Stuff I Did Not Know: Norwegian

Norway has two official languages: "Bokmål"  ("book language) and "Nynorsk"("new Norwegian").    There are at least two other written forms without official status: "Riksmål" ("national lanaguage") and Høgnorsk ("high Norwegian"). There are many local spoken dialects. There is no official elite standard speech, though "standard østnorsk" ("standard east Norse") is the form usually taught to foreigners.  Mainland Norway covers about 148746 square miles, about the size of Montana.  It has a population of 4.8 million, about the same as Alabama.

Norway's Best Friend

One of the great puzzles of modern public policy is: how come Norway got it right? Recall: nearly every polity with significant natural resources turns into a kleptocracy where gangsters wrangle over the resource pool while everybody else can go to hell. Think Putin's Russia; think Harlan County, KY.

So how did Norway get it right, emerging as the poster child for responsible management of a resource find? This is another victory that probably has a thousand fathers, but thanks to Michael for showcasing a Financial Times story that identifies at least one. He's an Iraqi who came seeking medical care for his kid.

His name is Farouk al-Kasim, an Iraqi oil technocrat, married to a Norwegian he had met while studying in London. They had three children, but the youngest had cerebral palsy and needed medical care he would not get at home. So they came back to Norway. I won't repeat the rest of Martin Sandbu's fine story, except to make it clear tht al-Kasim appears to have played a central role both in the technical and in the institutional/political part of the Norwegian story. The FT headline writer calls him "The Iraqi who saved Norway from oil," which is certainly hyperbole, but if he didn't do the job single-anded, still Sandbu makes it clear that he played an important role in making it happen. Great reading, highly recommended.

Those Crabby Norwegians

Here's some World Bank data that may throw light on the assertion that those Scandinavian countries that seem so wealthy are really so expensive (link). The magic phrase is "purchasing power parity." Remember the McDonald's hamburger index and note that you get one set of numbers if you measure by exchange rates and another, if by purchasing power. There are lots of tidbits: Singapore, for example is richer (PPP) than Switzerland, and just about even with the US.

But Norway--oh my, Norway. In exchange rate terms, GDP per capita in Norway is $65,300, half again better than the US (=$41,700). Control for PPP and Norway falls to $47,600--still comfortably ahead of the US, but far enough off from the nominal number to make the average consumer choke on his lutefisk.

H/T: Milken Institute Review.

Fn.: Checking the spelling of "lutefisk," I ran across a reference in the "Food Lover's Companion." Yeh, right.

What Do the Norwegians Do?

I asked: what do the Norwegians do with their sovereign wealth (link)?

A commentator offers an answer. Here’s a fascinating story form the NYT that I missed last spring (link):

Norway has amassed a fortune of more than $300 billion over the last decade, thanks to its profits from oil exports. Yet few countries are more ambivalent about their vast wealth than this modest, socially conscious society of less than five million people.

So rather than managing their monstrous nest egg simply for the best returns, the reluctant billionaires of Norway are using the money to advance an ambitious ethical code they established in 2004 for their oil reserve, known as the Government Pension Fund. …

Public pension funds on both sides of the Atlantic commonly avoid investing in certain companies on social or ethical grounds. But it is rare for a sovereign state to make such judgments, and rarer still for one to do it in the pointed, public way that Norway has … Twelve of the 21 companies on Norway’s excluded list are American. …

“We’ve managed to combine professional fund management with an ethical approach,” said Kristin Halvorsen, the Norwegian finance minister. “We see them as two sides of the same coin.”

Socially responsible investing, she said, has not hindered the fund’s performance. In 2006, it generated a return of 7.9 percent, a shade higher than the government’s target. …

Norwegians have long viewed themselves more as humanitarians than oil barons. The country played a central role in pushing a United Nations treaty banning land mines, and it was host for the Oslo peace talks between Israel and the Palestinians.

Still, as the world’s No. 3 oil exporter after Saudi Arabia and Russia, Norway’s wealth has become harder to ignore.

The government began salting away its oil proceeds in a special reserve in 1996. Known until last year as the Petroleum Fund, it was renamed the Pension Fund, which is supposed to make Norwegians aware that the fund’s purpose is to provide for future generations.

With the spike in oil prices, it has become the biggest public fund in Europe. At the rate it is growing, experts say it will be worth $800 billion to $900 billion in a decade. That translates into $180,000 for every man, woman and child in Norway.

“Inevitably, Norwegians feel bad about having all this money,” said Gro Nystuen, a human rights lawyer who is chairman of an ethics council that screens investments. “Our job is to make the Norwegian people feel less guilty.”

Even before the ethics code was adopted, Norway placed restrictions on where the fund could put its money. To avoid overheating the economy, it can invest only in companies outside Norway. Half its holdings are in Europe; about 30 percent are in the United States.

“We basically own a slice of the world,” said Henrik Syse, who runs the fund’s corporate governance department at the Norwegian central bank.

A moral philosopher by training, Mr. Syse said he drew on the likes of Aristotle, Kant, and Mill in his efforts to influence the behavior of companies. While he tries to redeem companies, the ethics council decides which ones are destined to fall short.

The grounds for exclusion fall into five categories: serious or systematic human rights violations; serious violations of individual rights in war and conflict; severe environmental damage; gross corruption; and other serious violations of fundamental ethical norms.

The decision to ban makers of land mines and cluster bombs was widely accepted here, though when Norway added companies involved in nuclear weapons production, a few critics noted that the country had willingly taken shelter under NATO’s nuclear umbrella. The fund sold off nearly $1 billion worth of stock in all these companies. …

Branching out from companies to countries, Norway recently said that it would not invest in Myanmar, formerly known as Burma, which has jailed the democracy activist Aung San Suu Kyi.

Critics see a slippery slope. There is already a move to add tobacco companies to the excluded list. If Myanmar is banned, than why not also shun Saudi Arabia, with its record on women’s rights? Then again, Norway’s state oil company, Statoil, is active in Islamic countries.

“There is a double standard,” said Christian Tybring-Gjedde, a member of the opposition Progress Party.

Ms. Halvorsen acknowledged the dilemma. Blacklisting companies that worsen climate change, she said, would put Norway in an awkward spot as its national fortune rests on fossil fuels. …

Why are so many of the companies American? “It is your dominance of the world economy,” Ms. Halvorsen said, smiling and shrugging her shoulders.

It's the One on the Right

They say that Karl Rove distrusted Hans Blix because Blix is a Swede and Rove is Norwegian (link). What’s the difference? Well, which is closer, Jupiter or Saturn? For most people, the distinction is too small and it’s just too hard to remember. I think I know, because my mother was a Swede, but for those who need a little refresher:

I’m sensitive to the problem because I come from New Hampshire, which people keep confusing with Vermont, but Vermont is upside down (I was going to do a cute graphic here, but it would take too long).

From DieselSweeties, and HT BoingBoing.

PS: Jupiter.