy”
  8. 8. Results• A larger trade surplus• Higher growth rate• Slower employmentgrowth in themanufacturing industry• More demand for reformsand pressure to innovate• Higher immigrationGlobalization’s impact on Norway• Cheap import goods• Lower prices• Low interest rates• Pressure on wage growth• Increasing market priceson Norwegian exportcommodities• New export marketsThe NorwegianeconomyChina-effects1Increaseddomesticcompetition210 newEU countries3
  9. 9. Best ”terms of trade” since 1915
  10. 10. Pros and cons with ”the Nordic Model”Pros Highly educatedpopulation Good welfare supportsystems Low unemployment rateand few conflicts at work. Advanced technology inworklife Little corruptionCons Large share of thepopulation between theage 16-67 is outside thelabour force. Increase in the number ofpeople with disability Higher taxes than otherOECD countries The marginal rate of returnon education is low.
  11. 11. Government’s economic policy The main objective ofthe Government’seconomic policy is tocontribute to highemployment, sustainabledevelopment, fairdistribution of incomeand well-functioningwelfare schemes.
  12. 12. Our ’cowboy’ finance minister:thank you Poland and Sweden!
  13. 13. World’s largest sovereign wealthfund386.63307.96262.30100020003000400050006000700020012002200320042005200620072008200920102011201220132014201520162017201820192020Source: Ministry of Finance. From the National Budget 2013.
  14. 14. The ”rule of thumb”Using only 4% of the oil or pension fund Why this rule ofthumb? The oil revenue shouldbenefit all generations Secure our exportindustries and keep wageincreases under control. Strategy against Progresparty goal of higherbudget deficits? Problems ahead? Politics and oil prices China falls back… European crisis worse Migration challengesgets more difficult… Sharp fall in propertyprices combined withglobal downturn
  15. 15. Strong population growth,low uneployment
  16. 16. Look to Sweden
  17. 17. Top rankings - the Nordic countries
  18. 18. State capitalism – pragmatic? The state is the largestowner of privatecompanies in Norway, andowns more than 37 percent of total stock value atOslo Stock Exchange. Foreigners own about 25%of the stocks.
  19. 19. NASA cooperation with oil hub ”Curiosity” landed onMars i august 2012. Mars Institute with officein Stavanger, our oilcapital. Knowledge about drillingunder extreme conditions
  20. 20. THE WORLDS MOST ADVANCED OFFSHORE FLEET
  21. 21. LNG Gas = Snøhvit, Hammerfest
  22. 22. Substituting oil with natural gas The production of oil had anupswing in the beginning of the1970s and until the turn of thecentury. Measured in volumesoil production reached its top in2000. The production of natural gashave largely compensated for theshortfall in oil.050,000100,000150,000200,000250,000300,000197119731975197719791981198319851987198919911993199519971999200120032005200720092011Peak oil or better days ahead?KondensatNGLGasOilSource: Statistics Norway
  23. 23. Challenges ahead... The Norwegian economyis likely to be faced withdifficult trade-offs in thedecades to come, such aschanges in the globaleconomy, immigration, our high level of cost andan ageing population.
  24. 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. Thepeople said No!
  25. 25. Norway’s success story…
  26. 26. The investment strategy The Government Pension Fund has a very long investment horizon. Noclearly defined liabilities. These characteristics give the Fund a greaterability to absorb risk than many other investors. The strategy is to exploit the long investment horizon of the Fund andprofiting from risk premiums over time. The investment strategy isbased in assessments of expected return and risk in the long run andthe assumption that one has to accept a certain degree of risk toachieve a satisfactory expected return over time.
  27. 27. Strategic Asset AllocationEquity (60%)America, Africa,Midlle-east 35%Europe 50%Asia andOseania 15%Bonds (35%-40%)America, Africa, Middle-east 35%Europe60%Asia ogOseania5%Realestate (0%-5%)
  28. 28. Money never sleeps…
  29. 29. The new Norwegian government…Venstre 5% Høyre 30% KRF 5% FRP 15% Nordic Supermodel
  30. 30. 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’sbest school system. The Norwegians are the richest, but the childrenstruggle with maths!Source: Bertil Holmlund, Uppsala University, Sweden
  31. 31. Thank you for your attention!WEB: nyanalyse.noEmail: terje@nyanalyse.noMobile: +47 46441009

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