NORWAY

COUNTRY OVERVIEW

LOCATION AND SIZE.

Norway is situated in the western and northern parts of the Scandinavian Peninsula in northern Europe. It is bordered on the north by the Barents Sea (an arm of the Arctic Ocean), on the northeast by Finland and Russia, on the east by Sweden, on the south by Skagerrak Strait and the North Sea, and on the west by the Norwegian Sea. The Norwegian coastline extends for about 2,740 kilometers (1,700 miles) and with all its deeply cut fjords and islands it totals about 21,930 kilometers (13,620 miles) in length. These islands form an internal waterway protected from the ocean, and Norway's name, meaning "northern way," reflects the importance of that route for linking the country's large number of small isolated fjord and valley settlements separated by icy rugged mountains. Norway has a land area of 324,220 square kilometers (125,182 square miles), making it slightly larger than New Mexico. Located in the south, Oslo is Norway's capital and largest city; Bergen is the cultural center of western Norway and the second-largest city with a population of 225,439. Other important urban centers include Trondheim and Stavanger.

POPULATION.

The population of Norway was estimated at 4,481,162 in 2000; in 1998 it was 4,419,955. Due to its far northern location and mountainous landscape, the country has the lowest population density in continental Europe, with only 11 persons per square kilometer (28.5 per square mile). However, the population is very unevenly distributed across the country, with over half concentrated in the southeast, in and around the capital of Oslo. In contrast, the northernmost Finnmark and other remote districts have very small populations. The migration from the countryside and the increasing urbanization of the population, despite heavy regional governmental spending, have become a source of concern in Norway in recent years. More than three-quarters of the population live within about 16 kilometers (about 10 miles) of the sea, and some 74 percent live in urban areas.

The population of Norway is growing very slowly, with an annual rate of increase of only 0.44 percent in 1998. Norway's life expectancy was among the highest in the world in that year: 79 years for all—82 years for women and 76 years for men, up from 76 years for women and 71 for men in 1965. Like much of Europe, the population is aging. One-third of the people were aged under 20 in 1971, but by 1999 the number had fallen to just over a quarter while the percentage over the age of 70 increased from 8.4 percent to 11.6 percent. In 1999, the population grew by 0.7 percent, the biggest population increase since the early 1950s. This was, however, due to a large net immigration of around 19,000 people, mostly Danes and Swedes, who filled in gaps in the employment market for medical professions and others. The fertility rate is currently around 1.8 children per woman, up from a low of 1.7 in 1985 but still far below the replacement level of 2.1. (Replacement levels help determine population growth. If one couple has 2 children, this is enough to "re-place" themselves. So if a replacement level for a society is significantly above or below 2, then the society may be

growing or shrinking in overall population.) In line with the increase in the overall population size, the labor force has also expanded. In 1999, it was 2.33 million, compared to 2.19 million in 1995.

Much like the other Nordic countries (Denmark, Finland, Iceland, and Sweden), the proportion of foreign citizens living in Norway is still relatively low by western European standards. The population is ethnically homogenous, and most Norwegians are Scandinavians of Germanic descent. Almost all Norwegians are fluent in English, and most of them have some cultural and family ties to the United States. Apart from about 20,000 Saami and some people of Finnish origin in the north, the country has no other significant minority groups, although there are also small numbers of Danes, Swedes, Britons, Pakistanis, Americans, Iranians, and former Yugoslavs.

At the beginning of 1999, there were 178,686 foreign citizens living in Norway (or around 4 percent of the total population), about one-third of these having come from the other Nordic states. One-sixth of all foreign citizens were registered as refugees, the largest group of them coming from Bosnia and Herzegovina's civil war in 1991-95. There were slightly more than 67,000 persons who had arrived initially with refugee status, but nearly half of them opted for Norwegian citizenship. Instances of racially and ethnically motivated violence have been growing in number in recent years despite the relatively low numbers of foreigners. Religious groups in Norway include Evangelical Lutherans, at 86 percent (state church); other Protestants and Roman Catholics, 3 percent; no religion, 10 percent; and others, 1 percent, all in 1997.

INDUSTRY

MINING.

Mining was of relatively little importance in Norway before oil and natural gas fields were found in the North Sea and offshore drilling began in the early 1970s. In 2000, this sector accounted for about 13 percent of GDP (compared with a peak of 18.5 percent in 1984), and the percentage in any year depends mostly on world oil and gas prices. The sector is still largely state-owned, yet as a consequence of restructuring in the global oil industry in the late 1990s, the government has announced plans to allow some partial privatization of its assets.

Oil production started on an experimental basis in 1971, and in 1974 the first seabed pipeline was installed to bring crude oil to the United Kingdom. In 1997, annual oil output was 1.15 billion barrels and gas production was 45.3 billion cubic meters (1.6 billion cubic feet). Natural gas is now piped to Germany and Scotland. Norway also has several modern petroleum refineries. With the high world oil prices in late 2000, its external trade account remained very strong. The oil and gas sector will continue to play a leading role in the economy over the next several decades although its prominence will decline gradually with the progressive depletion of the deposits. According to the Norwegian state petroleum directorate, the remaining oil and gas resources were expected to last 19 and 87 years, respectively, from 1998 at that year's rates of extraction.

Other raw products mined and processed in Norway include iron ore, lead concentrates, titanium, iron pyrites, coal, zinc, and copper. Major iron mines are located in the far north at Sydvaranger, near the Russian border, and a large integrated iron and steel plant is situated at Mo i Rana, near the Arctic Circle. All the coal is mined in the Svalbard (Spitzbergen) archipelago beyond the Arctic Circle where a coal mining concession is also given to neighboring Russia.

MANUFACTURING.

Manufacturing accounts for 1 percent of annual GDP. The electrochemical and electro-metallurgical industries form the leading manufacturing sector. They need an abundance of inexpensive electrical power, which Norway can easily supply. Although all raw materials for the aluminum industry must be imported, Norway produces about 4 percent of the world's output of refined aluminum. It is also a major ferroalloy supplier.

Norway has traditionally been a major shipbuilding nation, but its share of the world's newly built tonnage was less than 1 percent in the mid-1980s. Shipbuilding declined dramatically in the late 1970s as the industry encountered financial problems and Asian competitors carved out larger market shares worldwide. Many shipyards have since shifted capacity to the manufacture of equipment for the oil and gas offshore drilling industries and to transportation. Other manufactures include confections and other food products, chemicals, pulp and paper, and machinery.

SERVICES

FINANCE.

The Norges Bank (the central bank) is the executive body for monetary, credit, and exchange policies. It is also the bank of issue . It is a joint-stock company with the government holding all the shares. Major players in the Norwegian banking sector include some large full-service banks active in the wholesale and retail sectors and many small private retail institutions. Commercial banks are influential and have close relationships with trade and industry, but merchant banks have not reached the prominent position they enjoy elsewhere in Europe. There is also a wide range of savings banks with a long tradition, serving a substantial part of the local credit market. The Norwegian Post Office also keeps its own banking network. There are several specialized smaller banks serving the fisheries, agriculture, shipping, industry, house building, and export trades. The government participates in all of them to various degrees. Banking in Norway is very modern, automated, and computerized. Banking activities are regulated by several pieces of legislation such as the Commercial Banking Act, the Savings Bank Act, and the Act on Financing and Finance Institutions. The liberalization of the sector in the 1990s allowed foreign banks to operate in the country.

TOURISM.

Tourism accounts for around 15 percent of total service revenues. In 1998, there were 1,176 hotels with a total capacity of over 137,000 beds, and nearly 1,000 registered campsites existed. In 1998, foreigners accounted for 32 percent of hotel guest nights, much less than in previous years. The country's main attractions are its picturesque coastline and its fjords, and it boasts a number of well-known ski resorts (Norway has hosted winter Olympic games and other major international sporting events).

RETAIL.

Mainly as a result of Norway's relatively small domestic market, retailers have been unable to develop into major international players and have remained small even by the modest Nordic standards. In retail, the best-known companies include Rimi, Rema 1000, Kiwi, and ICA. Direct marketing is gaining some ground, and e-commerce is particularly robust as almost two-thirds of the population had access to personal computers in 2000.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

9TH CENTURY.

King Harald I the Fairhair reigns over the first Norwegian kingdom, which is later disbanded into small feudal states. Vikings begin exploration and invasions all over Europe, settling in the late 9th century in Ireland, Britain, Iceland, the Orkney Islands, the Faeroe Islands, and the Shetland Islands.

985. King Eric the Red leads an expedition to Greenland. His son, Leif Ericson, is among the first Europeans

Household Consumption in PPP Terms
Country	All food	Clothing and footwear	Fuel and power a	Health care b	Education b	Transport & Communications	Other
Norway	16	7	11	5	4	6	51
United States	13	9	9	4	6	8	51
Germany	14	6	7	2	10	7	53
Sweden	17	5	12	4	14	6	41
Data represent percentage of consumption in PPP terms.
a Excludes energy used for transport.
b Includes government and private expenditures.
SOURCE: World Bank. World Development Indicators 2000.

to explore North America. Other Vikings settle in France, becoming ancestors of the Normans.

995. King Olaf I, a scion of Harald I, takes to Christianizing Norway and is later canonized as Norway's patron saint.

1035. Olaf's son, Magnus I, returns from Russia to the throne and unites Denmark and Norway. For 3 centuries, native kings rule Norway, which begins to emerge as a nation, enjoying a comparative prosperity due to its merchant fleet.

1397. Norway becomes a neglected part of Denmark when Denmark, Sweden, and Norway are put into a single administrative unit. Prosperity and culture decline in Norway as the plague decimates the population. For 4 centuries under the Danish rule the country remains largely stagnant.

1799-1815. Norwegian nationalism starts to rise. In 1814 Denmark cedes Norway to Sweden. The Norwegians declare independence, but European powers force them to accept Swedish rule. They are allowed in return to retain their new constitution and have autonomy with a legislature, army, navy, and customs within their boundaries.

1905. The Norwegians vote for independence from Sweden. The new liberal Norwegian government becomes one of the most advanced in Europe in the area of unemployment, insurance benefits, old-age pensions, and liberal laws on divorce and illegitimacy.

1913. Norwegian women are given the right to vote, and the government promotes equality in the workplace and other progressive policies. Women begin to play an important role in politics.

1914. Sweden, Norway, and Denmark agree to stay neutral in World War I.

1935. The Labor Party is elected to office and continues the policies of moderation and political liberalism dominating domestic politics since 1905.

1940. Norway's traditional neutrality notwithstanding, German forces invade the country in World War II, and a resistance movement in the country cooperates with the government-in-exile in London.

1945. The Labor Party takes office (after Germany surrenders) and remains in power for 20 years. Norway develops a social democratic welfare state as the government takes over the planning of the economy, reinforcing positions in international markets, redistributing wealth more equally, and introducing social welfare legislation.

1959. Norway becomes a founding member of the European Free Trade Association (EFTA).

1967. Norway starts a comprehensive social security program.

1970. Norway applies for membership in the European Community (now the EU), but in a referendum in 1972 the voters reject the government's move.

1970s. Oil and gas exploitation in the North Sea fields by a state company begins.

1981. The first woman prime minister, Gro Harlem Brundtland of the Labor party, takes office.

1994. The European Parliament endorses membership for Norway in the EU, but in a referendum, Norwegians reject joining by about 52 percent to about 48 percent, fearing that it would affect farm subsidies and fishing rights.

DEPENDENCIES

Norway has no territories or colonies.

BIBLIOGRAPHY

Bjørnland, Hilde Christiane. Trends, Cycles, and Measures of Persistence in the Norwegian Economy. Oslo-Kongsvinger: Statistisk sentralbyrå, 1995.

Economist Intelligence Unit. Country Profile: Norway. London: Economist Intelligence Unit, 2001.

Galenson, Walter. A Welfare State Strikes Oil: The Norwegian Experience. Lanham, MD: University Press of America, 1986.

Norwegian Trade Council in North America. <http://www.ntcusa.org> . Accessed September 2001.

Royal Norwegian Embassy in the United States of America. NORWAY.org . <http://www.norway.org> . Accessed September 2001.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html> . Accessed September 2001.

U.S. Department of State. Background Notes: Norway. <http://www.state.gov/www/background_notes/norway_9905_bgn.html> . Accessed January 2001.

U.S. Department of State. FY 2000 Country Commercial Guide: Norway. <http://www.state.gov/www/about_state/business/com_guides/index.html> . Accessed January 2001.

—Valentin Hadjiyski

CAPITAL:

Oslo.

MONETARY UNIT:

Norwegian krone (NOK; also known as Kr). One krone equals 100 øre. There are coins of 1, 5, 10, and 20 krone, and 50 øre, and notes of 50, 100, 200, 500, and 1,000 krone.

CHIEF EXPORTS:

Petroleum and petroleum products, natural gas, raw materials, metals, chemicals, ships, fish.

CHIEF IMPORTS:

Machinery and equipment, automobiles, chemicals, metals, foodstuffs.

GROSS DOMESTIC PRODUCT:

US$111.3 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$47.3 billion (f.o.b., 1999 est.). Imports: US$38.6 billion (f.o.b., 1999 est.).