Insight - End of oil boom threatens Norway's welfare model
(Reuters) - Norway's energy boom is tailing off years ahead of expectations, exposing an economy unprepared for life after oil and threatening the long-term viability of the world's most generous welfare model.
High spending within the sector has pushed up wages and other costs to unsustainable levels, not just for the oil and gas industry but for all sectors, and that is now acting as a drag on further energy investment. Norwegian firms outside oil have struggled to pick up the slack in what has been, for at least a decade, almost a single-track economy.
How Norway handles this "curse of oil" - huge wealth that bring unhealthy dependency in its train - may hold lessons across the North Sea in Scotland, which votes on independence from the United Kingdom later this year, relying at least in part on what it sees as its oil revenues.
Norway had the foresight to put aside a massive $860 billion (507.02 billion pounds) rainy-day cash pile, or $170,000 per man, woman and child. It also has huge budget surpluses, a top-notch AAA credit rating and low unemployment, so tangible decline is not imminent.
http://uk.reuters.com/article/2014/05/08/uk-norway-economy-insight-idUKKBN0DO07520140508
= new reply since forum marked as read
