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Archive for February 22nd, 2018

What do you know of Norway? Ranked #1 on many indicators

Norway: a “Northern miracle” through the eyes of statistics

Note: Currently, Norway is #1 in collecting Olympic medals of all kinds in South Korea winter game

Is extracting crude oil and gas good or evil? Norway managed to avoid  this “resource curse

On the one hand, Norway doesn’t have anything special to constantly attract the world media:
·         It is the most Northern European country: 1/3rd of the country’s territory is situated within the Polar circle
·         The least populated European country (4.9M people).
·         2/3rds of the territory are covered with mountains and lakes. That is why most Norwegians travel by plane.
·         In the 1950s Norway was considered the poorest European country
On the other hand, Norway is currently considered one of the most developed and successful countries of the world:
·         It comes 2nd in terms of natural gas export (after Russia) and 6th in terms of oil export. It was the only country to retain the budget surplus in 2009 (9.9% of the GDP, mostly at the expense of its crude oil exports).
·         The rate of saving is 25%-30%. In this aspect Norway has been sharing the 1st place with Japan and Finland since the end of WWII.
·         It is the world’s 6th richest country in terms of GDP per capita ($59, 100). For comparison sake, the USA occupies the 10th place.
·         For many years Norway has been called the world’s best country to live in (including the income level and the quality of education).

The Norwegians are not in a hurry to join the EU. They seem to be self-sufficient in welfare.
So it is not accidental that Norway is #1 in the rating of the most welfare countries (by Legatum, Oxford Analytica and Gallup World Poll Service).
There is a temptation to consider crude oil to be the main reason for Norway’s welfare. 10 years of high commodity prices and favorable economic situation… it seems to be not a “recourse curse” but a “resource blessing”.
Norway: a “northern heaven”

Of course, the global economic crisis affected Norway as well. However, as compared with many other countries, it came out of it relatively “unscratched”.
In 2009 the country’s economy declined 1.8% (for the 2nd time since WWII). The unemployment rate reached 3.5% (the record of the last couple of decades).
Many other developed countries cannot even dream about such results. The recession period was a brief one. Yet, the country’s economy seems to keep showing stable growth.
Norway remains one of the most successful countries in the world.
So it is interesting to know the reason for this Norwegian miracle as well as the factors that ensure the stability of its economy. These are some of them:
·         Abundant natural recourses. Norway is quite rich in natural recourses – crude oil, natural gas, iron ore, copper, zinc, nickel, uranium, silver, gold, titanium, fish, timber, hydroelectricity (the country comes 1st in terms of the production of electricity per capita).
·         Well-thought-out economic policy. The main peculiarity of the Norwegian economy is that it is mixed, i.e. it is the combination of the free market and governmental regulation including:
–          Considerable public sector employing every third citizen.
–          Strict bank regulation
–          Control over the country’s key economic sectors: crude oil production, fishing and agriculture. For example the government owns 71% of the shares of Statoil, which is the largest national oil company, thanks to which they can control 60% of the entire Norwegian oil and gas markets.
–          Well-developed industries, including shipbuilding, heavy engineering and others. But the way numerous waterfalls give Norway an opportunity to produce relatively cheap energy (99% of all the electricity is produced by hydroelectric power plants).
The gas and oil industry is still the basis of the Norwegian economy. However, Norway is one of the leaders in information technology (IT) and in terms of the production of pure energy (solar, wind and water energy).
Norway is among the most competitive economies of the world.
·         Export-oriented economy. Taking into account the fact that Norway’s domestic market is tiny, its economy is oriented towards exporting products and resources (for example Norway consumes only 5% of the gas it produces).
Almost 90% of the produced paper and cellulose is exported as well.
Norway exports fish to almost 140 countries around the world. By the way 90% of the salmon imported by Russia comes from Norway.
Norway is the world’s leading exporter of ostriches. It is not accidental that the Norwegian merchant fleet is the 5th largest in the world.
·         Norway’s small-scale and medium-scale businesses represent a considerable share of the country’s economy (99,6%). Over 70% of the working population is employed in the sector.
·         Favorable business environment. Norway can boast Europe’s best business environment. For example anyone opening his/her own business in Norway  can address the Norwegian Industrial and Regional Development Fund to get a free “development grant”.
As a businessman you don’t need to pay taxes until you gain your feet i.e. until your earn a certain amount of money.
It is easy to start a business. All you need is to send the necessary documents by mail and wait. By the way, it is very difficult to become bankrupt in Norway due to governmental support and affordable loans.
Norwegians spend least of all on licenses, registrations and customs formalities. The relations with tax service and other public institutions are absolutely transparent. The level of corruption is very low even though sometimes it seems that corruption and crude oil are inseparable.
·         Taking into account Norway’s fundamental position (it is one of the world’s most solvent countries) and good perspectives as compared to most Euro countries, numerous experts say that Norway may become a new “safe heaven” for many of those who invest in Europe. At least the Norwegian T-bond yield is slightly higher than the German one.
·         Tourism development. Even though the country is situated in the same latitude with Siberia and Alaska, Gulf Stream makes the Norwegian climate relatively mild. Moreover, according to the National Geographic Traveler, the Norwegian fjords currently present more interest for tourists than the Egyptian pyramids and the Great Wall of China:
Norway’s pristine environment, crystal lakes and rivers, blooming valleys and hundreds of ethnographic museums do make the country attractive for tourists from around the world (5-6M tourists a year). Norway is one of the best places for fishing and skiing.

Crude oil and natural gas.
Crude oil and natural gas industries provide 36% of the taxes and 51% of the export proceedings.
The oil wealth is distributed and used wisely. Here are the main distinctive features of the Norwegian energy policy:
In 1971 (or a couple of years after oil was found in the Norwegian part of the North Sea) the Norwegian parliament adopted a new energy policy based on the statement that the country’s natural resources (and crude oil in particular) should belong to the people.
They created a national oil-producing company. The Government Pension Fund of Norway was founded as well. This is the biggest pension fund in the world – $450B.
In reality it is not a pension fund but a fund created to separate sovereign wealth funds in order to ensure Norway’s high living standards when the oil reserves are exhausted (including the profit from oil exports… For example, Statoil gives 78% of its profit to the government).
It appears that the money gained from the Norwegian oil export is isolated from the country’s economy. The fund invests only in foreign securities from around the world (60% is invested in stocks, 40% is invested in bonds).
The country already owns 0.8% of the net amount of all the securities issued around the world.
Russia lent the idea of the Russian Stabilization Fund from Norway.
The Norwegian government spends almost no money for domestic needs (only 4-7% of the money is allocated for Norway’s budget spending). Of course not all the Norwegians like this “stinginess” because the country still has a lot of problems to solve.
The fund is under constant public control: oil companies are obliged to publish income, tax, bonus and investment reports, which are inspected by some international auditing firm.
Norway is mainly exporting oil products, which makes it possible to gain the max profit.
Before the crisis the investments in oil-and-gas sector were increased by 15%. This year the government is going to invest the record amount of $25B.
It appears that it would be ridiculous to regret being blessed with abundant reserves of natural resources. The thing is how effectively they are used and distributed.
Norway: a “social heaven”

Norway is referred to as a prosperous country. The average income is €4000, the average pension is €1500. Norway has managed to create almost a perfect social state with high social guarantees.
Thanks to the progressive tax scale, there are no poor people and almost no rich people. The government pays $5000 each time a child is born and then deposits a certain amount of money to his/her account every year.
The working day usually lasts from 8.00 till 15.00 (not more than 37hrs a week) as the Norwegians know that people need a good rest to work well. The unemployment benefit is paid for 2 years (2% of the previous income).
They also take care of their environment. The secondary and higher education is free. Students get scholarship. The medical service is also free. 9% of the budget is spent on healthcare.
If a Norwegian family spends €500 or more on medicine, the costs are compensated by the government. Norway is also a heaven for the old and retired.
In principle, this is a country of considerable social spending, so it should have been one of the first countries to fall prey to the global crisis. However, as we can see, it didn’t happen.
Skeptics say that Norway can afford spending big money on social benefits and guarantees (for example the population of Russian is 30 times as big as Norway’s one but the Russian oil deposits contain only twice as much crude oil as those located in Norway)
Norway spends only 1,9% of the national GDP on military outlays.

The peculiarities of the Norwegian mentality
The Norwegians are true patriots. They feel proud for their country, its nature and state system. They like to be useful to the society. That is why almost all of them are members of some clubs, parties and organizations.
The Norwegians are emotionally reserved, unhurried and sedate. That is why some foreigners say they can be boring. Most of them are honest and law-abiding. They are sporty and tolerant, self-respecting and self-sufficient.
The weak spots of the Norwegian economy.

In the light of all the above-mentioned the natural question arises: are there any problems in the Norwegian economy? In fact, there are some. Yet they are rather serious:
·         Resource-based economy. Crude oil and natural gas extraction remains the basis of the country’s national economy. Norway is dependent on crude oil even more then Russia.
The peak of oil production was reached in 2000. The production volume has been declining ever since. This year the volume is expected to decline by 6%. The old oilfields of the North Sea are being gradually exhausted.
The gas and oil stocks are overvalued by 20%. The companies have to develop hard-to-reach gas and oil fields, which proves to be much costlier.  Without oil export the country’s budget would be deficit-ridden. Some pessimists say that Norway’s oil deposits will be exhausted within a decade.
·    Severe climate, short vegetation period, short and cold summer and low fertility of the soil restrain the development of agriculture. Only 3% of the land is suitable for cultivation. Despite the generous subsidies the farmers get from the government, 60% of the consumed food is exported.
·   High taxes. Considerable budgetary spending and costly social security system cannot do without high taxes, which are nearly equal to 50% of the national GDP. The Norwegian taxation system is rather tough while the taxes are some of the highest in the world.
The average rate of the income tax is 28%. Most Norwegians spend over 1/3 of their monthly income on various taxes and duties. The taxes are progressive: those who earn over €4375 a month should pay an extra tax (9%), €7100 – 12%. The corporation tax is 28% (Gas and oil companies pay 50%). There are many other taxes and duties (gasoline tax, alcohol tax etc.). In return investors get high-quality service, modern infrastructure, transparency, stability and security.
·   Lack of skilled personnel. Norway constantly lacks qualified labor power, especially managers. The thing is that skilled workers need high salaries. That is why many companies employ less skilled specialists to pay less.
·    Catastrophic population ageing. The amount of the old and retired people in Norway is rapidly growing, which requires more social spending. The problem could be partially solved by attracting migrant laborers. But Norway’s emigration policy is very tough (one of the toughest in the world).
However, the number of emigrants grows every year. Over the last 10 years, 510.000 foreigners have received residence permits. The Norway authorities are afraid that the emigrants may exceed the critical amount.
So, does Norway really have chances to survive without crude oil? Yes, of course.
The country’s economy is quite diversified. Moreover, the Norwegian authorities know about their “Achilles’ heel” and are getting ready for the “post-hydrocarbon” period.

Note 1:  Extracted from kazinkas, Forex Market reviews

Note 2: Recently, a deputy in the parliament applied for the Palestinian BDS movement against Israel for Nobel Peace Prize.



‘Fake News!’: The View from Israel’s Occupation

Rebecca Stein. Feb 19, 2018

Among the numerous ideological affinities and governing styles shared by Trump and Israeli Prime Minister Benjamin Netanyahu is a commitment to the rhetoric of ‘fake news.’

In the last year, Netanyahu has increasingly borrowed this Trump formulation in an attempt to quell dissent and undercut critical Israeli and international media scrutiny.

Netanyahu is not unique in this regard. Over the course of the last year, authoritarian regimes across the globe – including Syria, Russia and Malaysia – have adopted the fake news script to silence detractors and critics, frequently in response to the charge of human rights violations.

But while the global scale of this accusation may be unprecedented, charges of fake news have a long history, considerably preceding the Trump era.

In Israel, the accusation of fraudulence, employed against political critics and foes, can be traced to the onset of the Zionist settler-national project.

As post-colonial studies show, the repudiation of indigenous claims (to history, land, humanity and so on) was a foundational logic of colonial projects, enabling the violence of colonialism in its various forms.

This formulation was also at work in the history of Zionism and has had a lasting hold on dominant Israeli ideology.

Over the course of the last two decades, amidst the ascendance of nationalist extremism in Israel, the fraudulence charge has grown ever stronger among the Jewish right-wing public as a popular means of indicting critics and undercutting Palestinian claims, particularly where Israel’s military occupation is concerned.

Mohammed al-Dura

Video footage of Israeli state violence against Palestinians has been a favorite target of this accusation – footage shot by international journalists and human rights workers and increasingly, as cameras have proliferated in the West Bank, by the cameras of Palestinians living under occupation.

It was in the language of fake news that Israelis famously responded to the killing of 12-year-old Mohammad al-Dura by the Israeli security services in 2000, in the early days of the second Intifada.[1]

His killing was filmed by French television and was replayed around the world in the aftermath of the event, becoming no less than a viral global icon of the Israeli military. What ensued was an organized campaign by the Israeli right wing, and their international supporters, to debunk the images as fake.

Netanyahu convened an Israeli government committee of inquiry in 2012 to investigate the incident, and the committee eventually endorsed the popular discourse of fakery, blaming manipulative editing for falsely producing the damning images.

The state committee did more than exonerate the Israeli security services in al-Dura’s death; indeed, they argued that he was Not actually dead.

Right-wing Israeli newspapers put it succinctly in their headlines: “Mohammed al-Dura: The Boy Who Wasn’t Really Killed.” Pleas by the al-Dura family to exhume the boy’s body were declined.

The state committee did more than exonerate the Israeli security services in al-Dura’s death; indeed, they argued that he was not actually dead.

Despite the Israeli response to the al-Dura affair in 2000, it would take nearly two decades for this argument about Palestinian fakery to become commonplace where video evidence of Israeli state violence is concerned.

By 2014, amidst the ascendance of far-right politics in Israel, and the threatening spread of cameras among Palestinians living under occupation, the argument finally gained a mainstream foothold.

Footage from Bitunya

For example, the charge of fake news would predominate in Israel following the killing of 2 Palestinian youths in the West Bank town of Bitunya in 2014, fatally shot by the Israeli security services during an annual demonstration commemorating the Nakba.

The military denied responsibility, claiming that their forces had only used non-lethal rubber bullets that day, in compliance with regulations governing engagement in protest contexts.[2] But the scene had been filmed by numerous on-site cameras, including four security cameras, and those of CNN and a Palestinian photojournalist.

The Israeli human rights organization B’Tselem took on the case, believing that the unusually high volume of associated footage conclusively established military responsibility for the deaths.

But mainstream Israelis felt differently, and the volume of footage from Bitunya did little to persuade them of the military’s responsibility. To the contrary, the videographic evidence fueled a widespread repudiation campaign.

State actors and institutions were among the first to join the fake news chorus, including the defense minister, the foreign minister and official military spokesmen.

All argued that “the film was edited and d[id] not reflect the reality of the day in question.”

Their assertions were parroted by the national media, who insisted that the shootings were “staged and faked.” That accusation was then picked up by right-wing Israelis and supporters internationally.

Some focused on the image of the falling body, arguing for its self-evident theatricality (yet another case of what some called “Pallywood” – the purported Palestinian Hollywood-like industry in manufactured images of Palestinian victims).

Others claimed there was a lack of adequate blood in the footage, proof that the victim had not been killed. Most proponents of the fraudulence charge did not dispute the deaths themselves, as they had in the al-Dura case, but focused on exonerating the IDF through a re-reading of the footage, arguing that the bullets had come from other sources.

The charge of fraudulence haunted the case as it wound its way through the Israeli legal system. The Bitunya case established the fake news charge as a default Israeli script for responding to video-graphic evidence of state violence against Palestinians.

A few months hence, during another violent Israeli military incursion into the Gaza Strip, Prime Minister Netanyahu would famously rehearse a variant of this discourse when he accused people in Gaza of performing their deaths for the media: “They want to pile up as many civilian dead as they can. They use telegenically dead Palestinians for their cause.”

The language of “fake news” had moved from the margins of the conspiratorial blogosphere to become the language of state – presaging a dynamic that we would watch unfold in the US in the Trump era, a few years hence.

High Stakes

For Israelis who support the fake news accusation, the stakes are considerable – just as they are in Trump’s America for those who parrot this rhetoric. In the Israeli context, these accusations aim to protect the image of Israel by stripping Palestinian victims and Israeli perpetrators from the videographic scene of the alleged crime – and to do so in a way that removes all traces of repressive Israeli military rule and its histories.

The charges of fraudulence, forgery or Palestinian theatrics are an attempt to correct the record, to right the wrongs done by a libelous Palestinian public that is intent on Israel’s defamation by means of fictive image-making – or so many believe.

In this way, the discourse of fake news is just another tool in the Israeli struggle against the so-called existential threat.

[This article was originally published in Middle East Report (Issue 283).]

[1] Adi Kuntsman and I explore this in more detail here.

[2] For a more detailed discussion of this case, see Stein, “GoPro Occupation: Networked Cameras, Israeli Military Rule, and the Digital Promise,” Current Anthropology 58/S15 (February 2017).




February 2018

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