Three of the six largest oil producers. Norway's lack of suffering from the so called resource curse isn't that special. What's special about Norway is their privilege to control so much oil with such a small population, quite similar to the sheiks of the Middle East (who have often made their people quite wealthy compared to their less oil fortunate neighbors, as in the case of Saudi Arabia, Kuwait or UAE). No coincidence Norway is also still a backwards monarchy that installs a king as head of state after a thousand years.
> still a backwards monarchy that installs a king as head of state
Our royal family is there mostly just for show. Lots of us walk past the castle on our constitution day and wave to the king and the rest of his family and they wave back. Over the remainder of the year they hold some speeches, attend some openings and other events.
We are a democracy, and the power that is given to our king in the Norwegian constitution of 1814, has actually been managed by the government instead for a long time since then.
The function of our monarchy is largely one of ceremonial nature these days.
There was a vote in stortinget a couple of years ago over whether to disband or retain the monarchy. 36 representatives vote for disbanding the monarchy, and 130 representatives voted for keeping it. I think this is reflective of the overall attitude that we have of our monarchy; some are against it but the majority wants to keep it.
People don't seem to understand the concept of constitutional monarchy, and mistakenly believe that the King or Queen in such setups wield power. They are just titular heads of states in a democratic state where the elected representatives and the government hold the real power.
However, I'd say the United Kingdom is an exception here as the Queen still has a lot of power, legally, many of which they have never exercised (atleast in a public manner).
Some weird quirks include not needing a license to drive or not requiring a passport for international travel. She doesn't need to pay taxes (but does pay some). Apparently the Queen of England also owns all Swans in around river Thames and all the Whales / Dolphins in British waters.
More serious powers include being immune to prosecution, exception from Freedom of Information Request, the ability to over rule ministry decisions (in case of emergency or constitutional crisis), the ability to dismiss a government and call for an election. Any law affecting the monarchy requires the "Queens consent" before it can be debated in Parliament or the Queen can also refuse her assent to discuss a particular bill in parliament. She is the Commander-in-Chief of the entire UK military and has the power to order a nuclear strike.
(Ofcourse, in recent decades, it is understood that most of these powers should only be exercised under the advice of the elected government, but that is not how the laws are written and framed. All in all, I'd say she is the most brilliant politician of the 20th century to hold on to power for so long.)
Some of that is correct, the Queen has soverign immunity (a bit wider in scope than, say, the immunity afforded US presidents), and her household has excemption from some laws.
Some of the power you are referring to is the Royal Perogative in which the monarch is important constitutionally but not practically because the use of the Perogative is reserved for the Prime Minister.
Some of the things you mention, such as 'owning' swans and dolphins are not the possession of the Queen as a person (she can't sell them) but the Crown which is almost a deliberately confusing term that means the state. We'd talk about Crown buildings rather than government buildings for example.
Britan has a deliberately confusing unwritten constitution which works well much of the time and while we like to use language which makes it seem that the monarch has lots of power they really don't. The Queen absolutely does not have a nuclear button nor can she nuke anyone. The power to go to war used to be a Royal Perogative (the PM could declare war) but even this is now lost after adventures in Iraq and requires assent by parliament. Here you are confusing a symbolic role for a commanding role.
I didn't know about the crown / state context, and that makes more sense than the Queen herself owning the Swans and Dolphins. :)
But no, I am not confused about the symbolic roles vs what is written in law.
I am an indian and our current Parliamentary system is a British legacy. We understood the need of a titular role like the Queen in our system, and thus created the position of the President for it. So in India, everything happens in the name of the President of India. E.g. A law becomes a law only if the President signs it. However, our constitution clearly defines the role and the post has no real power over the Executive, Parliament or the Judiciary.
Personally, my perception of the British monarchy has been that the laws assigning the power to the monarchy, as it was then written gives them a lot of power. But it is only in the last 3 - 4 decades that they are being interpreted more "democratically" in modern parliamentary traditions (a reflection of the changing times). And thus it is being taken to mean that all her powers can only be exercised "under the advise of the cabinet", even if some of the laws don't explicitly state that. (As you rightly pointed out, the lack of a written constitution is a very interesting feature of the British system, as it allows for a more "flexible" interpretation of the law by the courts).
Interestingly, unlike in the indian system, a Queen can actually refuse to sign a bill into law. (In India, it is clearly spelled out that the President can refuse to sign a bill into law and send it back to the parliament with his objections. But if it is sent back again, the President has no choice but to sign and make it a law). So in theory, the Queen can over rule any law abolishing the monarchy or its role in the British system! There's also enough leeway, in theory, in the laws for the Queen to assume full power anytime in the future as the Queen can dismiss an elected government and elections can only be held when the Queen calls for it.
> The power to go to war used to be a Royal Perogative (the PM could declare war) but even this is now lost after adventures in Iraq and requires assent by parliament.
If I remember right, didn't the Queen refuse to give her assent to table this bill to the Parliament? (One of the rare times she exercised this power).
In one instance the Queen completely vetoed the Military Actions Against Iraq Bill in 1999, a private member's bill that sought to transfer the power to authorise military strikes against Iraq from the monarch to parliament.
A big difference is that Norway is a sovereign state and didn't have to deal with federal and inter-provincial politics like Alberta did. I have my doubts about whether or not a federal government that has done something like the National Energy Program would allow a province within their country to hold a sovereign wealth fund worth hundreds of billions, or even over a trillion dollars.
> A big difference is that Norway is a sovereign state and didn't have to deal with federal and inter-provincial politics like Alberta did.
As I understand it the Alberta Fund is completely controlled by the province. There is some national policies, especially with exports, that falls under the Feds, but how much (or little) flows into the Fund is completely up to the province.
It is on Alberta itself that it decided to have low/er provincial income taxes and no provincial sales tax. Those things were 'funded' by the resource revenues, which effectively came a sort-of cheque to the habitants of the province. And when oil prices went down, government funded went sideways.
IMHO Alberta shouldn't blame Ottawa for not setting aside something for a rainy day.
I am not saying that there is blame or not, it isn't so much blame as recognizing that there are different circumstances between Alberta and Norway that influenced the direction they went.
The big example is the National Energy Program which (aside from its economic impact on the province) basically tainted politics in Alberta and probably contributed to their hesitancy to contribute to a fund which could potentially be raided by the Federal government in the future.
I am not sure that comparing only sovereign wealth funds per capita tells the whole story. For instance Australia has a lot more private wealth saved up than Norway. At a lower GINI coefficient as well! I am also not sure that the major resource exports like iron ore and coal have the same ability to extract cartel rent extraction of oil, which is a lot more concentrated in the world.
https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...
Wealth per capita $USD 2021:
Country Median Mean
Australia 238k 484k
Norway 118k 276k
The Australian compulsory super-annuation scheme has made Australian long term pension sustainability much better than the rest of the world. How much of the wealth that could have gone into a sovereign fund has gone into private savings instead? I don't know if Norway or Australia did better.
Is doing well be a bar against doing better? The wealthy have no hangups about taking profit so why should the rest of us?
Mining activity is 10% of Australia's GDP. Mineral land rights in Australia are property of the government so why do overseas and private-domestic operators get to make all the profit? When Norway's example shows us that a publicly funded and owned industry was possible!
- Fees are 20x larger as a proportion of AUM ($30 billion a year, nearly as much as the military budget, and 2x what the country spends on electricity)
- The assets are overwhelmingly owned by people who are already rich (Norway's SWF shares the wealth equally)
- Super has totally failed to prevent retirement poverty (elderly single women are the most impoverished demographic in Australia).
Norway has a 1.4 trillion dollars in oil wealth. In Australia individuals save for their own retirement. Comparing these two retirement funding mechanisms on the basis of how much individuals benefit and transaction cost per AUM isn't sensible.
Obviously being given free oil money is better than needing to save.
I don't understand your point at all. Both are very similar pools of assets. Why is it inappropriate to compare management costs and distributional outcomes between the two?
> I don't understand your point at all. Both are very similar pools of assets.
OK, let me explain it. Yes, the assets owned by both funds are financial assets that are comparable. They both own bonds and corporate shares, etc. But the issue is not what assets are in the funds.
When you are given lots of money, this reduces poverty much more than when an individual gets a tax break on saving their own money. Norway has trillions in oil reserves to support a small population. I am not sure why I need to explain this, but having a trillion dollar windfall reduces poverty much more effectively than subsidizing the savings of each individual.
Moreover, when you save each pay period you have to make lots of small little asset purchases, as opposed to making huge purchases in a SWF fund in which the money comes from selling oil, so transaction costs are higher in a 401K style system than when you are sitting on an ocean of free oil.
Australia has an even bigger tragedy in this area: The superannuation system, which could have been a sovereign wealth fund 3x the size of Norway's, but instead was set up as individual accounts that privatize wealth instead of make it public, and amplify inequality instead of reduce it.
I think it's meant to convey grief that Australia has allowed itself to be exploited by foreign miners, and waste the wealth that its natural resources could have generated.
Australia like Britain, did not use Oil royalties to establish abiding sovereign funds to persist after the oil ran out. Instead, the royalty stream has been used to draw down debt, and to replace taxation as an income stream in the present, but oftentimes has led to wasted spend on vanity projects, or on build out of infrastructure purely for extractive industry (mining, oil, gas) which in turn is hoped to generate revenue, but alas, not until a very long time in the future. Displaced costs in forward income estimates, much as in the movie industry, mean some mines and oilwells basically never pay tax, but generate collossal revenue which disappears into company consolidated debt. Its a huge rort of the model. There are royalties, but they are 'subverted' out of the picture.
"its scotland's oil" was about Maggie Thatcher, and how the revenue was spent. Now scotland has independent tax raising powers, the border with england for sea resources was carefully restruck to favour england (look on a map to the boundaries, they aren't what you might think)
Australia has soverign wealth funds. Just, not made with revenue from this kind of industry. This kind of industry dominates the political landscape and has impeded the uptake of solar and wind, and replacement of coal for power generation. I don't mean silently: this is a quite overt distortion, active, such that major corporates actually have withdrawn from the australian mining and minerals council because its like the NRA, single-issue distorting of the polity.
In the early 2000s an Australian labor government tried to raise a tax analogous to a petrol royalties and revenue tax, and was pretty much de-elected by sectional interests on the strength of industry opposition. (the PRRT exists. the MRRT was voted down)
Mining employs around 40,000 people in a nation of 25 million. Solar and Wind and Tourism would probably employ more people. But, the voting effects of mining establish a lock on our senate (and sometimes, lower house) which make it next to impossible to see change. The industry is running the government, at one remove.
I don't believe for a minute Norway is all peaches and cream, but it probably has a better sense of cohesion around its role in the world, and the benefits of the sovereign fund, and future money, and de-carbonising the economy. Norway was an extremely poor, -to the extent of massive nutritional death in winter-poor economy. It's moved the dial to a different place, and done it quite carefully, economically speaking. (Norwegian settlers in the USA and Canada came because of a potato famine)
We're envious. (well, the Australians who don't derive income directly from mining, oil or gas)
> Now scotland has independent tax raising powers, the border with england for sea resources was carefully restruck to favour england
The maritime border used to be a straight east-west line despite the east coast of England being curved. In 1999 it was changed so that it followed established international maritime border conventions regarding distances from the mainland[0].
You believe the change was motivated purely by geographical norms? It was legal on geographical grounds but was obviously motivated on assets and revenue.
I don't believe anything without evidence. It seems like a reasonable piece of tidying up that settles the legal juristiction of vessels in those waters but I look forward to seeing the evidence that it was a spiteful landgrab (watergrab?) so I can adjust my beliefs.
On balance, the maritime border appears to me to have been restruck to be fair.
What are you talking about? Australia hasn't had a recession in decades. Australia has done well with all the resources it stole from the aborigines. Most people living in australia has never experienced an economic downturn.
While you're absolutely correct that Australia hasn't had a recession in that time, this hides the fact that there have been periods when GDP _per-capita_ has declined. Or to put it another way: Australia's recessions have been hidden by immigration-driven growth.
Of course, immigration-driven growth is great! But for people on the ground, what matters is GDP per capita, not total GDP.
Australia hasn't had a recession since the early 90s and you are complaining?
The point that was being attempted was this: Yes, Australia has done well. But it could have done much better if it didn't squander its mineral wealth and hadn't removed an actually-beneficial-to-society mining tax.
Just look at Norway as the example of how much better we could have done.
In turn, we wouldn't be lumbered with egregious mining billionaires like Clive Palmer and Gina Rinehart, who - among other monstrosities - heavily back climate-disruption denial.
It really rescued Britain from the financial mire it found itself in the mid 70s when the country was bust and had to go the IMF. It paid for the economic restructuring which was desperately needed. Dominic Sandbrook's books (Seasons in the Sun: Battle for Britain, 1974-1979 and Who Dares Wins: Britain, 1979-1982) cover this in some detail.
He was telling everyone who would listen that Norway would find oil, and needed to prepare itself.
> His was a lonely, contrarian voice. After examining exploration results, he wrote a report that warned Norway was sleeping, that even though no one had found oil yet, it was only a question of time. And time was short: the country’s leaders needed to prepare Norway to become an oil nation, but they were doing nothing. “I was a constant reminder that they were doing everything wrong,” al-Kasim says pointedly. Only his closest colleagues would listen.
As a complete tangent, I find it quite sad that because of things like the ft paywall, stories like this that are written today will be lost to the sands of time.
While there might be a lot of nonsense peddled around, this article does not belong to that category. It is about one man who saw something that others didn't and convinced them to heed his advice to the betterment of the entire Nation.
Norway is a European country, that no Western gov would colonize or disrupt. This is the primary factor around avoiding “corruption” by oil. Developing countries get baited and coerced into extractive economies that benefit the developed ones - modern colonialism.
All this talk around foresight and smarts painfully ignores reality.
So Russia is colonized? Canada? Brazil? Heck the US for that matter?
You act as if the middle east is the only collection of countries beholden to oil exports, and the only countries making what would otherwise be considered short-sighted moves based on those exports.
It’s almost as if you’re being intentionally obtuse. The established term (that I used) is “modern” colonialism - it doesn’t necessarily involve physical colonization, rather systematic external control.
Russia has been tussling with the West for a prolonged period now. Regardless, they are the second largest exporter of oil to the USA. (1)
Canada is an American, Western country. Not sure why they would fall under my reasoning, which was specifically about non-Western countries. The USA is the one usually leading this oil-hungry warring - it’s even a meme at this point.
Brazil has various issues, most stemming from external influences corrupting the local political powers. Oil is just one of them, they are also coerced to deforest their country for European exports. (2)
>It’s almost as if you’re being intentionally obtuse. The established term (that I used) is “modern” colonialism - it doesn’t necessarily involve physical colonization, rather systematic external control.
I'll ignore the part where you started off by attacking me and point out: I obviously wasn't saying any of the countries you outlined were LITERALLY colonies, so don't imply I did. Thanks.
>Russia has been tussling with the West for a prolonged period now. Regardless, they are the second largest exporter of oil to the USA. (1)
Right... their entire economy is based on "extractive economies".
>Canada is an American, Western country. Not sure why they would fall under my reasoning, which was specifically about non-Western countries. The USA is the one usually leading this oil-hungry warring - it’s even a meme at this point.
Again, their economy is based on "extractive economies" - Canada is entirely beholden to exporting natural resources to western nations, and they are one of the so-called "western" countries you claim this doesn't happen to.
>Brazil has various issues, most stemming from external influences corrupting the local political powers. Oil is just one of them, they are also coerced to deforest their country for European exports. (2)
So.... a western nation subjected to systematic extraction?
The idea that strong currency, due to oil exports, kills a manufacturing sector is named the "Dutch Disease" after the Netherlands experience post 1977.
So a country without colonial intervention was still severely harmed. I'd argue similar dynamics apply to resource intensive US states - e.g. West Virginia. The article is largely about how an Iraqi helped Norway avoid the same fate which is really cool.
Certainly over-throwing the Iranian government was terrible. But the key point is that the core economic problem of a resource sector 'crowding out' productive investment is a completely separate issue that occurs frequently in western countries that feature near zero political interference.
I was less trying to make a bumpersticker point and more fishing for interesting perspectives like these to broaden my understanding of complex political/economic issues.
The obvious difference is that Norway fairly compensated the very few assets on the ground owned by foreign parties at the time.
Whereas Iran had massive assets on the ground mostly owned by foreign parties, that were ‘compensated’ at fire sale prices?
Why were foreign assets on-ground in the first place? When is the last time you heard of a Western country having foreign assets extracting value/resources from within their borders?
France state companies suck their Belgian subsidiaries dry. Energy, banks are the two big ones.
They tried the same with KLM, the Dutch airline, with less success.