Norway Saves Oil Money Instead Of Spending It
by Geo Beats
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While other countries choose to get-rich-quick off of oil sales, Norway puts its oil earnings into a national savings account.
While many oil-rich countries spend their earnings on both outlandish civic projects and acquiring personal assets, Norway chooses to take its oil and gas revenue and put it into a sovereign wealth fund.
Numerous studies have shown that oil-rich nations are known to suffer from corruption, civil wars and autocracy. Those are three things Norway doesn't have to deal with.
By having what can be considered a national savings account, the citizens have entrusted their government to manage the money properly. And so far it's paid off.
The fund is worth about $8 billion dollars, and owns 1% of the entire world's stocks. If split evenly amongst the country's residents, everyone would become a millionaire in kroners.
It's expected the fund will grow to be over $9 billion dollars by the end of 2014.
This will allow the government to spend more.
One reason for this growth of wealth is because oil is more difficult to extract in Norway than in other countries, slowing down the payoff.
Norwegians also prefer to have the money saved to go towards their country's future.
Only four percent of the surplus is allowed to be spent or invested on public projects, so the money isn't going to anything frivolous.
While the country enjoys the comfort from this wealth, visitors to Norway may be shocked to see how much things cost. While relative to wages, $10 for a cappuccino may seem exorbitant to many.
While many oil-rich countries spend their earnings on both outlandish civic projects and acquiring personal assets, Norway chooses to take its oil and gas revenue and put it into a sovereign wealth fund.
Numerous studies have shown that oil-rich nations are known to suffer from corruption, civil wars and autocracy. Those are three things Norway doesn't have to deal with.
By having what can be considered a national savings account, the citizens have entrusted their government to manage the money properly. And so far it's paid off.
The fund is worth about $8 billion dollars, and owns 1% of the entire world's stocks. If split evenly amongst the country's residents, everyone would become a millionaire in kroners.
It's expected the fund will grow to be over $9 billion dollars by the end of 2014.
This will allow the government to spend more.
One reason for this growth of wealth is because oil is more difficult to extract in Norway than in other countries, slowing down the payoff.
Norwegians also prefer to have the money saved to go towards their country's future.
Only four percent of the surplus is allowed to be spent or invested on public projects, so the money isn't going to anything frivolous.
While the country enjoys the comfort from this wealth, visitors to Norway may be shocked to see how much things cost. While relative to wages, $10 for a cappuccino may seem exorbitant to many.