| ▲ | alephnerd 3 days ago | |
It's called Dutch Disease. And it did severely reduce Netherlands' competitiveness back when the Groningen gas field was operational. Norway is a well off country, but compared to their Scandi peers Denmark and Sweden, they don't have as diversified an economy - especially innovation industries like Pharma in DK or DefenseTech in Sweden - due to their heavy ONG dependency [0]. Denmark is equally blessed with NatGas fields like Netherlands was (look at a map) and similar to Norway, yet they still incubated a domestic innovation industry and additionally retained a diversified manufacturing and agricultural economy. Furthermore, large soverign wealth funds in democracies can become especially enticing to raid during protracted downturns or the rise of populism - look at Alaska's PIF as an example. Additionally, plenty of black swans exist in the world now. The US-EU FTA makes US ONG exports signficantly more cost competitive than Norwegian offerings, and potential FTAs with MERCOSUR (Brazil, Argentina, Uruguay) and Canada can further reduce Norway's staying power in European energy markets. As Norway is not an EU member state, it's in a worse position to defend it's interests in it's largest market. And that's the crux of the argument - Norway is unable to incubate alternative industries that can help diversify away from their ONG dependency, which increases the long term risks for Norway, and has risks that could lead to opportunistic raiding of their SWF. | ||