Norway: Economic and Political Outline

Economic Overview

After more than 15 years of high growth (annual average of more than 5%), Norway was affected by the global economic recession; however, the drop in production was less severe when compared with other countries. After a slight economic decline of 1.4% in 2009, growth returned in 2010-11 due to reflationary measures, household consumption, the dynamic real estate market, and favorable terms of trade. A dip in growth is expected in 2012 (1.5%) due to difficulties encountered by the Eurozone.

Despite being highly dependent on oil prices, the Norwegian economy is very stable with positive prospects. The main challenge for the government is to maintain a stable growth in an adverse international environment while reducing any weaknesses resulting from the tax burden, high levels of household debt, and raised real estate prices. The program of the centrist government emphasizes employment, the environment, and the reform of the education and healthcare system.

Norway is a rich country, with the second highest rate of PNB per capita in the world (55,6000 USD in terms of purchasing power parity). The country also holds first place in the United Nations Development Program’s human development index. Contrary to initial fears, unemployment was maintained during the crisis and has stabilized at a low rate (3.3% of the active population).

Main Sectors of Industry

Agriculture contributes to nearly 2% of the GNP. Fishing is an important activity, with Norway as one of the biggest exporters of fish in the world. Agricultural subsidies are therefore very important.

Norway’s economy relies on its natural resources and energy sources (oil, gas, hydraulic energy, forests, and minerals). Oil production dominates the economy, making up nearly one quarter of the GNP. Norway is also a major producer and exporter of natural gas. Despite Norway boasting one of the largest sovereign wealth funds in the world, the political consensus is to save oil and gas revenues for future generations. Shipbuilding, metals, wood pulp and paper, chemical industry, machinery, and electrical equipment make up Norway’s main manufacturing industries. Norway also has one of the largest and most modern fleets in the world.

The service sector is highly developed and accounts for more than three quarters of GNP.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

70.3/100

Position:

Mostly free

World Rank:

29/179

Regional Rank:

16/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Ministry of Agriculture and Food
Ministry of Trade and Industry
Ministry of Foreign Affairs

Statistical Office

Central Office for Statistics

Central Bank

Central Bank of Norway

Stock Exchange

Oslo Børs

Other Useful Resources

Confederation of Norwegian Business and Industry
CIA World Factbook

Main Online Newspapers

Aftenposten
Dagens Naeringsliv ( only in Norwegian )
Verdens Gang ( only in Norwegian )
The Norway Post

Economic Portals

Portals to the World: Norway
Bedin - Establishing and running business in Norway

Political Outline

Type of State

A constitutional monarchy based on parliamentary democracy.

Executive Power

The constitution grants executive powers to the King (the head of state), but these are exercised by the cabinet. King serves a ceremonial role with some reserve powers. After elections the majority leader is usually appointed Prime minister (the head of the cabinet) by the monarch with the approval of the parliament.

Legislative Power

A modified unicameral parliament or Storting. For certain purposes the parliament divides itself into two chambers called Lagting and Odelsting, but the practice will be abolished after the general elections in 2009 making Storting fully unicameral. Members are elected for four-year terms according to a system of proportional representation.

Main Political Parties

- DNA (Norwegian Labour Party) - Social democrats
- FrP (Progress Party) – Libertarian right-wing party
- Høyre (Conservative Party) - Conservatives
- Venstre (Liberal Party) – Social liberals
- KrF (Christian Democratic Party)
- SV(Socialist Left Party) - Socialists.
- SP (Centre Party) - Centrist and agrarian party.

Labour Party, Socialist Left and the Centre Party form the current cabinet. Coalition governments of several parties are typical in Norway.

Current Political Leaders

King: HARALD V (since January 1991) - hereditary
Prime Minister: Jens STOLTENBERG (since October 2005) – DNA

Next Election Dates

Parliamentary: September 2013

Indicator of Freedom of the Press

World Rank:

2/179

Evolution:

1 place up compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).