Transition of a rentier oil country to a sustainable economy: A case study for Norway
Keywords:
Development, Rentier state, Petroleum, Management, Energy policyAbstract
Oil as the main source of economic and political power has played a significant role in oil governments’ political and social developments and has been one of the main pillars of power. But historical experiences have shown that having huge oil resources didn’t lead the countries to a certain development and welfare stage. The national dependence of oil-rich countries had various multidimensional consequences. One of the main reasons for this attitude is undoubtedly the reliance on oil revenues. Unlike other oil-rich countries, Norway focuses on human development instead of its natural assets, using oil wealth as support and engine of development. This support engine works by storing oil revenues in a Foreign Exchange Reserve Fund, investing it in different foreign industries within a clear framework, and preventing it from entering directly into the country’s budget plan. These frameworks Hence, in the case of Norway, not only oil does not have negative and anti-developmental consequences in political, social, and cultural aspects, but also the existence of oil as a natural gift that is used efficiently and with capable management like Norway’s sovereign fund, can fuel development and enhance countries’ economic capabilities and help develop various national industries. This developmental view has saved Norway from falling into the trap of rentierism. This paper aims to study the framework that helped Norway escape the trap of rentierism and become one of the few cases of developed oil-exporting countries.
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