Norway is the odd man out in the Nordics. While its neighbours are flirting with free markets, Norway is embracing state capitalism. Its national oil champion, Statoil, is the largest company in the region. The Norwegian state owns large stakes in Telenor, the country’s biggest telephone operator, Norsk Hydro, its biggest aluminium producer, Yara, its biggest fertiliser- maker, and DnBNor, its biggest bank. It holds 37% of the Oslo stockmarket, but it also controls some non-listed giants such as Statkraft, a power-generator, which if listed would be the third-biggest company on the stockmarket.
The simple explanation for Norway’s penchant for state capitalism is oil. When it was discovered in the North Sea in late 1969 it transformed the country’s economy. Today Norway is the world’s eighth-largest oil exporter. Petroleum accounts for 30% of the government’s revenues as well as a quarter of the country’s value added.
There is also a more nuanced explanation. Norwegians have always looked to the state to help manage their abundant natural resources—minerals, fjords, forests, waterfalls—and to look after isolated and thinly spread communities. Norway has a population density of only 13 people per square kilometre. Norway also came up with the idea of the state owning shares in private companies: after the second world war the government nationalised all German business interests in Norway and ended up owning 44% of Norsk Hydro’s shares. The formula of controlling business through shares rather than regulation seemed to work well, so the government used it wherever possible. “We invented the Chinese way of doing things before the Chinese,” says Torger Reve of the Norwegian Business School.
Read more: Norway: The rich cousin | The Economist
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