Economics Lesson from Norway

When capitalism seemed on the verge of collapse last fall, Kristin Halvorsen, Norway’s Socialist finance minister and a longtime free market skeptic, did more than crow.

As investors the world over sold in a panic, she bucked the tide, authorizing Norway’s $300 billion sovereign wealth fund to ramp up its stock buying program by $60 billion — or about 23 percent of Norway ’s economic output.

“The timing was not that bad,” Ms. Halvorsen said, smiling with satisfaction over the broad worldwide market rally that began in early March.

The global financial crisis has brought low the economies of just about every country on earth. But not Norway.

With a quirky contrariness as deeply etched in the national character as the fjords carved into its rugged landscape, Norway has thrived by going its own way. When others splurged, it saved. When others sought to limit the role of government, Norway strengthened its cradle-to-grave welfare state.

And in the midst of the worst global downturn since the Depression, Norway’s economy grew last year by just under 3 percent. The government enjoys a budget surplus of 11 percent and its ledger is entirely free of debt.

By comparison, the United States is expected to chalk up a fiscal deficit this year equal to 12.9 percent of its gross domestic product and push its total debt to $11 trillion, or 65 percent of the size of its economy.

Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter. It counted $68 billion in oil revenue last year as prices soared to record levels. Even though prices have sharply declined, the government is not particularly worried. That is because Norway avoided the usual trap that plagues many energy-rich countries.

Instead of spending its riches lavishly, it passed legislation ensuring that oil revenue went straight into its sovereign wealth fund, state money that is used to make investments around the world. Now its sovereign wealth fund is close to being the largest in the world, despite losing 23 percent last year because of investments that declined.

Norway’s relative frugality stands in stark contrast to Britain, which spent most of its North Sea oil revenue — and more — during the boom years. Government spending rose to 47 percent of G.D.P., from 42 percent in 2003. By comparison, public spending in Norway fell to 40 percent from 48 percent of G.D.P.

“The U.S. and the U.K. have no sense of guilt,” said Anders Aslund, an expert on Scandinavia at the Peterson Institute for International Economics in Washington. “But in Norway, there is instead a sense of virtue. If you are given a lot, you have a responsibility.”

Eirik Wekre, an economist who writes thrillers in his spare time, describes Norwegians’ feelings about debt this way: “We cannot spend this money now; it would be stealing from future generations.”

Mr. Wekre, who paid for his house and car with cash, attributes this broad consensus to as the country’s iconoclasm. “The strongest man is he who stands alone in the world,” he said, quoting Norwegian playwright Henrik Ibsen.

Still, even Ibsen might concede that it is easier to stand alone when your nation has benefited from oil reserves that make it the third-largest exporter in the world. The money flowing from that black gold since the early 1970s has prompted even the flintiest of Norwegians to relax and enjoy their good fortune. The country’s G.D.P. per person is $52,000, behind only Luxembourg among industrial democracies.

As in much of the rest of the world home prices have soared here, tripling this decade. But there has been no real estate crash in Norway because there were few mortgage lending excesses. After a 15 percent correction, prices are again on the rise.

Unlike Dublin or Riyadh, Saudi Arabia, where work has stopped on half-built skyscrapers and stilled cranes dot the skylines, Oslo retains a feeling of modesty reminiscent of a fishing village rather than a Western capital, with the recently opened $800 million Opera House one of the few signs of opulence.

Norwegian banks, said Arne J. Isachsen, an economist at the Norwegian School of Management, remain largely healthy and prudent in their lending. Banks represent just 2 percent of the economy and tight public oversight over their lending practices have kept Norwegian banks from taking on the risk that brought down their Icelandic counterparts. But they certainly have not closed their doors to borrowers. Mr. Isachsen, like many in Norway, has a second home and an open credit line from his bank, which he recently used to buy a new boat.

Some here worry that while a cabin in the woods and a boat may not approach the excesses seen in New York or London, oil wealth and the state largesse have corrupted Norway’s once-sturdy work ethic.

“This is an oil-for-leisure program,” said Knut Anton Mork, an economist at Handelsbanken in Oslo. A recent study, he pointed out, found that Norwegians work the fewest hours of the citizens of any industrial democracy.

“We have become complacent,” Mr. Mork added. “More and more vacation houses are being built. We have more holidays than most countries and extremely generous benefits and sick leave policies. Some day the dream will end.”

But that day is far off. For now, the air is clear, work is plentiful and the government’s helping hand is omnipresent — even for those on the margins.

Just around the corner from Norway’s central bank, for instance, Paul Bruum takes a needle full of amphetamines and jabs it into his muscular arm. His scabs and sores betray many years as a heroin addict. He says that the $1,500 he gets from the government each month is enough to keep him well-fed and supplied with drugs.

Mr. Bruum, 32, says he has never had a job, and he admits he is no position to find one. “I don’t blame anyone,” he said. “The Norwegian government has provided for me the best they can.”

To Ms. Halvorsen, the finance minister, even the underside of the Norwegian dream looks pretty good compared to the economic nightmares elsewhere.

“As a socialist, I have always said that the market can’t regulate itself,” she said. “But even I was surprised how strong the failure was.”

http://www.nytimes.com/2009/05/14/business/global/14frugal.html?emc=eta1

Telepresence T3 Tandberg

TANDBERG Technology Breakthrough Shatters the Barrier of Proprietary Telepresence

Today TANDBERG (OSLO: TAA) announced its Telepresence T3 is the first and only immersive telepresence solution that maintains the multi-screen, high-definition telepresence experience when calling out to a third-party telepresence system. This new functionality is meeting the growing demands of organizations that require all video systems to fully interoperate, putting an end to siloed communication.

"Organizations are turning to telepresence solutions now more than ever for the fast return on investment from reduced travel and increased productivity. However, as unified communications become more and more important, enterprises can't afford to invest in solutions that cannot work together," said Dominic Dodd, Global Program Director, Unified Communications & Collaboration, Frost & Sullivan. "By enabling telepresence systems to interoperate, TANDBERG has upped the ante by creating a standard that all telepresence providers will have to live up to if they want to be included in future purchasing decisions."

Recognized for outstanding design, the TANDBERG Telepresence T3 provides the best telepresence experience in the industry. It is interoperable with the TANDBERG product portfolio, Microsoft Office Communications Server, and other standards-based video endpoints and telepresence systems. Today's announcement extends that interoperability to provide the full telepresence experience when connecting with users of Polycom telepresence. This advanced telepresence interoperability, enabled through a TANDBERG Telepresence Server software upgrade, allows organizations to get the most out of their existing and future telepresence investments by enabling them to connect to a wider audience.

"Organizations shouldn't be locked in by technology. Our vision is to enable open communities where people can collaborate naturally no matter how they are connecting," said Fredrik Halvorsen, CEO, TANDBERG. "TANDBERG Telepresence systems are already interoperable with a broad range of third-party solutions. With high-definition multi-screen interoperability, TANDBERG delivers the best possible experience for customers connecting to their existing, or their partners' telepresence systems."

To read more:

http://ajax.sys-con.com/node/936739

Young People's Wellbeing

A table of young people's wellbeing in 29 European states - the EU plus Norway and Iceland - has ranked the UK 24th.

The Netherlands was top while only Romania, Bulgaria, Latvia, Lithuania and Malta came lower than the UK.

The table, about youngsters aged up to 19, was compiled by York University researchers for the Child Poverty Action Group using mostly 2006 data.

The government commented that its policies were lifting more than a million children out of poverty.

The researchers assessed the countries on 43 separate measures, ranging from infant mortality and obesity to material resources - like poverty and housing.

Table: Youth wellbeing rankings

Also included were how children felt about their lives, schools and relationships.


CATEGORIES
health
subjective wellbeing
relationships
material resources
behaviour and risk
education
housing and environment

Feeling pressured by schoolwork, for example, fed into the measurement of "subjective wellbeing".

The study suggests little improvement since a similar report by Unicef two years ago, BBC correspondent James Westhead said.

The Netherlands led overall and was also in the upper third of the table in each area. Scandinavian countries dominated.

The UK's rank of 24th was well below the position which might be expected given its affluence, the Child Poverty Action Group (CPAG) report said.

Workless

Britain's best score, 15th, was in children's relationships - including how easy they say they find it to talk to their parents and get on with their classmates.

On material resources, the UK was 24th out of the 26 countries for which data was available.

"The UK position is particularly influenced by the high number of children living in families where no parent works. Only Lithuania and Poland do worse," said the report.

CPAG is not arguing against government policy focusing on income growth for the poorest families and the impact of public services.

But it says the current recession means many families are threatened with rapid income falls.

"There is nothing inevitable about the UK doing badly on child wellbeing," it says.

"The challenge should be to reverse this situation and put children front and centre of policy making."

Looking beyond 2010, the charity has a series of recommendations:

* Protect jobs, remove barriers to work such as unsuitable and expensive childcare.
* Mend the "safety net" which it says leaves many families struggling well below the official poverty line.
* Drop means tests in favour of universal benefits such as child benefit.
* Stop in-work poverty from low wages.
* End the "classroom divide" in which children growing up in poverty have lower attainment.
* Provide fair public services for those who need them most.
* End "poverty premiums" which mean poor families pay more for basic goods, utilities and services and more of their income in taxes.
* Ensure a decent home for every family.

CPAG says that as most of the data in the report is from three years ago - which is not unusual in international comparisons - many recent government policy initiatives are not fully reflected.

"The figures should therefore be read as a criticism of UK society, but not necessarily of recent social policy," it stresses.

England's children's minister, Beverley Hughes, added that the fact that a government department had been created to focus on children, schools and families showed the increased importance being given to children.

"Our Children's Plan is our long term vision and it puts children and families at the centre of everything government does," she said.

"Our policies have lifted 600,000 children out of poverty and halved absolute poverty. Policies announced in the last two years will lift around a further 500,000 children out of poverty.

"We are very proud that the majority of our children are happy and do well but in those cases where children and their families face problems, we will continue to invest in high quality services which provide the vital help and support that they need."

The CPAG report follows a BBC Newsround survey of 1,000 children around the UK.

Many were worried about money, bullying and knife crime - but most nevertheless said they were happy.

Overall ranking

1 Netherlands
2 Sweden
3 Norway
4 Iceland
5 Finland
6 Denmark
7 Slovenia
8 Germany
9 Ireland
10 Luxembourg
11 Austria
12 Cyprus
13 Spain
14 Belgium
15 France
16 Czech Republic
17 Slovakia
18 Estonia
19 Italy
20 Poland
21 Portugal
22 Hungary
23 Greece
24 United Kingdom
25 Romania
26 Bulgaria
27 Latvia
28 Lithuania
29 Malta

http://news.bbc.co.uk/2/hi/uk_news/education/8008926.stm