The £740bn Norwegian Sovereign Wealth Fund is going to invest more in British assets, looking for a return in a 30 year time span. It already owns Regent Street and a chunk of BP and HSBC. They say it’s a decent bet whatever the Brexit outcome.
Arguments ensue over whether this is a vote of confidence in the UK and it’s ‘free markets after Brexit’ (Jacob Rees Mogg) or a reflection that British assets are cheap and could offer good returns once the dust has settled. Who knows?
I’m more interested in the Soveriegn Wealth Fund itself. It is the Norwegian government’s official state pension fund, created from their oil and gas profits, for the benefit of Norwegian citizens. Many countries with oil and gas reserves have soveriegn wealth funds. Why the **** don’t we? How exactly have British citizens benefited from 50 years of North Sea oil? Where has the money gone? Answers on a postcard.
You're going to need a little bit of context mixed with historical background for this one - so allow my indulgence.
Firstly - Norway has from the outset been the proud owner of far more oil reserves than its geography was entitled to.
This was due to some of the most inept negotiations ever conducted - led by the then foreign minister Per Hækkerup in 1963.
His descending family continue to contest that the night before the key negotiations, he and his team did not get so drunk, that they couldn't care less what they were siging the day after, consequently giving up all the rights that were Danish, through Greenland. Can ssure that this "myth" that they puport, is no myth. They thought they had the deal done the day before, were so super confident and the bon viveurs they were, got drunk to celebrate.
This "deal" gave Norway approxamately 60% more oil and gas fields then it should have had. More pertanent was that these fields proved to be the "lushest" of the North Sea. Other natural resources such as fishing, iron ore, copper and not forgetting Christmas trees provided a decent portfolio already.
Secondly - Norway's population is roughly the same as Denmark 5.5M - At the time of initial exploration this was closer to 4M, not alot of people with quite some surplus. This working population were then concentrating their education on Offshore production + all the other support industries.
Thirdly - It's Scandinavia, decent people who are OK with paying taxes and high prices, well grounded people who go with the collective.
Now, these ingredients persay do not necessarily lead to a full and proper use of this bonanza, it was just the platform. Your question has hopefully been provided with how the resources came about in the first place.
Why were Norway able to create this soveireign wealth fund? Purely becasue the politics of the country is geared towards long term. The need for keeping or acquiring power at all costs is alien to Scandinavia. Working with the other parties and even allowing non ruling parties to decide on certain aspects of policy is something that still happens today. I'm threatening to become the thing I hate the most, being boring, but will repeat, it is this point that sets Scandinavia apart from the rest of the world. Consensus, long term, socialist thinking policy making really can work.
Some of the downsides? - Many Norwegains are thoroughly lazy bastards. It has become almost too easy for them. They hold their business principles for too long sometimes. They could have weathered the recent oil crisis much better with a modicum of flexibility.
Entry level to Norway for business is prohibitive.
I do like Norway and the Norwegains though - stunning scenery, very honest people and they can drink!!
I must say my best working relations have also been with Norwegains and their companies - You definitely know where you stand with them.
As for thethe money from UK North Sea?
You've had it in a different way.
Right to Buy
Lower taxation
An armed forces way over the need for the country
Development and propping up of the Financial Sector
Didn't you enjoy it?
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Dear god the cringeworthy ****e that it spouts is unreal.
