Why is Norway's sovereign wealth fund so big?
Norway's sovereign wealth fund, the world's largest, was established in the 1990s to invest the surplus revenues of the country's oil and gas sector. To date, the fund has put money in more than 8,500 companies in 70 countries around the world.
The so-called Government Pension Fund Global, the world's largest sovereign wealth fund, said it had a value of 17.7 trillion kroner ($1.6 trillion) at the end of the March.
Norway's Sovereign Wealth Fund
The proceeds from oil would be invested for the future. Norway invested in companies outside Norway, including some real estate such as Regent Street in London. The investment had to meet ethical concerns, meaning Norway has an international clout beyond its small size.
The global investment fund is managed by Norges Bank Investment Management (NBIM), part of the Norwegian Central Bank on the behalf of the Ministry of Finance.
Its success is based on the approach taken by the Norwegian government to manage the country's natural resources and transform them into a long-term investment strategy. As a result, Norway's economy has been able to benefit from the fund's returns, allowing for the creation of a stable economic environment.
While the U.S. as a whole does not have a sovereign wealth fund, several of its states do. These funds, however, are nowhere near as big as the international ones listed above. The largest in the U.S. is the Alaska Permanent Fund Corporation, established in the early 1980s, which has roughly $67 billion in assets.
Some countries may have more than one SWF. Also, while the United States does not have a federal sovereign wealth fund, several of its states have their own SWFs. The list does not include pension funds that do not meet the SWF criteria.
The budgetary rule (Norwegian: handlingsregelen) is a rule concerning the usage of capital gains from The Government Pension Fund - Global of Norway. The rule states that a maximum of 3% of the fund's value should be allocated to the yearly government budget.
The fund is for the citizens of Norway. “The aim of the fund is to ensure responsible and long-term management of revenue from Norway's oil and gas resources, so that this wealth benefits both current and future generations.” Today the fund is worth nearly $275,000 for every citizen of Norway.
The US has been running a budget deficit for a long, long time, so there hasn't been a surplus to put into a wealth fund.
Does Norway get money from the US?
The United States provides no development assistance to Norway.
While public healthcare is available across Norway, it is only free for people 16 years and younger. It also free for pregnant and/or nursing women, regardless of coverage. Everyone else must pay an annual deductible equivalent to an average of 2,040 NOK (222 USD).
The Norwegian government's net cash flow from petroleum sales is transferred into Norway's $1.3 trillion sovereign wealth fund. The government can only spend a small part of the fund each year, but this is still estimated to amount to nearly 20% of the government budget.
Since the discovery of large offshore reserves in the late 1960s, Norway's economic engine has been fueled by oil. As Western Europe's top petroleum producer, the country has benefitted for decades from rising prices.
“We've got electric trains, of course, but rail freight depends on motor vehicles at each end of the track. Without oil, aviation, shipping and road haulage would cease. Global trade would face major difficulties as a result.”
The Norwegian SWF is a petroleum fund, financed by the state's share of oil and gas revenues—officially coined the Government Pension Fund Global—and it has one of the most sophisticated investment strategies and most transparent institutional set-ups among its peers.
Britain did not opt for such a scheme when its North Sea oil boom began in the 1970s. Instead, successive governments used the proceeds from oil and gas fields to keep public borrowing down rather than to build a fighting fund to tackle long-term problems such as our ageing population.
Despite the advantages, SWFs are not without their drawbacks. One concern is the potential for mismanagement and corruption. Poor governance and lack of transparency can lead to funds being misappropriated or invested in risky ventures, resulting in significant financial losses.
China is home to one of the world's largest sovereign funds, China Investment Corporation. CIC's total assets under management reached about $1.24 trillion at the end of 2022, bigger than Saudi Arabia's 2022 GDP (about $1.1 trillion). Saudi Arabia was the 17th largest economy in the world in 2022.
The Texas Permanent School Fund is a sovereign wealth fund which serves to provide revenues for funding of public primary and secondary education in the US state of Texas.
What is the world's largest trust fund?
Norway's sovereign wealth fund, the world's largest, was established in the 1990s to invest the surplus revenues of the country's oil and gas sector. To date, the fund has put money in more than 8,500 companies in 70 countries around the world.
If the beneficiaries are to proceed with a private division, the district court must issue a grant of probate (skifteattest). This certificate gives the beneficiaries the right to dispose of the deceased's property. In a private division, at least one beneficiary must assume liability for the deceased's debts.
In the old days, Norwegians were identified by their Christian name and their father's name, plus the appropriate suffix. For example, Olav Håkonsen meant that this man was the son of Håkon. (The surname might also be spelled "Håkonsson" or "Håkonsøn.") And Sigrid Håkonsdatter was the daughter of Håkon.
Individuals who stay in Norway for more than 183 days during the year in which they move to Norway, will be deemed tax resident from the first day of their stay in Norway.
High Purchasing Power: Since Norwegians enjoy a high wage rate, their purchasing power is high too. They make more wealth on average than Americans and spend much more on their cost as well as standard of living.
