“I wish we had found water.”

August 29, 2009 7:43 PM

The Iraqi who saved Norway from oil:requires registration, but it's worth it.

...dependency on natural resources can poison a country’s economic and political system. Inflows of hard currency push up prices, squeezing the competitiveness of non-oil businesses and starving them of capital. As a result, productivity growth withers (a phenomenon known as “Dutch disease” after the negative effects of North Sea gas production on the Netherlands). Meanwhile, the state institutions in charge of oil often become corrupt and evade democratic control. And oil-rich states almost invariably waste the income it brings, many ending their oil booms deeper in debt than when they started.

posted by anotherpanacea (32 comments total)

That's fascinating. My girlfriend is Norwegian and she had never heard of him. We just talked about how useful this could be to counter the right-wing groups who argue that Norway should spend all the oil money and kick out the immigrants. No immigration, no oil money. Heh.

Thanks for this.
posted by knapah at 8:00 PM on August 29

Incidentally, I didn't need to register...
posted by knapah at 8:00 PM on August 29

No registration here either.

What a great story. The other thing about the Norwegian oil fund is that it's arguably the world's largest pool of [genuinely] ethically invested money.

I love Norway so hard. I've fantasised about immigrating for years. My partner doesn't like the cold so much, so I suspect I'm shit out of luck.
posted by smoke at 8:07 PM on August 29

Biggest problem with Norway I've had is the prices. Paying £7 or £8 for a pint of beer terrifies me.
posted by knapah at 8:12 PM on August 29

Biggest problem with Norway I've had is the prices.

In my experience (as a proud part-time citizen of Øst-Trøndelag), you're not supposed to actually buy food and beverages in Norway. Nor drive faster than 80 kph, ever. The natives cross the border when they need cheap food or wants to check if the fourth gear still works.

(I usually buy Norwegian delicacies at the tax-free store at Arlanda. Better value for the money.)
posted by effbot at 8:24 PM on August 29

Thank you for this; it explains a great deal of our handling of the oil.
posted by flippant at 8:47 PM on August 29

(I usually buy Norwegian delicacies at the tax-free store at Arlanda. Better value for the money.)

We have some of that! It is fantastic. My girlfriend got it in an 'aid package' (We're living in England at the minute) from her parents. I wonder if I can get her to open it... mmm.
posted by knapah at 8:49 PM on August 29 [1 favorite has favorites]

"Norway is the only country in the world where the state and the capitalistic entities work together as partners, and the co-operation works, really works," says al-Kasim. Paradoxically, state involvement makes this easier.

Reminds me of when an exhausted Swedish trade minister negotiating a potential telecom merger quipped that Norway was obviously "the last surviving Soviet state" (not really an optimal negotiation tactic).

And somewhat related to that, the current right-of-center Swedish minister of foreign affairs reflects over Norway's use of oil money in a blog post from 2005:

"Today's edition of Stavanger Aftenblad - the local newspaper in Norway's oil capital - had a first page headline saying that "Norway risks drowning in money". [...] ... reading the election promises of the Labour Party, it is difficult not to notice the similarities in philosophy to some of the things we are now hearing coming out of Putin's Russia in these respects. State capital. State control. State ownership. This is certainly not the wave of the future. It's rather the words from those that can afford to ignore the future."

I did mention that he's quite a bit more rightwing than your typical Swedish politician, right?

(And I'm not fully up to date on Norwegian politics, so I don't know what happened to the public spending after the election he mention in that post.)

(It should also be mentioned that historically, the state/capitalism partnership model has to some extent been a part of the "Nordic model" also outside Norway, but a deeper analysis of that would be a bit of a derail, perhaps.)
posted by effbot at 8:59 PM on August 29

I haven't read the article yet, but just wanted to say that I didn't need to register (generally they let you read five articles pre-registration per day).

However, if it does pop up with Registration Required, if you change the false in the link to true, delete &_i_referer and everything after it, you can bypass registration. I garnered this info from Bugmenot, and it's always worked for me.
posted by djgh at 9:06 PM on August 29 [2 favorites has favorites]

And by link, I meant URL

Very interesting. It's a bit messed up when the average extraction rate is 25% though, so all credit to Norway. And an interesting rebuttal to the idea that unfettered competition always creates innovation, suggesting as it does that if the oil companies had been allowed free rein without the interference of the state, Norway would not be in such a strong position regarding technical stuff related to oil extraction.
posted by djgh at 9:19 PM on August 29

The depressing thing is that if this story was in New Zealand we'd have elected our Muldoon, Bolger, or Key government, who would have disbursed the investment fund, given everyone a one-time cheque, and trashed all the hard work.

*sigh*
posted by rodgerd at 9:56 PM on August 29

In some contexts I've seen it referred to as "the curse of oil".
posted by Chocolate Pickle at 12:13 AM on August 30

I just married a Norwegian. I guess I could become a citizen there and collect oil money. Thanks for the tips. My USA friends are already asking me for chocolates from Norway, I'll be off to visit the tax free store if I can save up enough to go there next week!!!
posted by lee at 12:16 AM on August 30 [1 favorite has favorites]

Biggest problem with Norway I've had is the prices. Paying £7 or £8 for a pint of beer terrifies me.

Sorry for slight derail, but if you are earning Norwegian wages is this really a drama? I see the same argument used by Australians about the UK, but when you are here earning the pounds, the purchasing parity (is that the right term?) means it is not really that expensive.

I oh so briefly looked at moving to Norway (another Norway-lover here). Their immigration rules are very strict, and they don't allow for dual citizenship - I would have to renounce my other citizenships if I was ever accepted into Norway.
posted by Megami at 1:48 AM on August 30

If you marry, you can have dual citizenship. My Norwegian wife told me this.
posted by lee at 2:09 AM on August 30

Paying £7 or £8 for a pint of beer terrifies me.

The cheapest beer in Oslo is served at Warwawa Sportsbar, next to the Central Station: 34 kroner (£3.50) for 0,5 litre. The most expensive beer in Oslo costs 86.25 kroner (£8.80) for 0,5 L. Skål!
posted by iviken at 2:39 AM on August 30 [1 favorite has favorites]

Lucky you Lee!
posted by Megami at 2:59 AM on August 30

Wow thanks for that article, I had no idea, as an eighties kid you generally are left with the impression that the grand old people of the labour party fixed everything for you in Norway during the 60ies and 70ies, the legendary dugnad era of nation-building.

Before that you had the era of heroic polar explorers, if they weren't out conquering a pole or skiing across Greenland over the weekend, they either peacefully tricked their way out of unions with the Swedes or sat on cafes writing legendary plays on women's rights.

So this is my impression of my recent national history: My grand-grandfathers conquered the Arctics, and then there was some kind of a war (maybe two?), not much is known about this since the Germans kicked our arse quickly and swiftly and in frustration we further kicked the Jews, so everybody tries to forget it, and after that the sensible kids of those polar explorers used the oil to built the world's most perfect rich stable social democracy where everyone is equal and you can become anything you want, (but careful! don't get better than anyone else!) and my parents raised me while the nation raised their class, and I'm just playing video games and watching MTV (and WOHAA what's this, Internet?) and not really being all that great but that's OK since every generation before me was great, all of them all the time, so it's ok to be goofing around on your own, but here's (SMACK!) an inferior complex for you to go with that.

It is a relief to learn that My Greatest Nation-Building Forefathers sometimes actually outsourced their awesome nation-building.
posted by gmm at 3:06 AM on August 30 [5 favorites has favorites]

Thanks for the post, anotherpanacea. It is an interesting article I would have otherwise missed.

Not to derail, but I think that taken out of the context of Nordic politics, effbot's comment above could be misleading. The current Swedish coalition government is right-of-center on the Scandinavian political map (where the center line is roughly between socialists and non-socialists). Carl Bildt, the godfather of the modern Moderate party, former prime minister, and current foreign minister, is a buttoned-down pragmatist that seems to have more politically in common with Tony Blair or Bill Clinton than Margaret Thatcher or George W. Bush. Allowing private competition with former state monopoly businesses and reducing some property taxes are about as far right as Sweden has gone since the "right-of-center" victory in the 2006 election. While elimination of universal single-payer health care was part of the party platform of the Moderates last I looked, I don't think many Swedish politicians of any stripe currently see a winning strategy in eliminating universal health care or the numerous "welfare" programs available to legal residents.

That said, in this age of trillion dollar corporate bailouts by government, the Swedish governing coalition has been commendably conservative with its taxpayers' money.
posted by McGuillicuddy at 3:27 AM on August 30 [1 favorite has favorites]

When I was growing up, Norwegian jokes were common in Sweden (roughly equivalent to - warning: offensive terms ahead - polack jokes). Unlike the jokes, what is actually funny, is to see Norway do much better than Sweden - guess whom the joke is on. He laughs best who laughs last.
posted by VikingSword at 4:38 AM on August 30

effbot: In my experience (as a proud part-time citizen of Øst-Trøndelag), you're not supposed to actually buy food and beverages in Norway. Nor drive faster than 80 kph, ever. The natives cross the border when they need cheap food or wants to check if the fourth gear still works.

The Norwegians go to Sweden to shop, the Swedes go to Denmark, the Danes go to Germany, and many Germans go to the Netherlands. I've always wondered how happy a Norwegian holidaying in the Netherlands might be.
posted by Brother Dysk at 5:10 AM on August 30 [1 favorite has favorites]

Sorry for slight derail, but if you are earning Norwegian wages is this really a drama? I see the same argument used by Australians about the UK, but when you are here earning the pounds, the purchasing parity (is that the right term?) means it is not really that expensive.

Oh yes, sure. It was just horrible going there with GBP in my pocket, and wonderful for her coming to the UK with NOK.

The cheapest beer in Oslo is served at Warwawa Sportsbar, next to the Central Station: 34 kroner (£3.50) for 0,5 litre. The most expensive beer in Oslo costs 86.25 kroner (£8.80) for 0,5 L. Skål!

Good to know! Sláinte!
posted by knapah at 6:24 AM on August 30

Beyond that limited circle, however, he is virtually unknown.

I'll say. Other than the tragedy of the North Sea divers, I don't know much about the early years of the "oil adventure". I'll be sure to tell al-Kasim's story to friends and family; he deserves it. Thank you for the fascinating link, anotherpanacea!

Regarding dual citizenship, you are required to renounce your other citizenship if you want to become Norwegian, though there are exemptions. Being married doesn't seem like one, though.
posted by Bukvoed at 6:46 AM on August 30

Megami: Sorry for slight derail, but if you are earning Norwegian wages is this really a drama? I see the same argument used by Australians about the UK, but when you are here earning the pounds, the purchasing parity (is that the right term?) means it is not really that expensive.

Beer is still stupidly expensive in Norway. It's true that Norwegian wages are quite high, but then so is the Norwegian tax level. Denmark has similarly high wages and taxation, and yet a beer in a supermarket in Denmark typically costs a few kroner, whereas in Norway you're looking at fifteen to twenty kroner. The price disparity isn't as big in pubs (a draught beer probably costs just over half to two-thirds the Norwegian price, on average), but it is seven to ten times more expensive in shops.
posted by Brother Dysk at 6:47 AM on August 30

Oh, and that's before you get to the fact that Norwegian law mandates anything over a certain percentage (is it 6.5% ABV? I'm not sure) can only be sold in a chain of state-controlled shops appropriately named 'Vinmonopolet' (The Wine Monopoly). You're better off not knowing what stuff costs there.
posted by Brother Dysk at 6:50 AM on August 30

Thanks for that article, 'panacea. I have Ghanaian friends who are concerned about heir country's recent oil discoveries and don't want to see things go the way of neighboring petrol-State, Nigeria.

He's a public-policy guy on both sides of the Atlantic. I hope that he might find something in the article that might help things back home.
posted by vhsiv at 7:26 AM on August 30

This pretty much explains Alberta.
posted by sixswitch at 7:34 AM on August 30 [1 favorite has favorites]

What a great example of a parent sacrificing for their kid: going from 5th-in-command in the budding Iraqi oil industry to unemployed for the sake of medical care for his son.
posted by msittig at 7:47 AM on August 30

This, then, is a striking case of strong state regulation ultimately benefiting the private sector.

And to an even greater extent ultimately benefiting the society that the government represents. It’s something that I’d really like to understand better about economics: In some sense, it seems like an unregulated market just isn’t all that friendly to innovation, and yet when they are forced into this innovation it opens vast new markets. Corporations that do invest in fundamental research (IBM Watson Labs, Bell Labs) have created whole new industries. But Watson’s commitment to R&D in the 1930s almost got him fired by IBM’s board of directors, and the company probably would have gone under without the demand created by the Social Security Act. And Bell Labs has withered with communications industry deregulation.

Another example of strong regulation spurring technological development is California’s (and more specifically, the South Coast Air Quality Management District’s) regulation of vehicle emission and of paint and solvents. In both cases the private sector fought tooth and nail against the regulation, and claimed that the regulation would create inferior products. But cleaner cars apparently didn’t automatically mean slower cars. And water-based paints and solvents are actually pretty good. Thanks, California!
posted by Killick at 8:21 AM on August 30

"ut Watson’s commitment to R&D in the 1930s almost got him fired by IBM’s board of directors, and the company probably would have gone under without the demand created by the Social Security Act. And Bell Labs has withered with communications industry deregulation. "

The people using the Bell Labs name aren't actually doing basic research anymore instead the focus is on marketable applied research.
posted by Mitheral at 3:09 PM on August 30

The humility al-Kasim displays is incredible...
“Not everything in life has been good – but things have mostly come in a fortunate order. It’s got nothing to do with skill, it’s simply luck. Like the idea to drop by the Department of Industry … it was just because I am the kind of person who hates waiting.”

This guy did something that I consider to be damn near the hardest thing a person can do- he created a lasting, effective institution in a democratic society.

I would have loved to have been a fly on the wall during the 1971 retreat where he and a colleague wrote the blueprint that created the Norwegian Petroleum Directorate. The world needs more bureaucrats like al-Kasim who have the foresight govern in a way that works.
posted by nowoutside at 8:00 PM on August 30

The depressing thing is that if this story was in New Zealand we'd have elected our Muldoon, Bolger, or Key government, who would have disbursed the investment fund, given everyone a one-time cheque, and trashed all the hard work.

This sounds like Alberta. People here will often carp that oil and gas royalties feed the so-called Heritage Fund, but of all the petro-state sovereign wealth funds, it is the least funded. Yeah, the Nigerians handle their oil revenues better. Oil and gas revenues are used for operating budgets and when the prices go down, whoa, big deficits!

Great article!
posted by bumpkin at 8:32 PM on August 31