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Saturday, April 20, 2024

What's ahead for Norway in 2010

Higher unemployment, rising interest rates, more criticism of the social welfare system and debate over steadily increasing sick leave: That’s what authorities expect in the year ahead, but a new public opinion poll suggests most Norwegians remain optimistic and haven’t been scared by the finance crisis. The president of the national employers’ association NHO doesn’t understand why more people aren’t worried.

Paul-Chr. Rieber of NHO (Næringslivets Hovedorganisasjon) issued a remarkable quote to newspaper Dagens Næringsliv (DN) on Monday:

“I think it’s worrisome that so few are worried, at a time when export firms especially are on the verge of a year that will be at least as demanding as 2009,” Rieber told DN.

His comment comes after a new survey conducted for NHO indicates that the global finance crisis hasn’t scared most Norwegians. Only 15 percent responded that they’re worried about any economic crisis, reports DN, and just 11 percent are concerned about their own personal finances.

The survey carried out by research firm Synovate questioned 1,000 Norwegians about what worried them the most. That turned out to be rising crime, violence and immigration. More Norwegians were worried about terrorism and natural catastrophes than they were about the economy.

Synovate director Erik Dalen shares Rieber’s surprise that so few are worried about economic issues, linking the response to public confidence in state authorities. He also suggested Norwegians have been lulled into believing they live in the best country on earth, and therefore have little reason for worry.

Ola Grytten, a professor business school NHH (Norges Handelshøyskole) , said Norway’s oil wealth and relative lack of ill effects from the finance crisis are behind the survey results. Philosopher Einar Øverenget of Humanistisk Akademi links the lack of worries to the welfare state.

“In Norway we think that the state will take care of us and make sure that we won’t suffer in life,” Øverenget told DN. “In the US, parents save so their children can go to college. In Norway we think society will provide for that.

“The danger is that our lack of worries can give false security, because we should be a bit more conscious of how value is created.”

Rieber noted that “central portions” of Norwegian business “are by no means finished with the finance crisis,” adding that “we can’t just lean back and enjoy the income bubbling out of the North Sea.”

Politicians are bracing for some storms ahead. New Labour Minister Hanne Bjurstrøm will give her assessment of sick leave and welfare administration in Parliament next week, while Finance Minister Sigbjørn Johnsen already has warned of the need for tighter budgets. Interest rates are likely to rise, which can make the Norwegian currency even stronger and hurt exports.

But even senior economist Knut A Magnussen at DnB NOR Markets downplayed negative effects of higher rates. “For most people, there’s no reason to fear interest rate developments,” he told newspaper Dagsavisen last week. “We maintain that 2010 will also be a year with almost zero interest rates in the big international economies.”



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