The Nordic Economies
Norway's Oil Fund
Norway invests its oil revenue in a giant sovereign wealth fund, spending only a small share each year and saving the rest for future generations.
How to manage a resource windfall.
Discovery
Oil was found in the North Sea in the late 1960s.
The fund
Revenue goes into the Government Pension Fund Global, invested abroad in shares, bonds and property.
Rule
The government may spend only around 3 per cent of the fund’s value yearly, roughly its expected return.
Benefits
It prevents overspending, protects against currency swings and saves for the future.
Rainy day discipline
When oil prices rise, spending doesn't jump.
Assuming resource wealth always creates a curse
Norway shows good institutions can avoid it.
Key takeaways
- Norway saves its oil revenue.
- A rule limits spending.
- The fund invests abroad.
- Institutions avoid the resource curse.
No recording for this one yet - EconReader can read it aloud for you.