Norway is one of the few places on Earth where the government is planning for the financial future of its citizens. Norway was dirt poor before petroleum was discovered in the late 1960s, and the Norweigians know the value of a buck, or krone, as the case may be.
The CIA describes the Norwegian economy as follows:
"The Norwegian economy is a prosperous bastion of welfare capitalism, featuring a combination of free market activity and government intervention. The government controls key areas, such as the vital petroleum sector (through large-scale state enterprises). The country is richly endowed with natural resources - petroleum, hydropower, fish, forests, and minerals and is highly dependent on its oil production and international oil prices, with oil and gas accounting for one-third of exports. Only Saudi Arabia and Russia export more oil than Norway. Norway opted to stay out of the EU during a referendum in November 1994; nonetheless, it contributes sizably to the EU budget. The government has moved ahead with privatization. With arguably the highest quality of life worldwide, Norwegians still worry about that time in the next two decades when the oil and gas will begin to run out. Accordingly, Norway has been saving its oil-boosted budget surpluses in a Government Petroleum Fund, which is invested abroad and now is valued at more than $150 billion. After lackluster growth of 1% in 2002 and 0.5% in 2003, GDP growth picked up to 3.3% in 2004."
Of particular note is that the current government, although "a bastion of welfare capitalism" is currently run by a centre right government. I would guess what the CIA means by "a bastion of welfare capitalism" is that significant resources are devoted to keeping Norwegians out of poverty - resulting in Norway's #1 ranking by the United Nations' Human Development Report which ranks 173 countries for their quality of life, and that Norway, after its occupation in WWII, established itself as an egalitarian society. This is being chipped away at though, as "the government has moved ahead with privatization." History would bear that Norway is moving backward and not ahead as they privatize.
Norway has established a national savings called the Petroleum Fund. Wikipedia describes it as follows:
"The Petroleum Fund of Norway (see link to right labelled "10 - Petroleum Fund") is a government controlled fund owned by the people of Norway. Also called The Petroleum Fund.
The purpose of the fund is to invest parts of the large surplus generated by the Norwegian petroleum sector (mainly taxes of companies, but also payment for license to explore). It is predicted that revenues from the petroleum sector have reached their peak and will decline significantly over the next couple of decades.
(editorial note - with petroleum prices on the rise, this is proving debatable) The Petroleum Fund was established in 1990 after a decision by the Norwegian Parliament to counter the effects of the forthcoming decline in income and to smooth out the disrupting effects of highly fluctuating oil prices.
The fund is administred by the Norwegian Central Bank. It reached a portfolio value of over NOK 1 trillion ($170 billion) in the first quarter of 2005.
Since 1998 the fund was allowed to invest up to 50% of its portfolio in the international stock market.
Debate
Due to the large size of the fund relative to the low number of people living in Norway (4.5 million people), the Petroleum Fund has become a hot political issue. The three major themes of discussion are:
If one should use more of the current oil revenues to solve current problems instead of putting the wealth into financial "gambling" through The Petroleum fund.
Con: No one shouldn't, investing money from outside the regular economy will drive inflation.
Pro: Yes one should, it will not affect the inflation if one invests in the right places.
If the high exposure (around 40% in 2003) to the highly fluctuating stock market is financially safe.
Con: Banks are safer
Pro: Evidence show that stocks generate more value over time than money.
If the investment policy of The Petroleum Fund is ethical.
Con: It is not possible to control.
Pro: It is possible to control.
Part of the investment policy debate are related to the discovery of several cases of investment by The Petroleum Fund in highly controversial companies, involved in businesses such as arms production and tobacco. The Petroleum Fund’s Advisory Council on Ethics was established 19th November 2004 by Royal Decree. Accordingly, the Ministry of Finance issued a new regulation on the management of the Government Petroleum Fund which also includes ethical guidelines."
The investment of this money, in being subject to politics in Norway and the Norwegian democracy being a robust one with many parties that reflects the will of the majority of Norwegians, is debated and invested as the majority of the population wishes. Now there's democracy in action. The reason this is one of my top ten items is because I think it’s very cool that this money wasn’t spent by the government on handouts to the rich or on secret no-bid contracts to ex-employers of prominent politicians.