Why Africa won't be the new Norway
Norway, the world's third largest oil exporter, passively invests a large portion of proceeds into a national pension fund. "The future-generations fund," which is now worth $300 billion, invests into foreign assets only as a way to remove the temptation for politicians to spend money on pork-barrel projects. Can oil-rich African countries follow the Scandinavian path or are they destined to suffer under the resource course?
John Ghazvinian, the author of "Untapped: The Scramble for Africa's Oil," is pessimistic: "Between 1970 and 1993, countries without oil saw their economies grow four times faster than those of countries with oil."
Comments (5)
Bookmark
E-mail
Facebook
Even if Africa tried to replicate the Norwegian system, they won't "be the new Norway" for one simple reason: climate.
Posted by: pablo | Nov 5, 2007 7:04:44 PM
Land ownership is a thorny issue in most African countries,a piece of land with some minerals in it will cause ripples especilly if a country is multi ethnic.A manipulated federalist system,be it of any type(economic or otherwise) & bad governance will continue to weaken the economies of most mineral rich African countries.If something is not done soon & I mean as eary as yesterday, then 'Africa wont be the new Norway'.
Posted by: wanjue | Nov 6, 2007 2:28:18 AM
africa compared to norway? not a relevant comparison. perhaps we could compare nigeria to norway; or perhaps south africa could be compared to norway. what a wrong-headed approach to lump the peoples of the african continent into a one-size-fits-all scheme. when development begins to understand that specific peoples in specific cultures need tailored assistance, then there will be improvement. governance in congo will not be impacted by oprah's billions in durban.
Posted by: spook | Nov 6, 2007 5:27:19 PM
It has been manifested by countries such as Japan and Switzerland on the one hand and Nigeria and Sierraleone on the other that natural resource endowments are not prerequisites to development and prosperity. The common denominator of most developed countries today are good political and economic governance over a sustained period of time. Norway's exemplary management of its oil revenues are premised on a solid foundation of sound political and economic governance. African countries that have recently demonstrated impressive performance have shown commitment in implementing the right policies for the wellbeing of their people. Thus the lesson is that, sound governance practices, particularly in combination with resource endowments will lead to prosperity.
Posted by: Alagi B. Gaye | Nov 8, 2007 11:16:33 AM
It is not relevant to compare Africa to Norway, but it is relevant to ask why, of all the oil exporting nations in Africa, none have chosen to reserve some share of income for future generations. Especially with oil prices at record levels, it seems hard to believe none can afford it. Poor governance? Maybe. But in some ways, it is easier to come to such decisions in a centralized government with power concentrated in the hands of few than it is in a multiparty democracy. So the quesion becomes, why don't African leaders decide in favor of this--even when pushed by the donor community (e.g. Chad).
Posted by: Jeff Barnes | Nov 18, 2007 9:53:46 PM