Tag Archives: Sovereign wealth fund

Is Norway Really Happy?

28 Mar

When you think about it Norway doesn’t really have much going for it. It’s Geographical  position is one of the coldest parts of Europe. Long cold winters are a part of life in a country that has 30% of its landmass in the Arctic circle. Temperatures drop significantly, snow arrives lack of light and darkness is pretty much a way of life from November to February. So much so they call it Mørketiden ( murky times) in the far northern regions. The long days of sunlight from June to August must play havoc with the Nordic Circadian rhythm.

Norway was extremely poor before the late 1960’s and the they discovered oil. Until then Norwegian life was nothing like it is today’

The high rate of taxes between 40/45% of Salary and a vat rate of 25% on goods and 15% tax on food take quite a chunk out of everyone’s earnings. A Tv licence is 2680 KR which is €317. So you would expect some quality TV for that price.More about that later.

They don’t spend too much time at cinemas or in restaurants due to the high cost. They haven’t got the same love affair with coffee as the Finns and the Swedes both number 1 and 2 in the world coffee drinking rankings. They don’t even like ice cream as much as the ice cream obsessed Swedes or enjoy Fika( drinking coffee with a sweet treat) as Swedes do daily and at 3pm in almost all workplaces .

You need to be quite organised to buy alcohol, as only alcohol below 4.75% abs can be sold in supermarkets, anything stronger must be sold in state-run shops Vinmonopolet.They close by 18:00 on weekdays and 15:00 on a Saturday and no alcohol sales on Sunday. So If you like a drink in Norway you need to plan ahead. Even queuing up to purchase your alcohol is no guarantee you will get it as if it says 18:00 hrs on the till by the time you get to the counter you can forget about your party tonight. The till shuts down sales.

They have a criminal Eurovision song contest record finishing last 11 times. This overshadows the 3 wins they have to date. But creates a record in itself as no other country has had so many “Nul” points as Norway.

I have never been to a party yet where someone has said  “if only we had a few more Norwegians here then the party would really get going” So they don’t have a reputation of being the most sociable people. If they do it’s a well-kept secret.

Prices of coffee, beer and eating out are also seen as quite high in comparison to the rest of Europe and backpackers are told that you would need about €90 a day to get by, seems expensive. People complain about the lack of choice of food especially those that have moved from cultures with more options in a supermarket and sometimes the quality of fruit and veg in some stores seems questionable.

But for some reason

Despite all that I have outlined above, the people of Norway are constantly placed in the top ten happiest countries in the world. In 2017 they stole the top spot from the happy Danish people and beat their closest neighbours Sweden, Iceland and Finland to the top spot.

A Brief history?

Norway is an interesting country. Norway was relatively poor once one of the poorest countries in Europe in the early part of the 20th century. It had spent centuries with an on and off connection to Sweden starting in the 14th century.  and ultimately gaining independence from Sweden on the 7th of June 1905 only to have the 33-year-old  Prince Carl of Denmark called on to become the King of Norway. The National day for Norway is Constitution Day on May the 17th this goes back to 1814 its simply called “Syttende Mai” The Seventeenth of May. Norway and Denmark had sided with and Napoleon against the British and lost but it was the first time Norway had its own independent Constitution. For many years in the Early 19th century the Swedes had not allowed the Norwegians to celebrate this day. The will to celebrate “Syttende Mai” grew in significance. It also coincides with the end of the German occupation of Norway and the cessation of the World war 2 on the 8th of May 1945 which for many Norwegians was another great reason to celebrate Syttende Mai.

It was only with the discovery of oil and gas in the late 1960’s that turned Norway’s economic  fortunes around. It invested the oil revenues in a sovereign wealth fund that has a present day value of $885 billion and they also heavily taxed any foreign investors in Norwegian oil.

What are the 6 Key foundations to a nations Happiness and does Norway have them?

  1. GDP per capita
  2. Social Support
  3. Healthy life expectancy
  4. Social Freedom
  5. Generosity
  6. Absence of Corruption

Norway’s GDP per capita

Norway has an extremely healthy GDP at $64,124 . The nordic average for Finland Iceland,Sweden, Denmark and Norway combined is $47,375. in the 1980’s both Britain and  Norway invested in North sea oil reserves. Rather than splurge on all the money from oil that was discovered the Norwegians created a Sovereign wealth fund. Even with todays low oil prices, Norway is shielded from economic upset and citizens have guaranteed pensions on retirement and very little stress about their future. The fund is worth $885 billion and is the third largest sovereign wealth fund in the world. Britain never developed one and to this day has none.

The cost of living is expensive in Norway. The wages that are paid are commensurate with this and people can afford to get by with limited worries about financial difficulty.  Norway has the 2nd highest female to male ratio income. The normal stresses that the the rest of the world experience are not felt by Norwegians. Once they travel abroad there money goes even further. Frequent shopping trips to neighbouring  Sweden for alcohol and other items can bring savings. Even better is a trip to southern Europe or elsewhere where a Norwegian wallet will buy a bottle of Champagne while the rest of us are drinking Cava.

Social Support

Norway 6

One of the key things to feeling happy is the understanding that someone has your back. In home life or at the workplace “the knowing that there is someone to support you when things might get hard whether you need it or not” is a key component to a positive life evaluation and Norwegians have this. In Norway 93% of people believe that they have someone who they can rely on in times of need.

Norwegian Parents get to share 46 weeks of Maternity/Paternity leave for each child at 100% income if both parents share the leave and 56 weeks at 80% of income. Starting a job and thinking about having children are not a barrier to an employers decision to choose you. It is seen as something that everyone experiences and you may be asked the question at your interview process only to be informed of the great Maternity leave policy that the company have in place for you if you have Children.

Sick pay from work is 100% of salary and Unemployment assistance is 62% of last 3 years salary. Saying that the unemployment figures for Norway are 4%. Which means that many have purposeful employment.

Health care costs per capita are the highest in the world at $9,715. The benefits of high taxes provide all under 16’s and pregnant women with free medical care. Everyone else once they reach an annual deductible medical expense threshold of about €210 then receives free medical care. This takes a huge amount of stress out of the possibility of getting ill as many other countries have private health care systems for their citizens. If a hospital is unable to treat you condition in Norway it will arrange treatment abroad free of charge for you, That is hard to beat.

Education in Norway is free. University is 96% funded by public money. There are no tuition fees. The large student debts that many students end up with in Countries like Britain and the USA only contribute to an unhappy and stressful start to working life. The only debt that Norwegian students end up with from University is if they have needed to move city and rent elsewhere.

Health care on tap, free education for all, Maternity/Paternity leave with at least 80% of salary being paid for up to 56 weeks combined with a 100% sick pay scheme if illness arrives and a 62% of salary unemployment rate if you are unlucky enough to become a part of the 4% unemployed Norwegians.

They Have a healthy Life expectancy.

Eat enough Omega 3’s and this is bound to happen.Norway is surrounded and filled with a lot of water. They have quite a healthy lifestyle. Alcohol consumption is 28th out of all the 33 OECD countries. They also have a good health service and life expectancy of 82 compared with the OECD average of 80.

Also knowing that their future is secure with the $885 billion Sovereign wealth fund as a safety net for any future economic downturns. Norwegians experience less stress in their lives until the winter olympics and the Swedes beat them in Curling.

Almost 100% of the Norwegian population are satisfied with their drinking water. They live an outdoors life and like to Ski at any possible chance. The are surrounded by beautiful clean air and have 32.000 electric cars running on free electricity at present. Clean air in an oil rich country.

Social Freedom

Norway 4

Norwegians value their freedom. They only work 1,423 hours per year the 2nd lowest in the world. They spend 15.6 hours of their day on average concentrating on family,leisure and personal care. That makes sense.

Feriepenger is a word Norwegians have for a month of Holidays in July. Very little gets done in July. The sun is up the weather warmer and everyone gets paid for the month off with 12% of last years salary. Norway even has free bridging days if a public holiday falls on a Tuesday or a Thursday then you get the Monday or the Friday off to spend more time eating Fårikål a national dish of boiled mutton and peppercorns YUM!!!

When asked the question  in the world happiness report 2017  “Are you satisfied or dissatisfied with your freedom to choose what to do with your lives? the Norwegians responded with a resounding yes. Norwegians can choose to go to university and they can readily choose their careers.

Allemansrett: Means you have the right to roam pretty much anywhere in Norway. You can pitch your tent, travel and forage anywhere that is not private land. Norway is a vast country with a population of only 5 million people. There is a lot of land that is free for its citizens to explore and enjoy.

Do Norwegians feel safe.

Norway 5

Norway has quite a low  prison population. It has less than roughly 3,800 in a country with a population of 5 million. Rehabilitation is a big part of prison life. Prisons are open rather than closed and turning inmates into valued members of society is a priority. That makes Norway’s incarceration rate just 75 per 100,000 people, compared to 707 people for every 100,000 people in the US. Taking someones freedom is seen as punishment enough for crimes.

Leaving a purse behind in a coffee shop and returning to find it still where you left it is a common part of Norwegian life. Children are left in prams outside coffee shops as parents drink coffee. Children play outside on dark evenings in the winter and crime levels are very low. The murder rate is among the lowest in the world.

Norwegians take reformation of the individuals importantly. Three young children were playing in the snow one day  in 1994 in Trondheim ,two boys and a girl Silje Redergard. They were six and Silje was five. An argument broke out and Silje was killed by the boys. The boy names were never released and the papers never ran with the story like the Bulger case in Britain. They were immediately assigned into new Kindergartens with the approval of the parents of other children there. Rehabilitation was provided for the boys until they where 18 yrs old. One has responded well the other struggles to this day with what he has done but neither was incarcerated. Silje”s mother although still heartbroken agrees with the system of rehabilitation that Norwegian society has compared to other countries. Even Anders Behring Breivik has only received a 21 year sentence for the killing of 77 people in July 2011. His release will be postponed if authorities do not think he is fully rehabilitated.

Trust

Trust plays a big part in Norwegian society all wages and taxes paid are transparent for everyone to see online even the Prime ministers salary and tax returns,

The Government even employed a Philosopher to government role to advise on how best morally to spend the Sovereign Wealth fund. Henrik Syse advised the government on how spend the oil money that funded the wealth fund. His thinking was it took 200 million years for the oil to be formed let us not waste it in 50 years. The Norwegians use the surplus created from the fund but on Henrik’s advice they never touch the capital because it is not their money but future generations money for them to use. Quite a forward way of thinking that has kept Norway as one of the most stable countries in the world and allowed them to ride out the financial storm of 2008 and the falling oil prices of 2016/17.

They like the slow life

In 2009 the state broadcaster aired a live broadcast of the famous Oslo to Bergen railway journey, filmed from the perspective of the driver at the front of the train. Its a 500km  train journey live on TV and 25% of the Nation watched it probably eating boiled mutton while they did. This was recreated in 2011 in June with a coastal boat trip from Bergen to Kirkenes a 134 hour live broadcast of the boat trip. People came out to greet the ship as it passed and for 6 days the country was enthralled. It was the most watched broadcast in Norwegian Television history with over half the whole population of 5 million tuning in. The Queen even came out to get involved. There have been more slow TV broadcasts of a live crackling fire, salmon fishing, a knitting marathon and canal cruises. All mesmerisingly slow and relaxing and contributing to the calm approach to life that the Norwegians possess. Allowing them more time to write Eurovision hits.

What Norway is doing right.

Norway is a country which has so many of the attributes of a happy society.  People in Norway experience less anxiety about what is around the corner for them. They have an education system that is free and available to all to make choices career wise without incurring the burden of financial debt in the early years of working life. Many jobs in Norway are seen as job for life and are recruited with this in mind. Maternity and Paternity leave can be taken for over a year on between 80 to 100%  pay. Sick pay is 100% of Salary. July is a month of Holiday which is paid for by contributions paid in advance by workers. They have bridging holidays if a national holiday falls on a Tuesday of Thursday to give longer off. That’s smart

Unemployment is at 4% but if you become one of the 4% you are paid 62% of your previous salary until you get your next employment. The Health service is free after you have paid roughly €210 in charges for the year. Any operation that the hospital can not provide for you domestically is organised and paid for abroad.

You are unlikely to go to prison but if you do you will work on a programme of reahabilitation to return you as a functioning member of Norwegian society when you leave. Everyone in prison has a job and many cater for themselves,Trust is a major part of society and everyones wages and taxes are available to view online.

The Government has not squandeed the money made from the oil reserves discovered less than 50 years ago. They have delayed gratification and created a fund of $885 billion that will ensure that the country survives economic downturns and guarantees a pension on retirement to all Norwegian citizens.  With A health life expectancy of 82 years and a beuitiful clean environment to live in. You can see why Norwegians feel as happy about life as they do.

Maybe that happiness can help Norway forget all those nul point Eurovision losses and 11 last place positions.

 

 

 

 

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