All Norwegians become crown millionaires, in oil saving landmark
reuters.com
reuters.com
The high cost is largely due to the very steep VAT (unlike the US, but like almost most everywhere else, the prices of goods in the shops include VAT) which is 25%.
the cost of a private university is prohibitive for many if not most families.
in addition, the personal income tax has a high lowest-rate (which i believe is 28%, and a max rate of 50%).
personal accounts for frequent-flier points are taxed; the tax paid on a new car can easily exceed 85% (that's 80 + 5 not 8.5!); gasoline prices are silly--about $13 per gallon (if i did my maths correctly).
i just checked a cost-of-living Site (Numbeo.com) and sure enough, Norway is #1 in Consumer Price Index with 173.85, over 22 points above second place Switzerland.
How does this compare with other countries of similar oil wealth? For instance, Kuwait's oil annual oil exports are about the same as Norway's (though the lifting costs differ significantly).
In Kuwait, education is free, all the way through university and there is no VAT (sales tax).
Exactly. It's really misleading to readers who might be from a country where private higher education is more of the norm to just say that 'most families can not afford private universities', since most people who take higher education go to a public uni/college. And most people don't even want to go to a private university.
An exception might be Handelshøyskolen BI, a college for business administration and the like. But I've never heard of the cost of that being a systemic issue.
If I'm paying that much in taxes and most goods and services are really expensive..how could I afford this? I think this is probably why most people aren't going to a private school..unless you are extremely rich...which I don't think is even possible in Norway with all of the taxes currently in place.
You seem to believe that private schools are always better, but at least in my field, the top public universities are regarded as better than any private school.
If this is the case, I wouldn't really consider it private.
This is quite common elsewhere too. E.g. UK universities.
And even the most expensive private universities are 'only' $10-15k a year, which while certainly a lot of money, is quite cheap compared to the US. Combine this with a relatively high minimum wage and it's quite possible to pay the tuition with a part time job while studying.
And going to a private school for higher education is common only if you want specialised courses (MBA) or for some reason want to study abroad but is by no means economically impossible for most families.
As for cost: Salaries are also so high that a very substantial portion of families could afford to ship their son or daughter off to even a top level private US or UK university (especially given that part of that too can be subsidised by Norwegian government subsidies, and part financed with low cost student loans from the government)
(Edit: this has been even more true the last few years, as the financial crisis has made dollars and pounds dirt cheap from a Norwegian point of view)
Perhaps except for people who have only lived there.
The public universities are free and of good quality. Most of the private universities tend to be more specialized. Some are for students that can't get in to regular studies, and others provide different subjects, such as bachelor degrees in real estate etc.
A degree from a public university is not looked down upon because your employer probably studied at a public university too. The only exception I can think of are those who want an MBA. Many of the MBAs I have met went to a private school ("BI"). Education at "BI" in Oslo costs less than $6000 a year and is not out of reach for most families.
> the personal income tax has a high lowest-rate (which i believe is 28%
The tax pays for public health care, welfare, free education, 49 week paid parental leave (100% of salary) and other benefits. If you compare with another country you need to include this in the cost of living.
> gasoline prices are silly--about $13 per gallon (if i did my maths correctly)
The price of gasoline is closer to $9 per gallon (15kr per litre), but still too high.
None of those things would really benefit someone who only lived there for a year though.
of course, but the needs of the many outweight the needs of the few.
To take the argument further, you could say may actual citizens don't benefit from it, for example if they live healthy, or don't have children, or pay for a private education, etc. Subsidies are rarely fair and create bad incentives.
"Many citizens" and "Subsidies are rarely fair" seems horribly distorted in the context of free education and health care in Norway.
IMNHO you have a rather distorted idea of "fair" if you think that everyone should get the same, rather than that everyone should get what they need (or could benefit from). The two would only ever be the same in some fantasy realm where everyone started out on equal footing.
Maternity leave. Schools. Universities. Health related stuff is also often more subsidized and more expensive for children and pregnant women.
Norway has a negative (1.88) fertility rate which is typical of Northern European cultures, even with these big subsidies. I wonder what it would be unsubsidized.
Despite that, note that the UK has Norway beat in terms of percent of gasoline price that goes to taxes.
Everything else though is much more expensive too, and VAT is only part of the story (compare to UK with VAT at 20%.) Much of the additional price in Norway is down to higher local labour costs, though for food protectionism for farmers also plays a part.
As a software engineer I earned a much lower multiple of the wages of a supermarket employee in Norway than when working in Britain, the US or Germany. As a result there are fewer people working in supermarkets, cleaners use more machinery, some services like dry cleaning are rare outside Oslo as they're uneconomic for most people.
The result of all this is that people seem to feel more secure. The power of employers and employees is more balanced. There is an expectation that there should be time for family life (most professionals work 8-4.)
Most developed countries have reached the point where they don't lack resources, they just fail to share them around equitably.
Cost of living in Norway is high, but we also are among the people that spend the least amount of our pay (percentage wise) on food. Effective minimum wage (there is no minimum wage) is around 200k NOK a year, the prime minister makes approximately 800k -- and a reasonable pay is 400k NOK/year (65k USD) -- this is also close to the median wage[1].
All our best universities and colleges are public (and free) -- and there's a government sponsored student loan/stipend (for living expenses) that while too low (and worse than eg: Denmark) -- are good enough that it is possible to live on it (almost no-one does, as you can't both live on it and go out drinking two days a week...).
When I went to Japan in 1997 (just before the crash) -- cost of living in Japan "felt" similar to in Norway. Better quality food (or cheaper depending on your point of view) -- more expensive housing and utilities. As I was in high-school at the time I don't know how salaries relate, AFAIK if you get a "real" job in Japan you will make a decent living, but many young people are stuck in part-time jobs.
Also worth mentioning is the heavy taxation on cars, the recent change in VAT for food (half of the regular 25%) -- and that we still don't pay VAT on books.
I'm not sure if this comment really adds much, but I (along with a few other responders, I suspect) was really thrown by the insinuation that education is not only not free in Norway, but expensive.
[1] http://www.ssb.no/a/aarbok/tab/tab-190.html (note these numbers are after tax, my numbers (which are from memory-ish, are before tax)
I should note that I was back in Japan in 2002 -- and prices seemed to have almost stood still -- I'm not surprised if Japan today is much cheaper than Norway.
> They did however work 12 hours a day
There is that.
Kuwait also engages in slavery. Life ain't so good for those folks.
In Saudi Arabia, you get paid to attend school.
Compared to the US, maybe to some extent. But Norway is also extremely expensive compared to most other European countries, many of which have VAT in the 20% (UK) or above range (Sweden, Denmark)
The other explanation is salaries: The median salary is extremely high, and the salary curves are very flat. The result is that most people have a very good living standard overall despite the price levels (in fact, recently in a poll, people on average reported to be paid about 100k/year more than they feel they need..), but salary contributes to driving up prices far more than it does most other places as that person at the tills serving you, or picking up litter on the street, actually earns a decent salary.
> in addition, the personal income tax has a high lowest-rate (which i believe is 28%, and a max rate of 50%).
That's quite misleading. This rate applies to taxable income. Taxable income is calculated by taking your gross income, subtracting the minimum deduction (currently ca. NOK 84,000 / $13,600) which is not taxed at all, and any other deductions, which includes all interest on debts including mortgages (which means you effectively get a 28% deduction on interests on your debts). (edit: and a long laundry list of other things)
Also the marginal top tax rate is only applied on amounts above a certain threshold, meaning your tax only starts getting close to the top tax rate if you're earning in the millions and have an inept tax planner.
Saudi Arabia and the Gulf States also have a ton of foreign workers who aren't citizens. Saudi Arabia is second to the US in remittances sent out... http://english.alarabiya.net/en/business/economy/2013/10/27/...
Think about big that has to be - it's more than any of the most developed EU states to the rest of the EU (how many foreign workers are in the UK? Germany? A lot. And they probably pay much better). It's more than comes out of Russia, when half the GDP of some of the ex-Soviet states is Russian remittances.
So while maybe you're entitled to certain things as a citizen, a huge amount of what makes that possible is done by people who aren't.
Oil wealth is notoriously volatile, and it creates all manner of bad habits (for instance, scaling a services economy to match the scale of the oil wealth; the latter is a finite commodity, and the former is extremely hard to scale down once built up).
Norway has been relatively smart in managing its resource boom. It hasn't completely subsidized the cost of living, spent its oil wealth on giant, shiny objects, hoarded the wealth amongst a corrupt and tiny class of elites, or built an enormous social-services machine that won't survive an oil bust or pricing collapse. It's not spending above its means, presumably under the realization that its means came from a geological lottery ticket.
When your country hits the oil jackpot, your job is to convert the oil money to real industry. You don't splurge on mega-hotels, distribute the money frivolously, etc. You need to use it to create the basis for a non-oil-dependent economy.
In many cases, building mega-hotels is preparing for a post-oil future by establishing yourself as a tourism center. Witness Dubai, which basically has run out of oil but sustains its economy nonetheless.
Abu Dhabi, also in the Emirates, has followed the Norwegian model by building up a massive sovereign wealth fund which can replace/stabilize oil revenue indefinitely. Their fund is the second largest in the world, despite having a substantially smaller population (it works out to about $1.4 million per citizen).
Is Abu Dhabi oil owned by the citizens, or by the royal family like in Saudi? Later down the line, that will be quite an important distinction.
Dubai certainly had a lot less oil to start with, which is why it expanded so aggressively. Definitely overshot the mark there, but the issue isn't catastrophic (they do have a strong tourism base).
> Is Abu Dhabi oil owned by the citizens, or by the royal family like in Saudi? Later down the line, that will be quite an important distinction.
It's owned by the national oil company which manages it for the government. Part of the revenue is diverted into expansion, part into the sovereign wealth fund, and a lot into subsidies and benefits for citizens. Generally speaking the UAE is managed much more equitably than Saudi, with the benefits of oil money used to aid all citizens (for example, universal healthcare).
Having said that, I don't quite recall Thatcher being famous for spending oil revenues on expanding the welfare state (and it doesn't sound like something her supporters, then or now, would approve of) so maybe I'm missing something here?
It's the same with your $200k debt per US citizen number. The Norwegian government just happens to have $160k in an investment fund per citizen.
I'm not sure what the overall budget for Norway looks like, but I'd guess it's a bit better than the US budget.
"the structural non-oil budget deficit is estimated at NOK 135.1 billion [...] Net cash flow from petroleum activities is estimated at NOK 314 billion. [...] The consolidated surplus on the Fiscal Budget and the Government Pension Fund, including NOK 147 billion in interest and dividends, is estimated at NOK 328 billion (corresponding to 10.6 of GDP)"
I guess a percent sign is missing there. That would make the surplus 10.6% of GDP.
Not really: in a progressive system, one's share of that debt when net worth is considered is probably more like $20k, thanks to wealth disparity. And again, given equitable spending per citizen (regardless of taxes paid), they really do have about $160k per citizen in that investment fund.
I was just pointing out the absolute division of the numbers for both seem like a similar, if ultimately meaningless, metric.
I won't profess to be an economist and/or understand the intricate differences between the US and NO government taxing/budgeting/accounting, so any enlightenment is welcome.
2013 Norway Govt expenditures: $182 billion, per person: $36,000
2013 US Govt expenditures: $3.93 trillion, per person: $13,000 ($22,000 counting local + state; I have no idea how Norway's government spending looks locally)
and the alternative? Milking polar bears?
To compare, Canada has 1M dairy cows for 35M population, Norway - 300K for 5M population (Norway is self-sufficient milk producer and exporter of dairy products). Giving the health benefits of dairy (incl. in cold climate areas, for children and elderly) i'd say it is good investment, not "unthinkable subsidy".
More on the Canada's (usually one would think of it as a pretty reasonable country) "subsidy-less" approach - http://en.wikipedia.org/wiki/Dairy_farming_in_Canada#Supply_... :
"Dairy farming has been subject to the system of supply management since the 1970s. It restricts the supply of milk by limiting and controlling the amount produced domestically and starkly limiting imports with high tariffs. With a restricted supply, the prices increase, increasing profits for the farmers.[4] Though this system allows the federal and provincial governments to avoid subsidizing the farmers directly, consumers instead subsidize dairy farmers in through artificially high prices paid for groceries.
...
To keep supply low and prices high, it has been made deliberately difficult to become a new dairy farmer in Canada. Because the dairy industry is so lucrative, the right to own a single dairy cow is worth $28,000 (this does not include the actual price or value of the cow itself)
"
Understanding Ricardian/comparative advantage, recognising that dairy is not a matter of national security, and importing it.
A country can do without uranium, it can't do without dairy. As another example of food security being a matter of national security - look what happened to Egypt 2+ years ago once wheat prices rose - for years before that Egypt was geared ("international specialization") toward fruits/strawberries/etc... production for export while becoming world's biggest wheat importer.
I lived through food/gas shortages and high prices at the end of USSR so i think i know how Egypt people felt. Now living in the US i appreciate the US disregard for international free trade agreements when it comes to food and gas - i.e. farmers subsidies and prohibition for oil export - thus making sure that shortages and high-prices of 197x have much less chances of happening again. Free trade is a great idea, yet it works only when implemented by all participants to the same extent and it just doesn't make any sense when implemented unilaterally (or by minor number of participants and/or to different degree).
Don't buy into the free market propaganda too much. The biggest proponents of free market propaganda (I am looking at the EU and the US) have programs that explicitly target food security. Neither would hesitate to introduce export controls to prevent famine-induced revolts.
In Egypt the cost of weat increased toghether with the price of all other grains. And people need grains (but not weat), so they revolted.
Also, what their agriculture changed for is not very relevant, the root of the problem is that their agriculture does not produce enough value for direct consuption or exchange into food (what made their money worth less, and imported food expensive). Growing fruits probably helped reduce the problem.
To be able to give them meaningful advice to do things differently (like, for example, importing), one has to show an example of a country which does things differently (and at least as successful in achieving the goal as Norway).
Apparently the Japanese consume 76.45 kg milk per year per person (as of 2007), while Norwegians consume 261.52 kg. Yet the Japanese have no problem living healthy, long lives.
South Korea gets by merrily with just 26.9 kg, roughly half of Palestine (49.17 kg). (Sure, our country has lots of social/health problems, but "not enough milk" is not one of them.)
"Where the C allele indicated lactase non-persistence and the T allele indicated lactase persistence, the study found that women that were homozygous for the C allele exhibited worse health than women with a C and a T allele and women with two T alleles. Women who were CC reported more hip and wrist fractures, more osteoporosis, and more cataracts than the other groups.[13] They also were on average 4–6 mm shorter than the other women, as well as slightly lighter in weight"
For colder, European climate, bigger weight/size is preferable (and bigger body requires stronger bones). Not so for warmer/Asian areas where smaller body size is ok and thus more favorable, in particular because it requires less animal protein, etc... which is less available there than in Europe.
Besides, descendants of Scandinavian immigrants have no problem living quite comfortably in, say, Brazil. The genetic difference between different peoples is not large enough to justify treating milk as essential for some group of people but not for others. It's just a convenient and relatively cheap source of nutrition, that's all.
No kidding. Oslo, annual average, 6.5C, Beijing : 12.5C. That's 59 latitude vs. 39, different Sun angle, longer days, etc... you know. And, btw, northern Chinese noticeably taller than south.
>The genetic difference between different peoples is not large enough to justify treating milk as essential for some group of people but not for others.
the study mentioned above explicitly describes the results of consuming milk vs. not consuming due to genetic difference. To me the difference is essential (grew in Russia). As result of evolution in Norway and overall Europe, people there also treat milk as essential.
A world that relies on trade is a world at peace.
it is a stretch. Free trade just isn't always the best approach to every situation.
>A world that relies on trade is a world at peace.
again, big stretch. Just for example:
http://www.economist.com/news/books-and-arts/21578978-world-...
"Rather, the world of 1913 was quite like that of 2013: modern, substantially urbanised and, even as Woodrow Wilson set about slashing import tariffs, thriving on global trade. "
Good point - people were in fact using the argument that the extent of international trade made large wars between powers like Germany and the UK unlikely...
Colonialism was driven by a lust for trade, so that's hardly a truism.
Look outside Europe. Dairy consumption is not even the global norm.
"A country can do without uranium, it can't do without staple food".
shortage of staple food will cause price spike with related economical/political/social effects. Staple food isn't just a whimsical choice of consumer. Beside some exceptions (where people moved and brought their tradition with them), a staple food is a result of hundreds or thousands of years of evolutionary optimization for that population in that region. Milk in Europe is exactly such a case, and is a very important one to the population there. (see my other post in this thread https://news.ycombinator.com/item?id=7034795). Specifically, in case of milk in Norway any issues with its availability, in addition to short term price-spike related effects, would in long term affect negatively health and well being of children whose body/skeleton would be forming at the time.
However, my other point, that Norway can easily import 100% of its food demand (see "if Norway entirely stopped producing food, it would still eat just fine"), stands.
The issue is what if we can't. As I've pointed out elsewhere in this thread, this has happened - the most well known instance being the British 5 year naval blockade during the Napoleonic wars, which caused years of famine, and death.
And because of Norway's extremely strategic position, with a long coast line and many defensible ports if you have naval superiority, coupled with huge oil industry, and a position to lock the Russian Northern fleet out of the Atlantic, any defence planning for Norway is going to assume that in the case of another war, Norway will either be occupied or attempted blockaded or both.
Then the situation changes. Norway has very little arable land due to the mountains, so it is not a given that taking the dairy away would leave us with sufficient food in the case of a blockade. Certainly during the British blockade we did not have enough food to sustain a much smaller population.
Is that wrong?
the cows (and other grazing animals in their group) evolved very special stomach to consume the grass (parts of grasses) which aren't consumable by predators like humans.
The comparison of consuming human-edible plants (or their parts) directly vs. feeding it to cows is rooted in industrialized beef production where corn is fed to cows. Such wasteful conversion of human edible food into more tastier/pricier human edible food allows for higher revenue and larder total profits - people will eat the same calories, beef is just more expensive packaging of it and thus generates more total revenue and profit in the societies which can afford it and want it.
>I'd still expect grain to be even easier to get -- animals are something of a luxury item
In normal situation, cows milk is a source of calories _additional_ to the grain as cows are fed on grasses grown where grain cultivation doesn't make much sense - short summer, not plain land, etc... They also fed on [minimally processed - fermented in big piles] wheat stems after grain is extracted. The cows feed today also includes processed waste from other areas of food industry - the quality of this stuff varies greatly from country to country depending on regulations and industry and society mentality about it.
It very much is considered a vital part of diet in Norway, though, to the point where you'd pretty much be considered to be abusing your children if you don't ensure they drink lots of milk. While we certainly could survive without it, any politicians suggesting to Norwegians we should do without milk would find themselves out of a political career.
http://www.pbs.org/newshour/bb/world/july-dec11/egyptfood_11...
Perfect timing, as Norway is currently gearing up for the celebration of 200 years since the Norwegian constitution.... which was preceded by years of famine due to a British naval blockade (Norway was dragged into the Napoleonic wars due to Denmark, so the British blockaded our ports for 5 years)
It is something that is well remembered, in particularly thanks to the poem Terje Vigen (http://en.wikipedia.org/wiki/Terje_Vigen) by Henrik Ibsen, about a man who tried to run the blockade in a rowboat to smuggle food for his starving family from Denmark, only to be imprisoned by the British and upon his release in 1814 finding his family had died.
It's a poem that is central to teaching of Norwegian literature in schools, and also often brought up in history classes, including in primary school.
"Past this amount, tariffs are exceptionally high, in the neighbourhood of 246% for cheese and over 300% for butter. "
Has anyone started Moober ("it's Uber for cows") to disrupt this yet?
What did Australia do in response to comments like these?
Elected this guy: https://newmatilda.com/2013/08/08/big-mining-lines-behind-ab...
South Korea was traditionally (mid-20th-century) viewed as cursed by a lack of natural resources. In this sense, it has already reached the phase of "nothing left for future generations". What's so bad about this?
Hmm. Stereotypes, hey?
[1] http://www.theage.com.au/news/national/give-us-a-break-austr...
There's a great free resource where you can learn more about things you don't know much about: http://en.wikipedia.org/wiki/Economy_of_Australia
I wish people didn't have such short political memories.
The other thing to remember is that Norway doesn't have much other than oil in terms of natural resources, while Australia has a strong agricultural sector (including the most fertile rice-growing acres in all of asia). It's not an excuse, just that it is worth noting that Australia isn't so reliant on one-time resources.
It's unfair that an small elite is able to squirm their way into wealth in such a manner. But that is the nature of humanity - isn't much i can do about it.
While governments here have gradually privatised various state-owned entities, Norway has built fair, national strength. StatOil is Norwegian. It's not going to play capital strike and up and leave if the political climate doesn't suit it was Rinehart threatens and mining tax opponents claim.
It amazes me that the mining tax hot potato of recent politics in Australia was ever an issue. Surely that was a great opportunity to do something similar either short term or long-term for Australia?
It's not an ideal situation, much more free market, but it's one of the greatest moves by an Australian government ever in my opinion
EDIT:
Let me refine that query--emigrating as an English-speaking American software engineer and tech, without dependents.
He loves it.
In exchange for a lower pay (and higher taxes?) you get vacation, great job security and a lot of benefits.
Before relocating, check if your skills are sought after :)
I'm from the UK and settled here 8 years ago. All it took was a trip to the tax register in Oslo, fill in a few forms and that's it.
Jobs are relatively easy to find. The main job board in Norway is at: http://finn.no/jobb
Only thing really to complain about is the expense of damn near everything. But even that, you can get used to.
and: http://monda.no/blog/ifln/
=)
Norway have quotas for people with specific skills and it is my understanding that it is not that hard to get a Visa.
I also know several other companies, e.g. Opera Software, are mostly english speaking and most large companies in Norway within Oil&Gas, and Finance have english as a corporate language.
[1] http://www.mnemonic.no/en/Andre-sprak/English/Career/Jobs-at...
Living in a country that may get a few hours of weak sunlight in winter doesn't appeal to me, no matter how high the standard of living might be otherwise.
Your personal preferences will vary, of course.
In comparison, the US government seems so....mismanaged.
Pretty much all others do ... Europe is sinking in debt because politicians use it to fund the bribes given to voters to get them re-elected.
Norway is swimming in money from exported oil. Countries with balanced foreign trade need a different approach to the macro-economy.
The only reason our net position currently is as good as it is, is the oil combined with the realisation that spending all that oil money would drive inflation through the roof.
Many economists say that austerity measures like cutting infrastructure spending and public health care hurts the economy more than it helps in the long run. You'll probably find Norway in that camp, considering their social welfare, universal health care and free higher education.
[1] http://www.npr.org/blogs/money/2011/09/06/140110346/how-to-a...
http://pri.org/stories/2012-06-06/norways-example-oil-and-ga...
http://www.ft.com/intl/cms/s/0/99680a04-92a0-11de-b63b-00144...
If the global economy moves to electric vehicles - which is all but guaranteed at this point - the existing hyper scale market for oil will disappear.
Speaking financially, they should drill and sell as much of it as possible as fast as possible, particularly with today's excellent prices.
Leaving it in the ground is as good as destroying the wealth it represents here and now.
The best conversion they could do is to build the world's best renewable energy infrastructure, and drive it to a large surplus that they can export. Build the best education system, so all of their 5 million people get top notch educations. Build the best commercial infrastructure to keep their economy competitive. Invest into robotics and really any IT and R&D, and perhaps compete in new forms of automation based high value manufacturing.
I kid, I kid, but no really, I am glad someone is getting it right.
20% unemployment rate or 3.3%? Can't figure that one out.
I don't know if this is the same in Norway, but if it is, it might help explain the discrepancy.
This came up the recent US recession because at the beginning of the "recovery," a significant portion of the drop in official unemployment rate came from people who had stopped looking for employment and resigned themselves to being out of the labor force for the time being.
(Here at Brazil that number is smaller, but not a lot either, it's usualy over 10%.)
http://www.ssb.no/en/arbeid-og-lonn/statistikker/aku
Some 70% percent of the population that "should" be eglible for work are "in the work force". 3% of those, are not employed currently.
Note that such numbers are very hard to compare without proper context -- you have to have numbers for pensioners, those too sick to work etc -- to compare it. IIRC Norway's work force participation is pretty high -- so you can be shocked by the "1 in 5" number, but it's entirely unremarkable.
edit: Here are some numbers quoted by NHO "the main representative organisation for Norwegian employers" (note, employers, not employees):
https://www.nho.no/en/Business-in-Norway/Norwegian-Labour-Ma...
edit2: More relevant statistics from OECD at eg: http://stats.oecd.org/index.aspx?queryid=27359
Not only that, but also in establishing a national oil company instead of privatizing everything to funnel profits to some large corporations.
I'd like to know how they manage to prevent corruption in these areas, in Austria (where I live) it's quite common to rob the taxpayer blind and line politicians' pockets while privatizing assets.
Yah, that's just blind luck. Would've at least shown some strategic and tactical skills if they stole it from someone else.
Unfortunatly it will NEVER happen.
The money is invested and some of the yearly return on that investment is spent each year. At present the government is at liberty to spend up to 4% of the fund each year (though they don't always do this, due to risk of creating inflation, heating up the real-estate market etc). The investment fund is well-managed, but some argue that spending 4% each year might mean we're eating into the principle.
Pensions are paid from the Government Pension Fund - Norway. The sovereign wealth fund in the article is the Government Pension Fund - Global.
The former is what people pay into from their taxes, and is used to directly pay pensions. The latter is currently only used sparingly.
The interesting question is, do high oil prices help this cause or not?
High oil prices definitely cause people to adjust their behavior (consider EVs, use public transit,etc [demand destruction]).
http://www.aip.com.au/pricing/internationalprices.htm
Saudi Arabia doing 16 cents a litre isn't helping anyone: http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_p...
http://www.tcs.ch/de/assets/reisen-camping/reiseinfos/themen...