Why is Norway a Rich Country?

If we ask, “Which country has the highest level of welfare and the lowest crime rate?”, everyone will undoubtedly think of Norway. The main reason why this country is remembered with these adjectives is the richness of its economy. Norway is one of the countries with the strongest economies in the world.

Norway has a population of approximately 5 million (2023) and a national income of 546.77 billion dollars (2023). It is also a country that ranks 4th in the world with a per capita national income of $99,266 in 2023. Alright, Why is Norway so rich, what is the source of income, what is produced in Norway? Let’s examine the answers to these frequently asked questions, starting from its history.

Let’s take a look at the history of the Kingdom of Norway

If we ask, “Where is the homeland of the Vikings?”, the northern countries immediately come to your mind, right? One of these countries is Norway, officially known as the Kingdom of Norway. In fact, the first human traces in Norway date back to B.C. It dates back to 10,000 years ago. The real history of the country dates back to the 8th and 11th centuries. It was home to the Vikings It starts with being. Vikings ruled these lands until Christianity spread in Norway.

In the 9th century AD, large and small kingdoms began to form in Norwegian lands. Harald I, the first king of Norway, managed to gather these scattered kingdoms under one roof. The Kingdom of Norway united with Sweden and Denmark after 1397. By the 15th century, these countries were the most important power in Europe. Kalmar Union they created.

Later, with the separation of Sweden, Denmark and Norway continued their union as two countries until 1814. During the Napoleonic Wars, Denmark sided with France, but when France lost the war, they signed the Treaty of Kiel. With this treaty, Norway was left to the administration of Sweden.

The Norwegian people never wanted Swedish rule.

They won their struggle to gain their independence on June 7, 1905 and Sweden thus recognized Norway’s independence. A vote was held on November 12, 1905, and the country’s government was accepted as a monarchy. II. When World War II approached, Norway chose to remain neutral. However, he did not hide his support for England.

After Germany invaded Norway in 1940, King Haakon fled to England and stayed there until 1945. II. When World War ended Norway has had a very strong century economically with the support of England and the USA.

So how did Norway become a rich country?

We can say that the growth of the Norwegian economy started from the times of the Industrial Revolution. Before the Industrial Revolution Norwegian economy It was based on agriculture and fishing. By the 19th century, textile factories began to be established in Norway under the influence of the Industrial Revolution. As you can imagine, with industrialization, problems such as private property, workers’ rights and state intervention in all areas emerged.

II. Norwegian Labor Party after World War II; He has organized reforms on issues such as balancing income distribution, ending poverty in the country, pension regulations and ensuring that all Norwegians benefit from social services. Well It was aimed to place the country’s capital in public trust. we can say. The development and continuation of these policies makes Norway today Countries with the strongest economies in the world moves to the list.

The fact that Norway is a rich country depends on its possession of important natural resources, especially oil. Even so Norway’s main source of income is oil. Later, having a safe and stable political structure, open economy and qualified workforce made Norway a rich country.

At the same time service industry has made significant contributions to the country’s economy. Almost 60% of Norway’s national income comes from the service sector. In particular, maritime activities, finance and banking contribute greatly to the Norwegian economy. Now let’s examine the developments that contribute to the growth of the Norwegian economy.

Their perspectives on oil, which constitutes the main source of income for the Norwegian economy, are quite different.

Oil discovered during fishing activities in the North Sea in 1969 was a great opportunity for Norway. In the 1980s, they started to process the oil they discovered as crude oil. You’re thinking, “Oil was discovered and the country suddenly became rich,” right? Actually no, quite the opposite policies were implemented. After oil was discovered, the state ensured that people used this oil equally and instead of getting rich suddenly, He preferred to gradually enrich himself in a healthy way.

In addition to these policies The state-controlled “Statoil” oil company was established. When a country established its own oil company and gave almost all of its drilling permits to its own company, this meant that all revenues would remain with Norway. Not only that, revenue was generated by applying a corporate tax of around 70% to foreign oil companies existing in the country.

In short, the main reason why so much profit is made from oil is that Norway is to extract oil in a sustainable manner. In other words, they do not extract all the crude oil and sell it at once to generate income. They aim to prevent the volatile prices of oil from harming the Norwegian economy.

How does Norway evaluate its income from oil?: “Norwegian Wealth Fund”

Today, Norway meets 2% of the global need for crude oil. However, Norway realized very early that depending on the income from oil exports could create problems for the coming years. With the revenues obtained from oil and natural gas production since 1990, Norwegian Wealth Fund established. With this fund, Norway invests in foreign countries’ stocks, bonds and real estate markets and earns incredible profits.

If you ask, “Who uses the profits?”, the state uses a very small part of these profits. The rest is used as an investment tool for future generations. Today The Norwegian Wealth Fund is worth more than $1.5 trillion.

If you want to follow the money accumulation in the Norwegian Wealth Fund live, you can click here.

Workforce and education level

Throughout history, the level of education has always been at the forefront in Northern countries. The importance of educational attainment in advancing economic growth in Norway is better understood. In this way, awareness in production and resource use has improved greatly. We can understand this situation by comparing the oil-rich countries in the Middle East with the oil-rich Norway in Europe.

Norway’s geographical location and maritime activities

Norway is a country with the largest coastline in Europe. Thanks to its geographical location, Norway, like other Northern countries, has developed in maritime activities. Even Norway is the world’s second largest seafood producer. This means that the majority of seafood consumed worldwide comes from Norway.

The secret of this success is not only the geographical location but also fishing is a way of life. Norway has more than 6 thousand fishing vessels and more than 800 facilities.

We talked about the developing economic wealth of Norway, which is the leading country among the Northern European countries and was home to the Vikings, over the years. Why Norway is so rich We analyzed everything from oil policies to geographical location effects. You can leave any information you want to add about Norway in the comments.

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