Oecd economic surveys : norway.

227 Pages·2004·1.555 MB·English

by  OECD

Norway OECD
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Special Feature: Competition and Economic Performance lu Economic Surveys
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Economic Surveys Non-Member Economies 0
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Australia, March 2003 Baltic States, February 2000 /
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Austria, December 2003 Brazil, June 2001
Belgium, February 2003 Bulgaria, April 1999
Canada, September 2003 Chile, November 2003
Czech Republic, April 2003 Romania, October 2002
Denmark, July 2003 Russian Federation, February 2002
Euro area, October 2003 Slovenia, May 1997
Finland, March 2003 Federal Republic of Yugoslavia,
France, July 2003 January 2003
Germany, January 2003
Greece, July 2002
Hungary, May 2004
Iceland, April 2003
Ireland, July 2003
Italy, August 2003
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Japan, January 2003 E
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Korea, March 2003
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Luxembourg, September 2003
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Mexico, January 2004 c
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Netherlands, January 2002 n
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New Zealand, January 2004 m
Norway, June 2004 ic

Poland, July 2002 S
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Portugal, February 2003 r
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Slovak Republic, March 2004 e
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Spain, May 2003 s

Sweden, March 2004 N
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Switzerland, January 2004
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Turkey, December 2002 W
United Kingdom, March 2004 www.oecd.org A
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United States, May 2004
ISSN 0376-6438 ISBN 92-64-01488-8
2004 SUBSCRIPTION 10 2004 06 1 P J
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Volume 2004/6 – June 2004 0 Volume 2004/6 – June 2004
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OECD
ECONOMIC
SURVEYS
2004
Norway
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a
rising standard of living in member countries, while maintaining financial
stability, and thus to contribute to the development of the world economy;
– to contribute to sound economic expansion in member as well as non-member
countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-
discriminatory basis in accordance with international obligations.
The original member countries of the OECD are Austria, Belgium, Canada,
Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the
United Kingdom and the United States. The following countries became members
subsequently through accession at the dates indicated hereafter: Japan
(28th April 1964), Finland (28th January 1969), Australia (7th June 1971),
New Zealand (29th May 1973), Mexico (18th May 1994), theCzech Republic
(21stDecember 1995), Hungary (7th May 1996), Poland (22nd November 1996),
Korea (12th December 1996) and the Slovak Republic (14thDecember2000). The
Commission of the European Communities takes part in the work of the OECD
(Article 13 of the OECD Convention).
Publié également en français.
© OECD 2004
Permission to reproduce a portion of this work for non-commercial purposes or classroom
use should be obtained through the Centre français d’exploitation du droit de copie (CFC),
20, rue des Grands-Augustins, 75006 Paris, France, tel. [phone], fax [phone],
for every country except the United States. In the United States permission should be
obtained through the Copyright Clearance Center, Customer Service, [phone],
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applications for permission to reproduce or translate all or part of this book should be made
to OECD Publications, 2, rue André-Pascal, 75775 Paris Cedex 16, France.
Table of contents
Assessment and recommendations 9
1. Economic trends and policy challenges 23
Introduction 23
Fiscal and external sustainability issues 24
Macroeconomic policies: finding their bearings in the new regime 32
Structural-macro tensions in the medium run 44
Summary: the main challenges 49
Notes 51
Bibliography 54
Annex 1.A1. Long-run adjustments in macroeconomic balances 55
Annex 1.A2. Potential growth in the medium to long run 59
Annex 1.A3. Competition and stability in the norwegian financial market 67
2. Fiscal reform 73
Introduction 73
Fiscal policy in the current conjuncture 75
Fiscal policy in the medium term 79
Medium term challenges 92
Notes 100
Bibliography 103
Annex 2.A1. Tax reform and the shareholder model 104
3. Product market competition and economic performance in Norway 109
Introduction 109
Macroeconomic performance and indicators of competition 110
The competition law’s compliance instruments need strengthening 119
Extensive public-ownership creates competition problems 121
Regulatory policies at the sectoral level 124
The public sector has a key role to play in introducing more competition
into the economy 141
Macroeconomic effects of regulatory reform 143
Overall assessment and scope for further action 145
Notes 149
Bibliography 153
© OECD 2004
4 OECD Economic Surveys: Norway
4. Reforms to boost labour supply and human capital 155
Towards a more flexible labour market 155
Removing work disincentives from the benefit system 166
Improving education to raise human capital 175
Notes 189
Bibliography 194
5. Some aspects of sustainable development 197
Climate change 197
Making a sustainable use of renewable and non-renewable resources 203
Improving living conditions in developing countries 208
Notes 216
Bibliography 217
Annex A. Calendar of main economic events 219
Glossary of acronyms 222
(cid:127)(cid:127)(cid:127)(cid:127)(cid:127)
Boxes
1.1. Flexible inflation targeting 38
2.1. Accruals versus cash-based accounting 82
2.2. Important reforms to raise efficiency of government 86
2.3. The National Insurance Scheme and the pension reform proposals 95
3.1. Norwegian competition policy and enforcement 120
3.2. Government ownership and its implications for corporate governance 123
3.3. Organisation of the dairy market in Norway 126
3.4. Vinmonopolet and the market for alcohol in Norway 128
3.5. The Norwegian and Nordic electricity markets 131
3.6. Norway Post and purchases over the Internet 138
3.7. Initial experiences with more competition in air transport 139
3.8. Economy-wide effects of sectoral reforms 144
4.1. Recommendations for reform of the education sector
by the governmental working group 182
4.2. Progress and recommendations on structural reforms 185
5.1. Integration across sustainable development areas 198
Tables
1.1. Projections of age-related spending, 2000-2050 27
1.2. Sectoral shares of value added and employment 31
1.3. Inflation and real interest rates : Norway v. euro area 35
1.4. Short-term outlook 41
1.5. Productivity, wage, and price growth 42
1.6. Oil activity 45
2.1. Structural, non-oil budget balance 75
2.2. Key figures for the fiscal budget (including social security)
and the government petroleum fund before loan transactions 76
© OECD 2004
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2.3. General government net lending 76
2.4. The development in the Petroleum Fund and the structural,
non-oil balance2001-2010 77
3.1. Output, employment and productivity 111
3.2. Key structural features of the retail distribution sector, 2000 125
3.3. Assumptions and effects of pro-competitive regulatory reform
in selected industries 145
3.4. Summary of recommendations 147
4.1. Labour market performance 156
4.2. Participant inflows as a percentage of total inflows 165
5.1. Main indicators: climate change 199
5.2. Greenhouse gases emissions by sector 200
5.3. Rates of the CO tax by sector 200
2
5.4. Performance indicators: fisheries 206
5.5. OECD non-energy imports from developing countries 210
5.6. Norwegian non-energy imports from developing countries 211
5.7. Tariffs on industrial and agricultural goods 212
5.8. Preferential tariffs in2000 213
Annexes
1.A1.1.Sectoral balances and net asset positions 54
1.A2.1.Labour productivity growth in the business sector 60
1.A2.2.Medium-term baseline GDP growth for Norway 62
1.A2.3.Norwegian oil investment is reduced by NOK 35billion 63
1.A2.4.Long run growth rates based on alternative assumptions about future
pension reforms 64
Figures
1.1. Real exchange rate and non-oil current account 30
1.2. Non-oil budget balance 32
1.3. Output gap in Norway and among trading partners 33
1.4. Key macroeconomic indicators 34
1.5. Export performance and relative labour costs 37
1.6. Price developments in Norway and euro area 37
1.7. Monetary conditions 39
1.8. Credit growth by sector 42
2.1. Total tax revenues in OECD countries 79
2.2. Public employment 80
2.3. Difference in top marginal tax between capital and labour income 89
2.4. Current and proposed tax rate structure 91
2.5. Long-term developments in pensions and oil revenues 94
3.1. Progress in liberalisation of service sectors in OECD countries 112
3.2. R&D spending and industry structure 114
3.3. Industry-level mark-ups in Norway and other OECD countries 115
3.4. Price difference between Norway and the EU 116
3.5. Food prices in Norway and the EU area 117
© OECD 2004
6 OECD Economic Surveys: Norway
3.6. Openness indicators in the OECD area 118
3.7. Relative size of public enterprise sector 122
3.8. Pre-tax prices for gasoline in an international perspective, Q32003 127
3.9. Electricity, consumption and production capacity 133
3.10. Telecommunication prices in the OECD 134
3.11. Broadband penetration and user charges in OECD countries 136
3.12. Population by municipalities 142
4.1. Employment, labour force and person-hours worked 158
4.2. Labour market developments 160
4.3. Beneficiaries of social security benefits 167
4.4. Net replacement rates and relative poverty 167
4.5. Sick leave 170
4.6. International comparison of disability benefit indicators 172
4.7. Employment by couples with children 174
4.8. Population with at least upper secondary education 176
4.9. Expenditure in education in OECD countries 177
4.10. Expenditure on educational institutions 177
4.11. Local and regional expenditure on education 178
4.12. Ratio of students to teaching staff in public and private institutions 179
5.1. Taxes on motor fuels and road vehicles in2002 202
5.2. Management of oil and gas resources 205
5.3. Northeast Artic cod: Recommendations and actual catch limits 207
5.4. Official development aid: an international comparison 209
5.5. Producer Support Equivalent: 1986-88 and 2000-2002 214
Annexes
1.A1.1.Petroleum revenues 55
1.A2.1.Per capita real GDP growth and its components 61
1.A3.1.OECD venture capital investment by stages 69
© OECD 2004
BASIC STATISTICS OF NORWAY
THE LAND
Area (1 000 km2) : Major cities (thousand inhabitants, 1.1.2003):
Total (2001) 385.2 Oslo 517.4
Mainland (2001) 323.8 Bergen 235.4
Agricultural (2001) 10.4 Trondheim 152.7
Productive forests (2002) 74.5
THE PEOPLE
Population (thousands, 1.1.2003) 4 552.3 Total labour force (thousands) 2 354
Number of inhabitants per km2 (1.1.2002) 11.8 Civilian employment (thousands) 2 249
Net natural increase (thousands, 1.1.2002) 10.7 Civilian employment (% of total):
Net migration (thousands, 1.1.2002) 17.2 Agriculture, forestry and fishing 3.5
Industry and construction 21.7
Services 74.6
PRODUCTION
Gross domestic product: Gross fixed capital investment
NOK billion 1 520.7 % of GDP 17.0
Per head (USD) 41 833 Per head (USD) 7 132
THE GOVERNMENT
Public consumption (% of GDP) 21.9 Composition of Parliament (number of seats):
General government (% of GDP) Labour 43
Current and capital expenditure 47.5 Progressive 26
Current revenue 58.4 Christian Democrats 22
Conservative 38
Centre 10
Social Left 23
Last general elections: 10.9.2001 Other 3
Next general elections: September 2005 Total 165
FOREIGN TRADE
Exports of goods and services (% of GDP) 41.5 Imports of goods and services (% of GDP) 27.3
of which: Oil and gas 17.8
Main commodity export (% of total): Main commodity import (% of total):
Fish and fish products 5.8 Ships 1.0
Base metals and producs 7.7 Raw materials (including fuel andchemicals) 10.4
Machinery and transport equipment Base metals and products 8.4
(excluding ships) 8.3 Machinery and transport equipment
Mineral fuels 60.7 (excluding ships) 34.1
Non-oil commodity exports by area (% of total) Non-oil commodity imports by area (% of total)
EU 67.8 EU 68.4
of which: Denmark and Sweden 21.0 of which: Denmark and Sweden 23.8
United States 7.6 United States 6.3
Rest of the world 24.6 Rest of the world 25.3
THE CURRENCY
Monetary unit: Krone January 2004, average of daily rates:
NOK per USD 6.81
NOK per euro 8.59
This Survey is published on the responsibility of the
Economic and Development Review Committee of the OECD,
which is charged with the examination of the economic situation of
member countries.
(cid:127)
The economic situation and policies of Norway were
reviewed by the Committee on 26January2004. The draft
report was then revised in the light of the discussions and given
final approval as the agreed report by the whole Committee on
27February2004.
(cid:127)
The Secretariat’s draft report was prepared for the
Committee by Alexandra Bibbee, Flavio Padrini, Simen
Bjørnerud, Jens Hoj and Boris Cournède under the supervision
of Nicholas Vanston.
(cid:127)
The previous Survey of Norway was issued in
September2002.