Thursday, May 14, 2009
Resource Blessing
Here's a NYT article sure to drive Nelson crazy with cognitive dissonance: Thriving Norway Provides an Economics Lesson. Discuss amongst yourselves. This is complementary to my resource curse lesson which will be finished tomorrow.
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7 comments:
While the article appeared to be mostly praising Norway's economy, towards the end of the article the author seemed to get a bit ominous towards Norway's future. The author seemed to stress that Norway has a few economic problems that might affect them in the future. The first being the decrease in oil revenues, and the aging population. The true test to see if Norway's economic lesson is good is to see if they can maintain their welfare running state in the next fifteen to twenty years when these problems will probably have an effect on their economy.
I think it would also be rather difficult for the US to duplicate Norway's success in the US. "Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter" and the US is not. I think that Norway's situation may make it economic plan/solution unique to economies that closely resemble its own.
I agree with Ana; Norway is very unique in its situation. It has been blessed with good management and benevolent politicians. However, I fear that eventually, when oil goes by the wayside, Norway will be a bit lost. While it will be better off than the Middle East countries with no sovereign wealth fund or diversified economy, I think that maybe it is depending too much on oil and should start preparing for a day without it.
This whole resource curse is confusing me very much i mean, after all, Norway is doing very well for itself. I mean sure
Mr. Bruum, 32, says he has never had a job, and he admits he is no position to find one. “I don’t blame anyone,” he said. “The Norwegian government has provided for me the best they can.”
I guess it leads to irresponsible spending and
“We have become complacent,” Mr. Mork added. “More and more vacation houses are being built. We have more holidays than most countries and extremely generous benefits and sick leave policies. Some day the dream will end.”
So I eventually the resources run out which could screw over the country because they were not wise enough to prepare for it but it still seems to be good thing. I just don't understand how it can be a curse
Good for Norway, its not often you hear something impressively positive (let alone anything)for the Scandinavian country. Ana and Scott both have the right points highlighted. They all have each other backs. Meaning that their population is all focused on a positive outlook for their country. They don't have thousands of bickering politicians and radio broadcasters. They're pretty much all on the same page which allows for quicker decisions to be made. I think Scott is right in that when oil becomes less abundant, it'll be really tough for Norway to suceed. It's rough terrain isn't great for farming and they are not huge in industry.
Norway is only going to last as long as the demand for oil is there. If it is their main form of income they can not possibly rely on it forever. They need a back up plan but for right now they are doing pretty good. They have a small country and a diverse economy which is good but need to think ahead for the future. It is like selling something a collectable right now for the quick cash but in 10 years it will be worth even more. I dont know if that makes total sense but I see it like that. I agree with Ana that the US can never copy them and I wouldnt want the US to be copying other countries anyways. We are a world trader and try to keep our economy running through other countries too.
I think it is great that the country is doing so well, epecially during a worldwide economic crisis. I agree with Sortwell and Kenny, though, in that once the demand for oil goes away, Norway is headed for some tough times. One good thing for them to invest in would be wind power--they are situated well for wind farms and have the money to research and improve the technology. Who knows--they might become the world's first wind power exporter...
Norway seems to be pretty established; maybe without an oil economy they will not be profiting so much, but I could see them as maintaining economic stability especially considering how they are doing now. When oil is no longer most desired, they will be ahead of other countries economically, and in the meantime they can think of a replacement for oil to drive their economy.
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