You are here
Wealth fund at 10t kroner has Norwegians trying to cash out
NORWAY has always said its sovereign wealth fund belongs to the people. But recently, that's needed a bit of clarification.
Since hitting a record 10 trillion kroner (S$1.5 trillion) last month, the fund has noticed an uptick in inquiries from Norwegians wondering whether they can now withdraw their share. Requests range from people asking for their full pro-rata stake - which, given Norway's population of about 5.3 million, comes to more than US$200,000 per person - to less serious pleas for a few coins to buy a can of soda.
"It's nice that people get involved and are aware that this fund belongs to everyone," said Marthe Skaar, a spokeswoman for Norges Bank Investment Management, which manages the fund from Oslo.
Though some Norwegians may be disappointed to learn they can't make withdrawals, Ms Skaar says the sudden spike in public interest in the fund represents a good opportunity to explain it's also supposed to benefit future generations. She said that such requests are nothing new and the fund doesn't keep a precise tally, although there had been an "upswing" after the valuation milestone.
The Government Pension Fund Global, as it is officially known, isn't really a pension fund. Its purpose is to ensure that Norway keeps profiting from its oil wealth long after the fossil-fuel era ends. It only invests outside Norway, to avoid overheating the domestic economy.
The government also spends some of its oil wealth on present-day Norwegians. After a drop in crude prices, it was forced to tap the fund to pad its budget in a rare example of fiscal stimulus in Europe.
A lot of oil-producing countries have set up wealth funds, but Norway's remains a unique experiment in natural-resource wealth management. The fund's mandate is anchored in Parliament, and has evolved over time with ethical restrictions on tobacco, certain weapons and most coal producers.
Norway's wealth fund holds roughly 1.5 per cent of the world's listed equities. The past decade has seen a steep increase in its value, after a buying spree on cheap stocks during the financial crisis resulted in a quadrupling of its size since 2008. BLOOMBERG