ECONOMY…by Alex Porter
Norway’s oil fund goes to the top of the class according to a world-famous think tank.
Run by Norway’s central bank Norges Bank, the pension fund – Statens pensjonsfond utland – is fuelled by oil revenues and is now worth £327 Billion.
In terms of size Norway’s fund is the second-largest in the world trailing only Abu Dhabi. For every man, woman and child in Norway the fund manages £67,000. Last year the fund grew by a staggering 26% – the equivalent of more than 2 years grant from Westminster to Scotland.
Now the prestigious US think-tank, the Peterson Institute for International Economics, based in Washington DC has awarded the fund 97 out of 100 points when measuring it for structure, ownership, responsibility and management. (1)
This is the highest score of any fund and ahead of California’s state pension fund (calPERS) on 95 points and New Zealand’s Superannuation Fund on 94.
Norway’s Finance Ministry owns the fund on behalf of the people of Norway but the Norges Bank Investment Management (NBIM) unit of the central bank manages it on a day to day basis. Almost all of Norway’s oil and gas revenues are invested into the fund and invested for future generations. Some 60% of the fund is then reinvested in company shares in stock exchanges around the world. Only 4% of the revenues from the oil and gas sector are used for public spending.
Talking to the newspaper Dagens Næringsliv. Norway’s Finance Minister Martin Shancke said of the rankings: “We’re satisfied that we score so highly, and higher than the last time”
In a recent interview with Newsnight Scotland’s Gordon Brewer, the former chief economist of the World Bank and former key economic advisor to President Bill Clinton, Joseph Stiglitz explained that successive British governments have squandered North Sea oil revenues instead of investing them. Joseph Stiglitz is now an advisor to Scotland’s First Minister, Alex Salmond.
As the crisis in Britain’s public finances deepen companies in the North Sea oil sector are set to represent 20% of all UK corporation tax. The success and first-class international profile of Norway’s oil fund will be pointed to by SNP leaders as evidence that oil taxation powers should be transferred to the Scottish government and an oil fund established.