“Mr. Ambassador, Norway is facing challenges and her strategic priorities and international policy has to change. You know, what is happening in Europe now and in the world economy, keeps us awake at night,” he said chuckling.
The Ambassador could see he was serious.
“The senior people in Government has given us -political advisers – the task of thinking new and coming up with ideas,” he continued.
The Ambassador nodded.
“The oil price, which is like our bread and butter, is now stuck at $50 and the prospects for price rises are distant.”
“Yes, it’s quite a situation,” the Ambassador interjected him.
“If I recall the price was $100 per barrel one year ago,” the Ambassador added, looking concerned.
“And this is affecting our budget- actually severely,” Oddvar said.
“And with our birth rate so low, there is not enough new babies to finance our welfare state,” Oddvar said laughing. The Ambassador laughed too.
“Another thing, Ambassador, is how Russia is causing insecurity for us. Remember they annexed Crimea and then embarked on a policy to destabilize Ukraine. We all thought, something would have been done by now”, Oddvar said exasperated.
“I do recall at the time, there were many who warned that Europe faces a war if the Russians were not checked,” the Ambassador said.
“The whole thing is a mess. Even the sanctions imposed on Russia is not halting their aggression,” added Oddvar.
Oddvar was very frank and admitted that the The Natives Government had gotten into power by promising the welfare state would be maintained. Life would be the same, despite the seeming economic dark clouds. Despite the fall in oil prices, the oil fund would ensure prosperity for all.
The reality however was different.
The growth in the oil fund depends on returns from the markets. When the stock markets are not doing well, the oil fund does not grow.
Corporation taxes were low and with unemployment rising, there was less tax revenues for the Government. It has therefore become necessary to finance an increasingly large part of Government expenditure from the fund, rather than from taxes. Since the price of oil was so low and the stock markets were performing poorly, it was only a matter of time before the fund is depleted.
Something had to be done. Most experts agree that if something is not done by 2025, the country could face serious financial hardship.
“If we have to stay in power, we need to deliver prosperity, create jobs, and keep the welfare state,” Oddvar said.
“Our task, as political advisers is to make the policies for the politicians, and then we have to do the work to get it implemented,” he added.
The Ambassador was quite impressed but somewhat cautious. He continued listening to Oddvar.
“Ambassador, we do not see our future entirely in Europe but more towards Africa and the US. Asia is China’s backyard and we cannot have any meaningful influence there,” he said.
“Africa is more a priority for us. I give you an example. Just recently, a major US oil company had made a bid for 12% of Nor oil, the State Oil Company. We supported it; the other political parties and members of the major Unions did not. One newspaper made an opinion poll and the results were also showing the majority of Norwegians did not support it either – that an American company having such a stake in the national treasure”.
“But we were in favour of this!” Oddvar made clear. “What the public did not know, is that we could get an opportunity to obtain lucrative oil drilling rights in three African countries through this American company.”
The Diplomat Copyright Francis Stevens George