Norway today ranks top in every major human development metric and it didn’t occur by chance. Rather, it had a concerted policy in place to develop a national petroleum industry, and avoid becoming a country dependent on resource revenues. Norway had a flexible approach to policy reforms in the face of changing economic circumstances though the overarching goal of the nation’s development needs remained the same. Initially, sustainable development meant using the resource revenues to develop an industry complementary to their resource wealth. Only then did they diversify the proceeds to generate long-term offshore capital accumulation and investments
So what can we learn from Norway in resource development strategy?
- Need to build strong political institutions to draw on sufficient expertise to produce general policy guidelines.
- Investment in industries that are strategic complements to upstream petroleum extraction
- Oil Fund (e.g Norwegian Pension Fund) to invest resource rents abroad to smooth against revenue volatility