(StatoilHydro's deep sea extraction simulator)The Norweigian economy centers on one main export, oil. Their coastal shelf is full of it and the state owned oil company StatoilHydro collects more revenue than Exxon, yet due to taxes (a 78% rate) StatoilHydro has a slightly lower net profit. StatoilHydro also has some of the best technology in terms of deep sea drilling.
The state has set aside a sort of annunity fund (now over 200 billion dollars) that will keep their society wealthy into the next generation. They have not played the same cards as Dubai, which now has the worlds largest hotel, with the worlds most vacancies.
The sole negative anyone can see from the Norweigian model, is the infamous Dutch disease; The theory is that an increase in revenues from natural resources will deindustrialise a nation’s economy by raising the exchange rate, which makes the manufacturing sector less competitive and public services entangled with business interests (wikipedia). Basically; too much focus on one aspect of the economy can inflate prices and leave a country, in this case Norway without any non-oil related skills when the oil runs out.
Only time will tell what happens with Norway, but with 200 billion in the bank and only 5 million citizens, thinks as looking up. Being an American and studying here has made me realize, we could never copy this model (we are far too large) however there is something to learn.....Running a trade defecit is not a good thing, and the U.S.A. needs to start opening its mind to letting new businesses (started by natives or foriengers) open and expand more easily rather than give old dogs like GM and Chrysler a bone.
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