It was created after the discovery in 1969. How Norway's "Oil Fund" works
The Global Government Pension Fund was created after Norway discovered oil in the North Sea. The fund was created to protect the economy from fluctuations in oil revenues. It also serves as a financial reserve and a long-term savings plan so that Norway's current and future generations can benefit from the oil wealth.
In 1969, one of the world's largest offshore oil deposits was discovered in Norway. Suddenly, the Nordic country had a lot of oil to sell and its economy grew dramatically.
Early on, it was decided that oil and gas revenues should be used carefully to avoid imbalances in the economy. In 1990, the Norwegian parliament passed legislation to support this idea, creating what is now the Global Government Pension Fund, and the first money was deposited into the fund in 1996. As the name suggests, it was decided that the fund would only invest abroad country.
Oil revenues have been very important to Norway, but one day the oil will run out. The purpose of the fund is to ensure that that money is used responsibly, and thus protect the future of the Norwegian economy.
How does the fund grow?
Although revenues from oil and gas production are transferred to the fund, these deposits account for less than half of its value. Much has been earned by investing in stocks, fixed income, real estate and renewable energy infrastructure.
Today, it is one of the largest funds in the world, owning almost 1.5 percent of all shares in companies listed on the world stock exchange. This means that the Fund has shares in around 9,000 companies worldwide, giving it the right to a small share of their profits each year.
In addition, the fund owns hundreds of buildings in some of the world's major cities, which generate rental income.
Fondi gjithashtu merr një fluks të qëndrueshëm të ardhurash nga kreditimi për vendet dhe kompanitë e ndryshme. Duke i përhapur gjerësisht investimet, është zvogëluar rreziku i humbjes së parave të fondit.
Si shpenzohen kursimet
Çdo vit, qeveria norvegjeze mund të shpenzojë vetëm një pjesë të vogël të fondit, por kjo është gjithësesi pothuajse 20 për qind e buxhetit të qeverisë.
Ekziston një konsensus i gjerë politik se si duhet të menaxhohet fondi. Sa më pak të shpenzohet sot, aq më mirë do të jetë Norvegjia në pozicionin për t’u përballur me rëniet ekonomike dhe krizat në të ardhmen.
Tepricat buxhetore kalojnë në fond, ndërsa deficitet mbulohen me para nga fondi. Me fjalë të tjera, autoritetet mund të shpenzojnë më shumë në kohë të vështira dhe më pak në kohë të mira.
In order for the fund to benefit as many people as possible in the future, politicians have agreed on a fiscal rule that ensures that no more is spent than the expected income in the fund.
On average, the government only has to spend the equivalent of real income into the fund, which is estimated to be about 3 percent a year. In this way, oil revenues gradually flow into the economy. At the same time, only the annual income of the fund is spent, and not its capital.
The role of the fund is to ensure that the national wealth lasts as long as possible. Its investments have an extremely long-term perspective, enabling it to withstand large fluctuations in value in the short term.