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Economy of Norway

Norway is one of the world's richest countries in per capita terms. It has an important stake in promoting a liberal environment for foreign trade. Its large shipping fleet is one of the most modern among maritime nations. Metals, pulp and paper products, chemicals, shipbuilding, and fishing are the most significant traditional industries.

Norway's emergence as a major oil and gas producer in the mid-1970s transformed the economy. Large sums of investment capital poured into the offshore oil sector, leading to greater increases in Norwegian production costs and wages than in the rest of Western Europe up to the time of the global recovery of the mid-1980s. The influx of oil revenue also permitted Norway to expand an already extensive social welfare system. Norway established a petroleum fund (the Government Pension Fund Global) to save and invest the state’s oil and gas earnings. The fund reached a milestone of 3 trillion kroner (over $500 billion) in assets in October 2010. Thanks in part to prudent financial regulation and to high prices in world markets for its energy and fisheries exports, the global financial crisis has had only a limited impact on Norway. Norway’s unemployment rate increased slightly to 3.7% in April 2010. In recent years, labor costs have increased faster than in its major trading partners, eroding industrial competitiveness. Continued recovery and moderate growth was expected to continue in 2010.

Norway twice voted against joining the European Union, but, with the exception of the agricultural and fisheries sectors, Norway enjoys free trade with the EU under the framework of the European Economic Area. This agreement aims to apply the four freedoms of the EU's internal market (goods, persons, services, and capital) to Norway. As a result, Norway normally adopts and implements most EU directives. Norwegian monetary policy is aimed at maintaining a stable exchange rate for the krone against European currencies, of which the euro is a key operating parameter. Norway does not have a fixed exchange rate. Its principal trading partners are the EU, the United States, and China.

Energy Resources

Offshore hydrocarbon deposits were discovered in the 1960s, and development began in the 1970s. Production increased significantly in the 1990s as new fields come on stream. The growth of the petroleum sector has contributed significantly to Norwegian economic vitality. Current petroleum production capacity is approximately 2.6 million barrels per day. Production in gas has increased rapidly during the past several years as new fields are opened, with crude oil production in decline. Total production in 2009 was 2.3 million barrels of oil per day and 102.7 billion standard cubic meters (scm) of gas, totaling 238.6 million scm oil equivalents (o.e.). Hydropower provides nearly all of Norway's electricity, and all of the gas and most of the oil produced is exported.

Norway is the world's sixth-largest oil exporter and second-largest gas exporter (2010), providing much of western Europe's crude oil and gas requirements. In 2009, Norwegian oil and gas exports accounted for approximately 50% of total exports. In addition, offshore exploration and production have stimulated onshore economic activities. In 2009, over 27% of state revenues were generated from the petroleum industry; taxes and direct ownership ensure high revenues. Foreign companies, including many American ones, participate actively in the petroleum sector. The oil industry directly employs roughly 40,000 people in core extraction activities. Over 250,000 are employed in petroleum-related activities.

Petroleum production peaked in the early 2000s, and the pace of discoveries has not been sufficient to reverse that trend. However, innovative use of extraction technologies has extended the lives of fields. Declines in petroleum extraction is to some degree offset by increased extraction of natural gas in both new and existing fields, such as Snohvit and Troll. Given the energy industry’s weight in the economy, diversification into other industries is a long-term challenge for Norway.

GDP (2011): $479 billion.
Annual growth rate (2011): 2.9%.
Per capita GDP (2010, purchasing power parity): $53,738.
Natural resources: Petroleum, natural gas, iron ore, copper, lead, zinc, titanium, pyrites, nickel, fish, timber, hydropower.
Arable land: 2.7%.
Agriculture: Products--dairy, livestock, grain (barley, oats, wheat), potatoes and other vegetables, fruits and berries, furs, wool, pork, beef, veal, fish.
Industry: Types--petroleum and gas, food processing, shipbuilding, pulp and paper products, aluminum, ferroalloys, iron and steel, nickel, zinc, nitrogen, fertilizers, petrochemicals, hydroelectric power, refinery products, timber, mining, textiles, fishing, transport equipment, electronics.
GDP by activity (2010): Oil and gas 22%; general government 16%; manufacturing, mining, electricity, building and construction 15%; value added tax (VAT), etc. 11%; commodities, vehicle repairs, etc. 7%; communication and transport 4%; agriculture, forestry, and fishing 1%; other services (commercial, housing, financial, private health/education, hotel and catering, etc.) 24%.
Trade (2010): Exports (f.o.b.)--$178 billion. Major markets--U.K. 27%, Netherlands 12%, Germany 11%, Sweden 7%, France 6%, U.S. 5%. Imports (f.o.b.)--$122 billion. Major suppliers--Sweden 14%, Germany 12.3%, China 8.4%, Denmark 6.1%, U.K. 5.9%, U.S. 5.2%.

Geography of Norway

Location: Northern Europe, bordering the North Sea and the North Atlantic Ocean, west of Sweden Map references: Europe Area: total area: 324,220 sq km land area: 307,860 sq km comparative area: slightly larger than New Mexico Land boundaries: total 2,515 km, Finland 729 km, Sweden 1,619 km, Russia 167 km Coastline: 21,925 km (includes mainland 3,419 km, large islands 2,413 km, long fjords, numerous small islands, and minor indentations 16,093 km) Maritime claims: contiguous zone: 10 nm continental shelf: 200 nm exclusive economic zone: 200 nm territorial sea: 4 nm International disputes: territorial claim in Antarctica (Queen Maud Land); maritime boundary dispute with Russia over portion of Barents Sea Climate: temperate along coast, modified by North Atlantic Current; colder interior; rainy year-round on west coast Terrain: glaciated; mostly high plateaus and rugged mountains broken by fertile valleys; small, scattered plains; coastline deeply indented by fjords; arctic tundra in north Natural resources: petroleum, copper, natural gas, pyrites, nickel, iron ore, zinc, lead, fish, timber, hydropower Land use: arable land: 3% permanent crops: 0% meadows and pastures: 0% forest and woodland: 27% other: 70% Irrigated land: 950 sq km (1989) Environment: current issues: water pollution; acid rain damaging forests and adversely affecting lakes, threatening fish stocks; air pollution from vehicle emissions natural hazards: NA international agreements: party to - Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Sulphur 85, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity, Climate Change, Endangered Species, Environmental Modification, Hazardous Wastes, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Wetlands, Whaling; signed, but not ratified - Air Pollution-Sulphur 94, Desertification, Law of the Sea, Tropical Timber 94 Note: About two-thirds mountains; some 50,000 islands off its much indented coastline; strategic location adjacent to sea lanes and air routes in North Atlantic; one of most rugged and longest coastlines in world; Norway and Turkey only NATO members having a land boundary with Russia.

Government of Norway

The functions of the king are mainly ceremonial, but he has influence as the symbol of national unity. Although the 1814 constitution grants important executive powers to the king, these are almost always exercised by the Council of Ministers in the name of the king (King's Council). The Council of Ministers consists of a prime minister--chosen by the political parties represented in the Storting--and other ministers.

The 169 members of the Storting are elected from 19 fylker (counties) for 4-year terms according to a complicated system of proportional representation.

The special High Court of the Realm hears impeachment cases; the regular courts include the Supreme Court (18 permanent judges and a president), courts of appeal, city and county courts, the labor court, and conciliation councils. Judges attached to regular courts are appointed by the king in council after nomination by the Ministry of Justice.

Each fylke (county) is headed by a governor appointed by the king in council, with one governor exercising authority in both Oslo and the adjacent county of Akershus.

POLITICAL CONDITIONS

Until the 1981 election, Norway had been governed by majority Labor Party governments since 1935, except for three periods (1963, 1965-71, and 1972-73). The Labor Party lost its majority in the Storting in the 1981 elections.

From 1981 to 2005, governments alternated between Labor minority governments and Conservative-led coalition governments. In the run-up to the 2005 election, Labor Party leader Jens Stoltenberg reached out to the Socialist Left (SV) party and agrarian Center party to form a “Red-Green” coalition government that commanded a majority of seats in parliament. Stoltenberg’s government was the first majority government in Norway in over 20 years, but the governing coalition has had to bridge substantial policy differences to build this majority. The 2005 election was historic because it was the first time the Labor Party was in a coalition government since the 1940s, the first time SV was ever in a government, and the first time the Center Party joined with the socialist parties as opposed to the right-of-center parties. On September 14, 2009, the “Red-Green” coalition won reelection for 4 more years after winning 86 of the 169 seats in parliament.

The Stoltenberg-led coalition government that took office in October 2005 and was reelected in 2009 continued the northern policy laid down by the Bondevik government in 2003. This "High North" strategy has remained one of the constant themes of this government and encompasses many of the government’s highest priorities, including environmental protection, responsible development of energy resources, maintaining a security presence in the Arctic, and developing Norway’s relations with Russia. In 2010, Norway concluded agreements with Russia resolving their disputed maritime boundary in the Barents Sea and Arctic Ocean and facilitating travel for border residents.

Principal Government Officials
King--Harald V
Prime Minister--Jens Stoltenberg
Minister of Education--Kristin Halvorsen
Minister of Local Government and Regional Development--Liv Signe Navarsete
Minister of Foreign Affairs--Jonas Gahr Stoere
Minister of Defense--Grete Faremo
Minister of Finance--Sigbjoern Johnsen
Minister of Trade and Industry--Trond Giske
Minister of Transport and Communications--Magnhild Meltveit Kleppa
Minister of Health and Care Services--Anne-Grete Stroem-Erichsen
Minister of the Environment and International Development--Erik Solheim
Minister of Justice--Knut Storberget
Minister of Petroleum and Energy--Ola Borten Moe
Minister and Chief of Staff at the Office of the Prime Minister--Karl Eirik Schjoett-Pedersen
Minister of Research and Higher Education--Tora Aasland
Minister of Culture--Anniken Huitfeldt
Minister of Agriculture and Food--Lars Peder Brekk
Minister of Government Administration and Reform--Rigmor Aasrud
Minister of Labor--Hanne Bjurstroem
Minister of Fisheries and Coastal Affairs--Lisbeth Berg-Hansen
Minister of Children, Equality and Social Inclusion--Audun Lysbakken
Ambassador to the United States--Wegger Christian Strommen
Ambassador to NATO--Vegard Ellefsen
Ambassador to the United Nations--Bente Angell-Hansen

Norway maintains an embassy in the United States at 2720 - 34th Street NW, Washington, DC 20008 (tel. 202-333-6000) and consulates in Houston, Minneapolis, New York, and San Francisco.

Government Type: Hereditary constitutional monarchy. Independence: 1905. Constitution: May 17, 1814. Branches: Executive--king (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--modified unicameral parliament (Storting). Judicial--Supreme Court, appellate courts, city and county courts. Political parties: Labor, Conservative, Center, Christian Democratic, Liberal, Socialist Left, Progress. Suffrage: Universal over 18. Administrative subdivisions: 19 fylker (counties), and Svalbard. National holiday: May 17.

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History of Norway

The Viking period (9th to 11th centuries) was one of national unification and expansion. The unification of Viking settlements along the Norwegian coast was well advanced by the death, in 1030, of St. Olav, who had overseen the population's conversion to Christianity. A period of civil war ended in the 13th century when Norway expanded its control overseas to parts of the British Isles, Iceland, and Greenland. Norwegian territorial power peaked in 1265, and the following year the Isle of Man and the Hebrides were ceded to Scotland. Competition from the Hanseatic League and the spread of the Black Death weakened the country. The Norwegian royal line died out in 1387, as the country underwent a period of union with Denmark under King Olaf; union with Sweden followed in 1397. Attempts to keep all three countries united failed, with Sweden finally breaking away in 1521. By 1586, Norway had become part of the Danish kingdom. The Napoleonic War saw Denmark side with France in 1807, following the British attack on Copenhagen. With Sweden joining the coalition against Napoleon in 1813, the Treaty of Kiel in 1814 transferred Norway to the Swedish King following Denmark's defeat. The Norwegians ignored this international agreement and chose the Danish Prince as their king and adopted the liberal Eidsvoll Constitution. After a few months a Swedish-Norwegian union was agreed under the Swedish crown, with Norway being granted its own parliament (Storting) and government. However, the Swedish King attempted unsuccessfully to revise this constitution in the 1820s and 1830s, and parliamentary control over the executive was only obtained following a struggle during the 1870s and 1880s. Norwegian nationalism was associated with the creation of a national standard for written Norwegian based on dialects, rather than the Danish-based official language. There were numerous disputes between the Norwegian Government and Sweden, notably over requests for a Norwegian consular service to reflect the importance of Norway's expanding merchant fleet. In 1905 the union between the two countries was dissolved following two plebiscites in Norway, one opting for independence and one for a constitutional monarchy. Danish Prince Carl was unanimously elected as King by the Storting in 1905 and took the name of Haakon VII (after the kings of independent Norway) on his arrival in Norway. Haakon died in 1957 and was succeeded by his son, Olav V, who died in January 1991. Upon Olav's death, his son Harald was crowned as King Harald V. Norway was a nonbelligerent during World War I, but as a result of the German invasion and occupation during World War II, Norwegians generally became skeptical of the concept of neutrality and turned instead to collective security. During the German occupation 736 Norwegian Jews perished; Norwegians saved more than 900 Jews by hiding them and smuggling them across the border into Sweden. Norway was one of the signers of the North Atlantic Treaty in 1949 and was a founding member of the United Nations. The first UN General Secretary, Trygve Lie, was a Norwegian. Under the terms of the will of Alfred Nobel, the Storting (parliament) elects the five members of the Norwegian Nobel Committee who award the Nobel Peace Prize to champions of peace.

People of Norway

Ethnic Norwegians speak a Germanic language. Northern Norway is also the traditional home of communities of Sami people who speak a non-Indo-European language. In recent years, Norway has become home to increasing numbers of immigrants, foreign workers, and asylum-seekers from various parts of the world. There are 600,900 immigrants and 100,000 Norwegian-born persons with immigrant parents living in Norway (as of January 2011). The majority of immigrants are from Poland, Sweden, Germany, and Iraq. Thirty-four percent of immigrants have Norwegian citizenship. Approximately 12.2% of Norway’s population is comprised of immigrants; the percentage is significantly higher in Oslo.

The constitution provides for freedom of religion, and other laws and policies contribute to the generally free practice of religion in Norway. The Evangelical Lutheran Church of Norway, the state church, enjoys some benefits not available to other religious groups. Education is free through the university level and is compulsory from ages 6 to 16. At least 12 months of military service and training are required of every eligible male; approximately 40% are exempted from service for health or other reasons annually. Norway's health system includes free hospital care, physicians’ compensation, cash benefits during illness and pregnancy, and other medical and dental plans. There is a public pension system.

Norway is in the top rank of nations in the number of books printed per capita. Norway's most famous writer is the dramatist Henrik Ibsen. Artists Edvard Munch and Christian Krogh were Ibsen's contemporaries. Munch drew part of his inspiration from Europe and in turn exercised a strong influence on later European expressionists. Sculptor Gustav Vigeland has a permanent exhibition in the Vigeland Sculpture Park in Oslo. Musical development in Norway since Edvard Grieg has followed either native folk themes or, more recently, international trends.

 

Nationality: Noun and adjective--Norwegian(s).
Population (January 2011 est.): 4,937,000.
Annual population growth rate (2009): 1.3%.
Density (2009): 16 per sq. km. (excluding inland water).
Ethnic groups: Norwegian (Nordic, Alpine, Baltic); Sami, a racial-cultural minority; foreign nationals from Nordic and other countries.
Membership in nationally registered religions (2010): Church of Norway (Lutheran) 78%; Roman Catholic 1.3%; Pentecostal Christian 0.8%; other Christian 3.5%; Muslim 2.0%; other, none, or unknown 14.4%, including a Jewish community of approximately 818 people.
Languages: Bokmal Norwegian (official), Nynorsk Norwegian (official), small Sami- and Finnish-speaking minorities (Sami is official in six municipalities). English is widely spoken.
Education: Years compulsory--10. Literacy--100%.
Health: Infant mortality rate (2010)--3.1 deaths/1,000. Life expectancy (2010 est.)--men 78.6 years; women 83.1 years.
Work force (2011, 3.6 million): Legislators, senior officials, and managers 6%; professionals 13%; technicians and associate professionals 25.3%; clerks 6.8%; service workers and market sales workers 24%; agricultural, forestry, and fishery workers 2.2%; craft and related trades workers 10.2%; plant and machine operators and assemblers 7.1%; other occupations and unspecified 5.2%.