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Norway’s Telenor Buys Bulgaria’s Globul from OTE

Sunday, 28 April 2013 23:03
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Telenor ASA has agreed to buy Bulgaria's Globul from current owner OTE for EUR 717 M on a cash and debt free basis, the Norwegian telecoms firm said in a statement on Friday. Globul is Bulgaria's second-biggest mobile telephony operator.

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Long-term Perspectives on the Norwegian Economy

Monday, 22 April 2013 02:49
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Norway is a wealthy society with a high income level, comprehensive public welfare benefits and solid public finances. While the starting point is advantageous, the Norwegian economy is likely to be faced with difficult choices in the decades to come, such as those related to changes in the global economy, global warming and population aging.
 
In particular, increased life expectancy will threaten the sustainability of our public finances unless retirement also is postponed. The Government today released a white paper discussing challenges and policy options facing the Norwegian economy towards 2060.
 
- The main message in Long-term Perspectives for the Norwegian Economy 2013 is simple, but important: Labour is the key to securing welfare, also in the future. Public policies must therefore support broad participation in the labour force, says Minister of Finance Sigbjørn Johnsen.
 
The white paper considers current policies in a long-term perspective. Doing so requires insight into the forces driving economic development and analysis of the consequences of different policy options. A key topic is fiscal sustainability and the challenges related to population aging.
 
Norway has a high income level and scores high in international quality-of-life surveys. Our wealth is more evenly distributed, and inter-generational income mobility is higher, than in most other countries.
 
Comprehensive in-kind welfare benefits and transfers are supported by solid public finances. A sound capacity for economic growth, fair income distribution and comprehensive public welfare systems are key features of the Norwegian social model.
 
A small country like Norway benefits particularly from the division of labour made possible by international trade. In recent decades, populous countries like China, India and Brazil have become more strongly integrated into the global economy.
 
Strong growth in these emerging markets has boosted global production, in particular during the international financial crisis. For Norway, this has improved the access to affordable consumer imports, while the prices of important Norwegian exports like oil have remained at high levels.
 
Norway's terms of trade has improved considerably since the late 1990s. However, gains in the terms of trade can quickly be reversed.
 
- Norway is vulnerable to lower prices on our export goods. We must make sure our economy is flexible and be prepared to meet unexpected external shocks. The macroeconomic framework is designed to promote a solid and stable development of the Norwegian economy, underlines Johnsen.
 
The Government Pension Fund Global is an important element of the macroeconomic framework, helping us to separates the earning of petroleum income from the use of that income.
 
The fiscal policy rule stipulates that the spending out of the fund over time should equal the expected real return, so that petroleum wealth also will benefit future generations. It also allows fiscal policy to play a stabilizing role.
 
The tripartite cooperation between the government and the social partners facilitates wage setting consistent with international competitiveness and low unemployment. Monetary policy helps to ensure low, stable inflation and counteracts fluctuations in production and employment.
 
Policies for financial stability emphasise solidity, liquidity and sound conduct through regulation and supervision.
 
Rising life expectancy entails population aging in both Norway and most other industrialised nations. While longevity indicates a healthy society, it may also challenge growth and the sustainability of public finances if retirement is not postponed correspondingly.
 
This is in particular the case for Norway, with comprehensive and tax- financed public welfare benefits. On average, individuals in the labour force are net contributors to public finances, while children, youth and the elderly are net beneficiaries.
 
Although the returns on the Government Pension Fund Global contribute significantly to public expenditure, the fund is far from large enough to overcome the challenges presented by an aging population.
 
The white paper considers the sustainability of public finances in different scenarios. Given the present tax level and welfare system, population aging will produce a gradually increasing gap between public revenues and expenditures if the labour supply of various demographic remains unchanged. In 2060, this financing gap is estimated to 6 per cent of Mainland GDP.
 
The estimates are uncertain, but the overall picture is robust to changes in a number of underlying assumptions.
 
- We should not be misled by the rosy state of public finances today and the next few years. Over time, Norway is likely to meet significant budget challenges. We must keep this in mind when we take policy decisions, says Johnsen.
 
The white paper illustrates that it is not oil, but our collective work effort, that is the basis of our welfare. Over time, a public welfare system will be unsustainable if the share of net beneficiaries in the population continues to increase.
 
If we live longer, it would seem sensible to boost average labour supply by postponing withdrawal from the labour market or increasing hours worked. Reducing the share of individuals on sickness and disability schemes will also improve the long-term sustainability of public finances.
 
Labour is not only the key to economic independence for each individual, but also to sustainable welfare schemes.
 
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Norway hosts International meeting on energy and development in Oslo

Wednesday, 10 April 2013 07:12
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Energy is vital for development. Tomorrow, Norway will host an international high-level meeting on energy and the post-2015 development agenda.

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India - Norway signs contracts for delivering simulators

Tuesday, 09 April 2013 05:43
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Bibby Ship Management India Pvt. Ltd has contracted Norwegian company Kongsberg Maritime to deliver a KONGSBERG Offshore Vessel Simulator (KOVS).

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Horsemeat sale on rise in Norway

Monday, 25 February 2013 09:27
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Despite the much publicized food scandal this month, when horsemeat was detected in frozen lasagna all over Europe, the sale of horse meat has skyrocketed in Norway, according to butcher shops.

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Norges Bank calls for resilient banking sector

Saturday, 16 February 2013 14:56
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In his annual speech, outlining economic perspectives, the Governor of the Norwegian Central Bank, Øystein Olsen called for a more resilient banking sector in Norway.

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Telenor gets strong results in Q4

Thursday, 14 February 2013 10:52
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Norway's Telenor Group reported revenues of NOK 26.0 billion, in the fourth quarter of 2012, representing an organic revenue growth of 5%. For the full year of 2012, Telenor’s revenues were NOK 101.7 billion.

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Challenges faced by Norway's Economy

Saturday, 09 February 2013 12:19
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The Government has released a white paper discussing challenges and policy options facing the Norwegian economy towards 2060, stating it is likely to be faced with difficult choices in the decades to come.

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Myanmar may receives investment from Statoil

Wednesday, 30 January 2013 14:59
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Norwegian energy provider Statoil is looking into the possibility of exploring for oil and gas in Myanmar, and several company delegations have already been there to consider the situation.

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20% more companies in 2012

Thursday, 24 January 2013 03:54
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The number of new enterprises established in Norway in 2012 was 20 per cent higher than in 2011, according to a survey made by Experian for the newspaper Nationen.

Last year, the number of new companies reached 34,237, the highest since the record year 2006, when 37,000 new companies were established.

The highest number of new establishments is found in the building and construction industry, with more than 1500 new enterprises.
 

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Statkraft expands with Laotian Power Company

Tuesday, 15 January 2013 06:34
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The Laotian utility company Theun Hinboun Power Company (THPC), where Norway's Statkraft owns 20 per cent, has opened two new power stations in Laos.

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New business boss sees trouble ahead

Wednesday, 07 November 2012 03:46
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Kristin Skogen Lund, newly appointed chief executive of Norway’s largest employers’ organization NHO, warns that Norway risks heading for an economic backlash because of its extremely high cost levels.
 
Lund, in her first interview as NHO’s boss, told newspaper Dagens Næringsliv (DN) that Norwegians can’t expect that their oil-fueled economy will remain strong forever.
 
Lund took over as head of NHO (Næringslivets Hovedorganisasjon) on November 1 and spent her first official day on the job in an unlikely place: the Dharavi slum area of Mumbai (Bombay), where her former employer and NHO member Telenor has a growing number of subscribers through its Uninor mobile phone unit.
 
NHO is also boosting its cooperation with employer and business organizations in India, to promote trade and investment between India and Norway.
 
The contrast between Dharavi and Oslo, meanwhile, was extreme, and perhaps offered an important “reality check” for the Norwegian delegation.
 
Skogen Lund stressed that it’s important to remember that Norway wasn’t always a wealthy country. It once was an extremely poor country, with its own slums and impoverished rural areas that prompted hundreds of thousands of Norwegian economic refugees to seek a better life elsewhere, mostly in the US.
 
“I have studied economic history myself, and all countries and superpowers that have enjoyed boom times have also gone into decline again,” Skogen Lund told DN. “The fact is that no country has an eternal upturn.”
 
Costs hurt competitive ability
 
Norway’s economy has been on a long roll for years, with low unemployment and strong growth as oil revenues pour into state coffers.
 
A string of various governments has also taken care not to spend too much of the country’s oil wealth, for fear of overheating the economy, and has been disciplined enough to build up what now ranks as one of the world’s largest sovereign wealth funds that will be used to fund future pension demands.
 
Skogen Lund nonetheless points out that even though Norway is now a wealthy and successful country, it needs to nurture more education and knowledge and pay more attention to value creation and productivity.
 
Norway, she said, “has developed a much higher cost level than our trading partners,” noting that costs on average are 54 percent higher in Norway than in countries it must compete with, and more than 30 percent higher than its Nordic neighbours, which also have developed the social welfare systems that make it expensive for employers to do business.
 
Norway’s system, along with various political and protectionist policies, makes it one of the most expensive countries in the world.
 
‘Extraordinary situation’ now
 
Skogen Lund worries that Norway still gets “good prices for what we make and export,” while imports have become “very cheap.”
 
Her point, she told DN, and what she claims is often forgotten, “is that this is an extraordinary situation that can suddenly change.” Prices for Norway’s exports can fall, while import prices can rise. “This is not a sustainable situation over time,” she told DN.
 
She also claimed that Norway has high pay levels that have been defended because of the “extraordinary” situation. “Sooner or later, this will have to be corrected,” said Skogen Lund, who earns NOK 3.1 million (USD 540,000) herself in her new job. “We need to rein in wage growth in Norway, and improve productivity.”
 
NHO bills itself as an organization that’s politically neutral, unlike its trade union federation counterpart LO in, for example, wage negotiations. LO is solidly aligned with the Labour Party while NHO claims it has no allegiance to the Conservative Party or other borgerlige (non-socialist) parties.
 
Skogen Lund noted, however, that the platforms of the non-socialist parties like the Conservatives in Parliament “look promising” for business. NHO seems encouraged by their proposals to remove taxes on working capital and inheritance, for example, and promote more employment flexibility.
 
 
(Views and News from Norway)
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Swedish town pays unemployed who travel to Norway

Wednesday, 07 November 2012 02:56
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Söderhamn, a town in Sweden, has started to sponsor unemployed youth who wish to travel to Norway in the hopes of finding a job.
 
"We do not send them away. We help them take one more step, and gain another experience," says the head of the employment office in Söderhamn, Mohamed Chabchoub.
 
Chabchoub claims that the joint initiative between the municipality and the employment office is not an attempt to "buy themselves" out of a currently high unemployment rate.
 
The youth get free housing in Norway for a month, and are offered assistance with finding a job in Norway.
 
The initiative, which is called "The job journey - the door to finding work in Norway" (Jobbreisen - Døren til arbeid i Norge), was a necessary measure according to municipal project leader Magnus Nilsen.
 
The unemployment rate is more than 25 percent, and traveling to Norway to work has already been a popular option among youth, Nilsen tells the British newspaper Daily Telegraph.
 
"But some who wish to travel do not know how they can find work, or a place to live. That's why we help them with a little bit of both," says Nilsen.
 
Söderhamn is located 250 kilometers north of Stockholm, and has a population of approximately 12,500.
 
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