Norway 2015

Norway Capital City

Yearbook 2015

Norway. It was a year of political and economic hardship for the minority government. The Høyre and the Progress Party (Frp) ended up in conflict with the support parties Venstre and the Christian People’s Party (Krf), which demanded that the government reverse the tightening of the asylum policy previously implemented by Frp. According to COUNTRYAAH, Oslo is the capital of Norway which is located in Northern Europe. Many families with children who had lived in Norway for a long time had been rejected, and Krf threatened to withdraw their support to the government.

After hard negotiations, Frp was forced to give in in April. Children who have been in Norway for more than four years and have been rejected for a certain period have the right to a new trial. At the same time, Frp got through some new austerity measures, including for family reunification.

In June, the Frp was forced to make another difficult compromise in a broad political agreement that Norway would receive 8,000 refugees from Syria in two years. The Labor Party and other opposition wanted to take 10,000 Syrian refugees, but Frp did not want to take any. Many in the Frp were critical of the settlement, not least the former party leader Carl I. Hagen, who was upset about the fraud.

The municipal and county elections in September were a loss for the government parties, while the left parties went ahead, most notably the Green Party, the Green Party, which became the wave champion in several cities. In Oslo, the Labor Party, the Socialist Left Party and the Miljøpartiet took over, and even in Bergen there was a change of power since Høyre had lost more than a third of his mandate.

In parallel with the political setbacks, the economy declined. At the beginning of the year, the oil price had fallen about 60% in six months, creating major problems for the Norwegian oil industry with subcontractors. In the oil city of Stavanger, unemployment increased by 50% in one year, and during the summer the country’s unemployment increased more than expected to 4.5%. The Norwegian krone was squeezed, and in August the value of the Swedish krona, the lowest quotation of over 15 years, was tangible. However, the tourism industry earned a low krone value, and fewer Norwegians traveled to Sweden to shop.

Tax revenues from the oil fell by about 40% compared to the previous year, and before 2016 it looked as if the state oil fund would shrink when withdrawals were made to finance the budget. In that case, it would be the first time since the Oil Fund was established in 1996. The fund had a size of almost NOK 7 billion and the politicians had not expected to cut it until later. But the fund grew less than usual, and at the same time it was more than usual in budget financing. At the end of the year, Prime Minister Erna Solberg declared that the “sunshine period” was over for Norway.

Then a record number of asylum seekers also came to Norway, close to 2,500 in one week, and the government proposed tightening the Aliens Act. In addition, temporary residence permits, stricter rules for family reunification, faster rejections and more were proposed. Border control was also tightened.

Islamist leader Mulla Omar Krekar was a continuing concern for the government. In January he was released after nearly three years in prison for threats, but in February he was arrested again. Then he had said to support the terrorist act in Paris and Copenhagen and stated that Mohammed’s cartoonists deserve death. He was later indicted and sentenced to 18 months in prison. At the end of the year, Italy requested him extradited for suspicion of terror.

In September, the Islamic State (IS) terror group claimed that it was holding a Norwegian prisoner in Syria. Pictures were published of the severely abused man and a large ransom was requested for his release. In November, it was announced that IS had killed the kidnapped Norwegian and a Chinese detainee along with him.

In December, the government was reformed with four new ministers, including the Progress Party’s Sylvi Listhaug, who became a new immigration minister despite making controversial statements about immigrants.

Economics in Norway

Norway is a highly developed industrial country. Living standards and life expectancy are among the highest in the world, illiteracy is negligible and health, nutrition and housing standards are high in international contexts.

Industrialization

The reasons for the high material standard are not basically the country’s natural resources, but that Norway, like the other countries in Western Europe, has undergone the industrialization process that has been going on for 200 years.

Since then, the country has been following the changes required for economic growth. Through extensive trade cooperation and other contact with other countries, Norwegian society and business received impetus for new, advanced economic activities.

According to economic statistics, economic growth accelerated in the 20th century. The average annual increase in the national product was 1.8 percent from 1865 to 1890, 2.5 percent from 1890 to 1915, 3.3 percent from 1920 to 1939, 4.6 percent from 1946 to 1984, and 2.5 percent from 1984 to 2011.

This growth is due to many factors, and it is difficult to isolate and quantify the contribution of each factor. However, there is reason to expect that high investments in production equipment, better and longer education as well as technical and organizational progress in business and public administration have contributed a lot to the growth.

Mixing Economy

Like the other countries in Western Europe, Norway has largely built on private property rights and private business in the development of industry and most other industries. The country’s economic system therefore has a strong character of market economy.

However, the state has introduced elements of a planning economy both in its own business activities and in the regulation of the private business, so that Norway’s economic system is best characterized as a mixed economy.

The characteristic is public regulation of large parts of the private business. This has been combined with state operations in some key industries, but government involvement has been declining in step with deregulation and privatization across the industrialized world.

Primary

Of the primary industries, almost all agriculture and fisheries are based on private business, while the state owns about 6 percent of the productive forest land.

Industry

The industry is mainly privately owned. The state was the sole owner of the military companies Kongsberg Weapon Factory, Raufoss Ammunition Factories and Horten Verft, formerly the Navy’s Main Shipyard, and of the Norwegian Ironworks and the Norwegian Coal Works.

From the 1980s Horten Verft has been closed down, Kongsberg Weapon Factory has been dissolved in several companies, Raufoss partially privatized and Norwegian Ironworks completely privatized. As part of the war reparations payments after World War II, the state from Germany received large shareholdings, among other things. Norsk Hydro, so that the state obtained the majority of ownership in these companies.

The industrial companies in which the state has ownership interests are largely run as similar private companies. Some of the companies have had periods of partly significant losses, and the state has probably placed lower demands on the return on share capital than the corresponding private companies have to do.

The state is a significant owner of hydropower and electricity plants. The war settlement also led to the state acquiring considerable interest in the quarries, and in connection with a more active Svalbard policy, in 1975 the state took over all the capital in Great Norwegian Spitsbergen Kulkompani.

The Norwegian state’s oil company (Statoil) occupies a dominant position in oil extraction on the continental shelf, as well as in the petrochemical industry, oil refining and marketing. In 2001, Statoil was partially privatized and renamed Statoil ASA. In 2006, Statoil and the Oil and Gas Division of Norsk Hydro merged. In connection with the merger, the state made a purchase and now owns 67 percent of the company.

Providing services

In the service industries, the state is in control of rail and mail, but NSB and Posten have been given a freer position in relation to the state. The telecommunications services have remained a state monopoly until the 1990s, and although the state-owned limited company Telenor from 1998 is exposed to competition in all areas, they have retained a dominant position in the market.

The trend towards weaker ties with the state is also evident in, inter alia, broadcasting. By the way, the EEA agreement has led to the import monopoly on alcohol and medicines has lapsed.

In the banking sector, there are state banks for the most important industries such as agriculture, fisheries and industry, for municipalities, district development, housing purposes and education. The Post Bank (with postal giro) turned to the public. Postbanken has now been taken over by DNB.

State regulations

The state regulation of business and industry has various implications. Various licensing schemes limit the turnover of commercial properties and the use that can be made of them. Regulations of working environment and pollution, product control, accounting regulations and the like set limits on the conduct of business activities.

The introduction of corporate democracy gives employees the right to take part in decisions that were previously made by the owners. Taxes, fees and subsidies also affect the profitability and operating conditions of the business.

The state’s ownership interests are widely disseminated, and the background for the state commitment is very different, as a rule, state operation has been considered as an appropriate instrument for solving specific industrial or social policy problems. Only exceptionally, socialization principles have played a role.

From the 1990s, state ownership in the business sector bears more of a purely financial investment.

Norway Capital City