Norway is highly affluent.
The Nordic country of Norway is located in the western part of Scandinavia, bordered by Sweden to the east, the Atlantic Ocean to the west, and Finland or Russia to the northeast, with an area of 38It is 50,000 square kilometers and has a population of 5.08 million. One-third of the country's land area is located in the Arctic Circle, and plateaus, mountains, and glaciers account for more than two-thirds of the entire territory. Although the area is large, there is not much agricultural land suitable for farming, and most of the food demand depends on imports, which is also the reason for Norway's low population density, which objectively cannot feed so many people. Although Germanic immigrants have multiplied in Norway for thousands of years, due to the poor overall living conditions, the main reason is that they cannot produce so much food, and the population is difficult to thrive. Ninety-seven per cent of the population of Norwegian nationality is Germanic, which is larger than the Germanic population in Germany.
Due to glacial erosion, the coast of Norway is highly tortuous and forms numerous bays, which are natural harbors that became a pirate haunt in ancient times and are now tourist resorts or harbors. The tourism industry in developed countries is very developed, regardless of the country in the world, there are always so many natural or man-made tourist attractions, which is the development of the tourism market demand in developed countries, the development of potential tourism resources is more comprehensive.
Norway has abundant water resources, most of the available part has been utilized, in addition to meeting daily life, industrial production, there is a surplus, can develop high energy consumption of non-ferrous metal smelting industry, become the largest producer and exporter of aluminum in Europe, magnesium production ranks second in the world, silicon and iron production is also large.
Norway has large areas of subarctic coniferous forests, which are rich in forest resources, and can be used to develop the wood processing industry or the paper industry. The sea area is vast, and the northern coast is a world-famous fishing ground, rich in fishery resources, which can be processed in large quantities for export, which is Norway's main agricultural resource. Norway, with a Germanic population, also has a well-developed machinery industry. Sea transportation is convenient, ocean transportation is very important, there is a traditional shipbuilding industry, and the modern Norwegian shipbuilding industry is still developed.
Norway is a high-welfare state, which may be related to the relatively homogeneous composition of the Norwegian population, and the singular ethnic composition means that the population has less differences in natural traits, which can reduce the potential harm of high welfare. For the same ethnic population, people are also more generous, willing to accept high taxes, and willing to let low-income people get more benefits. A high-welfare situation can build a very harmonious society, which may be slightly harmful to economic development, but it is not large and acceptable.
In 2013, Norway's per capita nominal GDP was US$100,579, which was lower than Luxembourg's per capita GDP at the exchange rate of 112473 US dollar, but significantly higher than that of other Nordic countries Denmark (US$59,129 per capita in 2013), Finland (US$49,055 per capita) and Sweden (US$58,014 per capita). The difference of $40,000 in nominal GDP per capita between Norway and other Nordic countries is more than two-thirds higher than that of other Nordic countries. It is also unusual to have the same magnitude of differences compared to Germany ($44,999 per capita) and Austria ($49,039 per capita) with Germanic populations. What caused Norway to become unusual?Norway's main industries have already been stated, including hydropower, smelting, machinery, shipbuilding, timber, papermaking, fishing, etc., all of which are important or advantageous industries in Norway. Are these industries the ones that have made Norway unusually rich?It is estimated that it can only be a partial or secondary cause. The real factor that makes Norway exceptionally rich is the abundance of oil in the Norwegian seas, Norway is the most oil-producing country in Europe per capita, and it is one of the few countries in the developed world that is particularly rich because of the oil factor. The example of Norway shows that oil can enrich not only developing countries, but also developed countries, which is indeed one of the few examples.
The Netherlands is also rich in oil, and there is a "Dutch disease" in economics, to the effect that oil production leads to a rapid increase in foreign exchange, leading to a rapid appreciation of the national currency, leading to a large increase in the cost of other industries in the country, resulting in a lack of competitiveness in these industries, which in turn leads to the gradual closure of enterprises, leading to an increase in unemployment. In the early days of Norway's oil abundance, it is conceivable that Norway should also have a situation similar to "Dutch disease". However, this "Dutch disease" is temporary, and after a period of time, other industries will gradually adapt to the new situation of currency appreciation, various situations will gradually improve, the employment rate will return to normal levels, the "Dutch disease" will disappear, and the per capita nominal GDP will increase substantially.
Norway produces 1 oil per year400 million tons, slightly less than Chinese mainland, per capita production is very large. The cost of oil production in Norway is relatively high, which is not the same as oil production in the Middle East. It is estimated that Norwegian oil production or processing can bring Norway more than $20,000 per capita GDP, which is the main reason why Norway's GDP per capita is higher than that of other Nordic or Germanic countries. Norway has developed its chemical industry with its own oil.
Oil production has led to a significant increase in Norway's foreign exchange, which has led to a sharp appreciation of the Norwegian currency, and the nominal GDP of the Norwegian dollar has followed**. Temporarily produces "Dutch disease", and as high exchange rate GDP continues, the "Dutch disease" will become less and less felt. High nominal GDP per capita will have a greater role in promoting the industry for countries with high economic talents, forcing the industry to further upgrade. Inefficient industries will be rapidly phased out, and some of the remaining industries that are compatible with high nominal per capita GDP will also flourish with new industries that are compatible with high nominal GDP per capita. Eventually, the efficiency of production or the functioning of society reaches the level required by nominal GDP, and nominal GDP corresponds to real GDP. In other words, the high nominal GDP brought about by Norway's oil production has promoted the upgrading of Norway's industry, the industrial efficiency has been greatly improved, and the real GDP has been greatly improved. If Norway had not had oil, Norway would have been a highly wealthy developed country, but its per capita GDP would be lower, similar to that of the rest of the Nordic countries.
Norway should be part of the first chapter, and the reason for this is to give you a sense of what the impact of a first-class developed country would be if it had rich oil resources.