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95% of that is put into the Government Pension Fund Global (colloquially the Oil Fund) which, contrary to its name, is not used for pensions. It just sits there
by tormeh 12y ago
95% of that is put into the Government Pension Fund Global (colloquially the Oil Fund) which, contrary to its name, is not used for pensions. It just sits there, and together with the actual Norwegian pension fund it's the largest sovereign fund in the world. The Oil Fund holds 857.1 billion USD. The reason for the arrangement is to control inflation and avoid the dutch disease.
Norway is not Saudi Arabia, in other words. The part that worries me is not oil's contribution to the government balance, but its outsized share of private enterprise, especially technology.
- seizethecheese 12y ago4% of the entire fund gets paid out each year. Nobody claims that the Harvard endowment isn't a boon to Harvard just because they stick most of their large donations there instead of spending them immediately.
- tormeh 12y agoBut that's financial* income. I interpreted the parent as implying that the reason taxes are so low is because of oil, which is not necessarily true, and at least harder to prove than you would think. *The fund is composed of 60% global shares, 35% bonds and 5% real estate. Live(!) valuation here: http://www.nbim.no/en/ http://www.nbim.no/en/
- tempestn 12y agoIf I strike oil and make a million dollars, then put that money into bonds, I wouldn't say the income I get from the bonds is "bond money" rather than "oil money". That said, I certainly agree that wise application of that oil income has as much of an impact on the country's financial well-being as the income itself.