Wee yes but not too wee! Certainly not poor! And clearly not stupid – but more importantly, having the agency to use its good sense. It’s the story of Norway. It’s the long term legacy of North Sea oil.
This is prompted by an e-mail alert from the data synthesiser, Statista. It has just published (29 January) an account of the world’s major sovereign wealth funds. It tells us about Norway’s. We learn that the Norwegian Government Pension Fund (NGPF) is (still) the largest of any sovereign wealth fund in the world. According to data from the SWF Institute, the fund contained more than $1.1 trillion as of January 2021. Most of the assets are tied up in stocks, bonds and real estate across the world .
Only the China Investment Cooperation fund comes close to Norway’s fund in value, with assets of just above $1 trillion. The other sovereign wealth funds in the top eight are much smaller. Their assets range from between $370 and $580 billion for funds located in places such as Hong Kong, China, Singapore, Kuwait and the United Arab Emirates.
From the Statista report: “The unique Norwegian fund was set up to invest government revenues from fossil fuel industries into sectors deemed more sustainable in order to provide for a future when the country can no longer rely on its income from oil. The Norwegian government is free to use up to three percent of the fund’s volume annually for social purposes – that number currently amounts up to $33 billion.” (c. £24 billion at current rates of exchange)
(Interestingly, companies involved in ‘production of nuclear weapons’ are excluded from Norway’s investment portfolio: the list of companies specifically excluded contains BAE Systems.)
For perspective, in its 2019-20 budget, the Scottish Government was able to allocate c. £5 billion for capital spend and c. £29.5 billion for resource spend. (Source: The Scottish Government’s proposed spending and tax plans for 2019 to 2020. Annex A). Remember, the Norwegian government collects taxes too!
In the 2019-20 report on the Fund to Norway’s parliament in 2020, there are these explanatory statements:
“The Government Pension Fund belongs to the people of Norway. The purpose of the savings in the Fund is to support the funding of pension expenditure under the National Insurance Scheme and to promote long-term considerations in government petroleum revenue spending, in order to ensure that the petroleum wealth will benefit both current and future generations.”
And as to its domestic significance: “The GPFG (the Government Pension Fund Global) forms an integral part of the fiscal budget and fiscal policy framework. Government petroleum revenues are transferred to the GPFG in their entirety, whilst withdrawals from the Fund are determined by resolutions of the Storting. Over time, the Fund has become an ever more important source of funding for public expenditure.”
And in stark contrast, in Scotland we’re condemned as too poor – as dependent, subsidised – in the annual Unionist GERSfest!