Archive - Jul 29, 2009
In Norway, It Pays to be Boring
"Unlike almost every other country in the West," reports NPR "Norway remains relatively unscathed by the worst financial crisis in decades."
How did they do it?
NPR interviewed Amund Utne, the head of Norway's Finance Ministry, who chalks up Norway's current stability to a conservative saving policy. By only spending 4 percent of its oil income annually, Norway was able to save large amounts of money for the proverbial "rainy day fund." That rainy day arrived, and Norway is basking in the glow of its more conservative foresight.
We feel we're in an extremely strong situation because 80 percent of our activity is based in Norway," [Utne] says. "And the Norwegian economy is solid — in oil and gas, in seafood, in shipping."
NPR reports that many Norwegians haven't changed their spending habits. And because its banks didn't offer many of the newfangled financial products that ultimately got U.S. and some European banks in trouble, the government isn't contemplating any bailouts.
Of the country's staid banking system, Utne says, "In this situation, it may be good to be somewhat boring."
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