I am sure that in Venezuela we are again going to hear: “Leave it to us to run a Norwegian type Wealth Fund so that we will make you all rich in no time”
As a Venezuelan who way back in 1974, during the first oil boom, had to do with the incipient Venezuelan Investment Fund, I have often wondered the following:
As a Venezuelan who way back in 1974, during the first oil boom, had to do with the incipient Venezuelan Investment Fund, I have often wondered the following:
Had we had the luck of getting the best of advisers and the least political interference possible, how much could we have accumulated in a fund like the Norwegian Wealth Fund, before it would be impossible to resist the attacks of bandits, or before a populist inflamed the desires of a majority for having a go at the piñata?
In The Economist we now read that the NWF gained “$100bn in the past year, thanks in large measure to the global stockmarket boom in 2017”… and now its management (surely a lot because of its success), is “increasingly acting as an activist shareholder, speaking out on executive pay, ethical behaviour, companies’ use of water, child labour and more”.
Questions:
What would the reaction be if billions of the NWF now suddenly vanished because of adverse market conditions?
Would there then be a Norwegian politician arguing for much of NWF to be shared out before its too late?
Will some Norwegians begin to ask: “how much is that worthy social investment conscience costing us”?
And when the NWF perhaps begins to pay out more than it takes in, among other because of demographic changes increasing the number of older Norwegian, will we then hear from the young: “Yes it mentions pensions, but, hold it there, what about us?”
You doubt it? In 1990 when the fund was created its name was The Petroleum Fund of Norway, in 2006 it changed its name to The Government Pension Fund Global
Also does not the sole existence of such a wealthy wealth fund little by little begin changing the national character? Would the Norwegian Vikings have ventured out on dangerous seas if they had already been in possession of $200.000 each?
Norway justified much its fund with having to keep foreign earnings abroad so as to avoid the Dutch disease of an overvalued currency. But Norway was already a more developed nation with much less immediate needs. Venezuela has more urgent priorities.
Anyone could argue all these comments by a Venezuelan are just pure envy. Of course they contain a lot of envy, but that's not all. Much more important than a very wealthy national wealth fund, is the existence of able and not dependent citizens.
For me that requires getting rid of that submissively pleading attitude that grows upon citizens, when the government receives for distribution 97% of the nations exports.
So I would much rather prefer Venezuela's net oil revenues being shared equally and continuously among all Venezuelans, to a wealth fund like this.
So I would much rather prefer Venezuela's net oil revenues being shared equally and continuously among all Venezuelans, to a wealth fund like this.
Frankly, who can think that a nation where children are dying or growing up malnourished, while gas is sold at less than US$1 cent per gallon, is socially or mentally prepared to have a Wealth Fund?
Venezuela has by far the cheapest price of gas, Norway the most expensive... that should tell you something. (Perhaps the Norwegian government has received more income by means of gas taxes than what they have given up to the fund.)
What would I suggest my Norwegian friends?
The first answer: I really do not know or dare to suggest anything. I just pray their beautiful fund does not morph into something bad.
The second answer: Go back to its original name. Whatever is paid out should, as a Norwegian Oil Dividend, let it go equally to all living Norwegians, without any redistribution profiteers interfering. For a magnificent wealth fund like this, that has helped to create much richness in foreign lands, to end up its days only funding the pensions for the old of some lucky generations, sounds just too sad.
PS. Someone might call the very high ownership or control by the state of a nations wealth, socialism. But I, as a Venezuelan, a nation in which the largest oil reserves are managed by the government know, that the higher the level of state ownership, the greater the dangers that it will be captured by authoritarian criminals.
