Everyone in Norway became a theoretical crown millionaire on Wednesday in
\na milestone for the world’s biggest sovereign wealth fund that has
\nballooned thanks to high oil and gas prices.<\/p>\n
Set up in 1990, the fund owns around 1 percent of the world’s stocks, as
\nwell as bonds and real estate from London to Boston, making the Nordic
\nnation an exception when others are struggling under a mountain of debts.<\/p>\n
A preliminary counter on the website of the central bank, which manages
\nthe fund, rose to 5.11 trillion crowns ($828.66 billion), fractionally
\nmore than a million times Norway’s most recent official population
\nestimate of 5,096,300.<\/p>\n
It was the first time it reached the equivalent of a million crowns each,
\ncentral bank spokesman Thomas Sevang said.<\/p>\n
Not that Norwegians will be able to access or spend the money, squirreled
\naway for a rainy day for them and future generations. Norway has resisted
\nthe temptation to splurge all the windfall since striking oil in the North
\nSea in 1969.<\/p>\n
Finance Minister Siv Jensen told Reuters the fund, called the Government
\nPension Fund Global, had helped iron out big, unpredictable swings in oil
\nand gas prices. Norway is the world’s number seven oil exporter.<\/p>\n
“Many countries have found that temporary large revenues from natural
\nresource exploitation produce relatively short-lived booms that are
\nfollowed by difficult adjustments,” she said in an email.<\/p>\n
The fund, equivalent to 183 percent of 2013 gross domestic product, is
\nexpected to peak at 220 percent around 2030.<\/p>\n
“The fund is a success in the sense that parliament has managed to put
\naside money for the future. There are many examples of countries that have
\nmot managed that,” said Oeystein Doerum, chief economist at DNB Markets.<\/p>\n
Norway has sought to avoid the boom and bust cycle by investing the cash
\nabroad, rather than at home. Governments can spend 4 percent of the fund
\nin Norway each year, slightly more than the annual return on investment.<\/p>\n
Still, in Norway, oil wealth may have made the state reluctant to make
\nreforms or cut subsidies unthinkable elsewhere. Farm subsidies allow
\nfarmers, for instance, to keep dairy cows in heated barns in the Arctic.<\/p>\n
It may also have made some Norwegians reluctant to work. “One in five
\npeople of working age receives some kind of social insurance instead of
\nworking,” Doerum said, despite an official unemployment rate of 3.3
\npercent.<\/p>\n","protected":false},"excerpt":{"rendered":"
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