Opinion
- Editorial- Commentary
Raffique
Shah: Norway:
good governance, better discipline
ONE can easily learn to love with Norway only
for its majestic fjords that are almost unique
to that country. But its beauty extends far beyond
the landscape and seascape. Here's a country that
discovered oil off its coast at the same time Britain,
Holland and others did in the North Sea. That was
some 70 years after the first productive oil well
was drilled in Trinidad. True, the quantities differed
vastly: ours never exceeded 300,000 barrels per
day (bpd), while Norway ranks 10th among oil producers
at 3.2 million bpd. Its reserves are also far bigger
than ours, both in oil and gas.
But so are its size, its population,
its climate challenges, with its northern extremities
lying
in some of the most hostile conditions. Long before
oil propelled it into big bucks, it had harnessed
hydro-electricity to the extent it could afford
to sell power to neighbouring Sweden and Finland.
I was in the Lapland region of Finland a few years
ago, fascinated by this vast landscape of snow,
ice and forests. I observed power lines crossing
the area near the town of Ivalo, and I wondered
where the electricity came from. Surely, it could
not be from way south in Helsinki. "No," my
host said. "Power in this part of Finland
comes from Norway."
In fact, Norway first make its
mark with the exploits of the Vikings, but hard
on the heels of these
feared Nordic warriors came a thriving fishing
industry that survives to this day, and makes up
a significant part of the country's revenue. From
fishing and boat-building (that evolved into a
reputable ship-building industry), Norway moved
into the fast-forward mode after the discovery
of oil. But unlike so many other oil-producing
countries that wallowed in wealth as the "black
gold" flowed, the Norwegians remained frugal
in dealing with their new circumstance.
Its government and citizens eschewed the ostentatious
lifestyles that the Arabs adopted. According
to a recent Time magazine article: "The
historic commodities boom that we are living
through now shows that the Dutch disease is just
as often absent from resource-rich countries
as it is present. The key is governance." Pause.
Think. It's not a matter of how much oil or gold
or gas you have, although it might be good to
have such resources. Time: "Some of it,
as Norway has shown, is just straightforward
economic fundamentals: sound monetary policy,
open trading and investment regimes. Enforced
laws against corruption are basic."
Huh? Sure, we have similar laws
in T&T. But
when last was any "big boy" brought to
justice for being corrupt? And corruption here
did not start with the UNC in government. It goes
as far back as during colonial rule, but took Concorde-like
flight when the first oil boom hit us "like
a dose of salts" (Michael Manley's words)
in 1973. Doug Saunders of the Globe and Mail wrote: "While
other countries have become apathetic and uncompetitive
during petroleum booms, Norway appears near the
top of every international index of competitiveness
and entrepreneurship.
"Yngve Slyngstad, 47, is the
manager of the Government Pension Fund-Global,
better known as
'the oil fund.' An adjoining room contains computer
desks staffed by his 11 traders, who invest the
$1 billion in oil money his office receives every
week. In exchange for the right to drill, they
must hand 78 per cent of their profit over to Mr
Slyngstad's fund.
This is Norway's long-term savings
account, and in the 17 years since it was launched
it has become
one of the four largest investment funds in the
world. It currently holds $368.2-billion, or $78,351
for each Norwegian citizen."
Saunders continued: "The Management
Rule is the heart of Norway's economic miracle.
It is
a profound act of self-discipline: all but four
per cent of Norway's oil earnings must be placed
in the fund for savings; nothing can be withdrawn
from the fund until the oil is gone, decades from
now; and-most crucially-absolutely none of the
money can be invested inside Norway."
Double "Huh?" "Even as oil has soared,
Norway has avoided high inflation and its non-oil
companies have grown more competitive. Only about
10 per cent of Norway's $70-billion government
budget comes from oil money. In order to finance
their generous state services and social benefits,
Norwegians' income taxes are among the highest
in the world, and their gas stations charge $2.30
for a litre of unleaded-the highest price in the
world, in a country that is the world's third-largest
exporter of the stuff."
I see the glint of 3-canals-aplenty bearing down
on me: Shah want we to pay US$2.30 per litre for
gas? Take him out! Wooo! I never suggested as much.
I'm only showing what can be achieved with visionary
leadership, a disciplined people, and high-officials
who will not dip their paws in the national cookie-jar.
I can write much more on the Norwegian model. But
I have space only for this: with five million people,
murders topped a whopping 49 last year! And there
are 2,900 prisoners in the country's jails.
Raffique
Shah ,
is columnist of the Trinidad Express.
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commentary was originally published by Trinidad Express, Wednesday,
March 30th 2008. Petroleumworld
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