viernes, 21 de junio de 2013

The Norwegian success

In an earlier post, I wrote about "Why Sweden had a mild crisis". Well, the Norwegian economic situation is even better. Norway is another well managed Nordic country that has escaped from the last Economic downturn. 

The discovery of oil in 1969 turned Norway into Europe´s biggest economic success story, combining Middle East oil wealth with a generous welfare model. Norway is the world’s eighth-largest oil exporter. The article On Norway: sitting on too much money  describes how per capita GDP has exceeded $100,000  and that it is common for Norwegians living in Oslo to start the weekend on Thursday.

Nevertheless, this success is bringing along some challenges. In the labor market,  a full employment situation is driving costs up. Since 2000 wage costs are up 63%, 6 times more than Sweden.

There is a significant skill shortage in certain areas that is likely to increase in the future. The egalitarian wage distribution pays low-skilled workers well above the European average but pays the higher-skilled at, or even a touch below, international norms. This results in difficulties in attracting high skilled workers, such as engineers.

Politicians are aware of these challenges, so I am optimistic Norway will continue to be an economic success story and a model of the Nordic social values.

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