21 Feb 2010

How will pension be worth in Norway?

In order to safeguard and build financial wealth for future generations Stortinget (Norwegian Parliament) resolved the National Insurance Act (Folketrygdloven) in 1967, which established National Insurance Scheme Fund (Folketrygdfondet). This fund has been supporting governmental savings for financing national insurance pension expenditures since establishment and follows until nowadays. Meanwhile, in 1990 Stortinget adopted the Act relating to the Government Petroleum Fund (Oljefondet), which gathers income generated by Norwegian petroleum sector and its main purpose was to counter the effect of the forthcoming decline in income and smooth out the disrupting effects of highly fluctuating oil prices. The petroleum income comes from taxes of companies related to petroleum sector as well as payment for license to explore, State’s Direct Financial Interest (About SDFI)and dividends from partly state-owned and the biggest offshore oil and gas company in the world - Statoil (About Statoil). In January 2006 both funds were combined and one Government Pension Fund of Norway has been existing since that year. This is sovereign wealth fund (About SWF), which means that it is a state-owned investment fund composed of financial assets such as stocks, bonds, real estate and other financial instruments funded by forex assets. The Government Pension Fund comprises two separate funds right now:

- The Government Pension Fund - Global (Statens pensjonsfond utland - SPU, formerly Petroleum Fund)
- The Government Pension Fund – Norway (Statens pensjonsfond Norge – SPN, formerly The National Insurance Scheme Fund)

The unified purpose of The Government Pension Fund is to facilitate government savings to meet the rapid rise in public pension expenditures in the coming years and to support a long – term management of petroleum revenues. From this moment the total income of new Fund consist of not only petroleum activities but also of the return on the Fund’s investments. The investments decisions are made by Norges Bank Investment Management (NBIM), which is a part of the Norwegian Central Bank on behalf of regulations laid down by the Ministry of Finance. NBIM manages the Fund partly internally and partly by engaging external managers and whole responsibility is taken by Ministry of Finance. Every morning goatee-bearded chief executive Yngve Slyngstad (About Yngve Slyngstad) heads to his office at the top floor of Norwegian Central Bank and checks how his Fund is doing. It’s doing very well! In 2009 the Fund had a record return of 25,6% and is the largest Fund in Europe (1,78% of listed European companies) and second in the world (1% of the world’s shares) just after the largest pension fund in the USA (California Public Employees’ Retirement System – CaIPERS). In 31 December 2009 the total value of the Fund was NOK 2.640 trillion ($457 billion), which is enough to cover 25 times polish budget deficit for 2010.

Why does it look so good?

First of all, petroleum sector income – Norway is third exporter of oil and gas (after Saudi Arabia and Russia) in the world. Second, active management. This means long-term investments (30-year horizon), stressed markets, risk-return trade-off as well as economies of scale, targeted strategies and high quality Norwegian organisation. Within active management they use three main strategies: ensure efficient market exposure, create value through fundamental analysis and management of systematic risk. In 2009 equities made up 62.4% of the Fund’s total investments and fixed income instruments constituted 37.6%. This 62.4% is a high level of exposure to the highly volatile and therefore risky non-Norwegian stock and money market, because they don’t want to overheat their domestic economy. Since 2009 they have presented also in Poland (one of the 46 developed and emerging equity market), which makes me feel better, because I support their policy carried out among companies they own stakes (more than 8 300 companies):

- Equal treatment of shareholders
- Shareholders influence and board accountability
- Well-functioning, legitimate and efficient markets

And what sounds paradoxically for a fund based on oil and gas revenues they care about green issues such as climate change, water management and even children’s rights. Although their activism is limited to encourage better social and environmental standards at companies by publication of number of documents explaining how companies should manage, their ideas is honorable in my opinion. Another issue, which makes me feel better is the Fund’s ethical stance. Since 2006 they haven't invested in companies involved child labour, violation of human rights, the production of tobacco, nuclear, chemical and biological weapons. In year mentioned above they kicked out nearly 30 companies, which met these criteria e.g. US retail giant Wal-Mart, because of its labour policies.
The last question I would ask is why they need so much money for almost 4,9 million Norwegians? Whether government should use some part of the petroleum revenues for e.g. the state budget instead of the funds for the future? They speculate this would increase inflation, so they should discuss what degree of these revenues they may use for government spending. In 2009 the government used 5% of GDP from Oljefondet to boost the economy by the state’s national budget. In February 2010 CPI in Norway was about 2,959% and it was increase from about 2,544% last year.
For more performance of the Government Pension Fund – Global see this report.

14 Feb 2010

You are what you eat

That means that if you want to feel like Norwegian, eat Norwegian food! What is this Norwegian cuisine actually? How do these dishes taste, prepared from raw materials available in Norwegian mountains, wilderness and coast? Some cuisine specialists reckon that Norwegians have lack of savor. Truly, their sources of raw materials are very limited and their cuisine bears the marks of globalization such as pastas, pizzas, meatballs etc. But, I disagree that they have lack of savor. From fish, sea fruits, potatoes as well as reindeer and elk meat, you can make a masterpiece of delicious cuisine. Of course, you can add some global ingredients such pasta, sauces from Poland (a must in my cooking), onion from Netherlands etc., just to improve your dish.
I usually start my day with cup of coffee or tea and something light like cornflakes with milk or scrambled eggs with pieces of røkt laks (smoked salmon). When I don’t have a time or milk then I often eat Wasabröd (creasp bread, well-known in Poland) with a fish paste from tube called “Kaviar” or with slice of brunost (brown cheese made from goat’s milk). Believe me, I usually don’t have time, so scrambled eggs are occasional.
Lunch. I often do it between 1 p.m. and 4 p.m. This time a have more time to prepare something valuable. It’s all depends on my imagination and fancy. Sometimes I do something simple such as smørrebrød, which is nothing like open sandwich consisted of bread with spread mayonnaise and whatever you want on the top. Originally smørrebrød was born during industrialism in Denmark. When people started to work outside their farms and brought leftovers with bread to have for lunch at work. My “leftovers”, which I put on Wasabröd, include fish or reke (shrimp) paste, salami or paté from Poland, brunost or gourmet reindsyr (sausage from reindeer) and the spicy ketchup on the very top. Yummy! If I want something warm to eat for lunch and I don’t expect later kisses with my beloved fiancé Monika, I'll eat fried reke (shrimps) with garlic sauce and garlic self-baked rolls (bought ready to bake), using only my fingers.
Diner. I very often eat with my Dutch roommate Barend at Dutch time somewhere in the region of 6 p.m. Diner always supply our stomachs with heavy load of food. We like surprise each other but the longer we live together the more we know about our surprises. He knows very well how taste luscious fried laks (salmon) with French fries and boiled carrot prepared by me. There is also no more surprise if I prepare own invented food - penne (famous Italian pasta) with broccolis, appetizing surimi fingers and Carbonara sauce. Yum – yum!

7 Feb 2010

Snakker du norsk?

As I mentioned before, you can hear three official languages in Norway at once. The Norwegian Language Council approved two languages - Norwegian Bokmål and Norwegian Nynorsk. Sámi is a language of indigenous Sámi people, which are protected by law. While Bokmål and Nynorsk are regarded as Scandinavian Languages, Sámi is a group of Uralic languages. To make the life for foreigners more difficult, the most Norwegians speak their own dialect in all circumstances. But if you have a good command of Norwegian, you will be able to understand Danish, Swedish or even Icelandic. Great! I wish I could understand my Czech, Slovakian, Ukrainian, Belarusian and Russian or even one of these: Bulgarian, Macedonian, Croatian, Bosnian, Slovenian and Serbian fellows. The life in Slavic world not suppose to be as easy.
Move on, back to Norwegian, for Norwegians the dialect makes up an important part of their identity, and by listening to a person's dialect they can in most cases determine with good accuracy from which part of the country he or she is from. Scandinavian Languages developed from Old Norse language. Vikings were the ones who spread this language across the Europe and even into far Iceland and farer Greenland as well as deep Russia, making Old Norse one of the most widespread languages for that time. Christianity’s contribution into Old Norse around 1030 was Latin alphabet. Almost 150 years Norway was unified with Denmark and Sweden under Kalmar Union established in 1397, which means that the language in this union didn’t varied very much. Furthermore, between 1536 and 1814 Norway was subordinated under the Kingdom of Denmark – Norway, so Danish was commonly used by Norway’s literate class. After the end of this Kingdom the Dano-Norwegian koiné (About koiné language) had became the mother tongue of Norwegian elites. In short time Norway was forced to enter a personal union with Sweden. This time Norwegians wanted to declare their independence, they even proclaimed a constitution in Syttende Mai (17 May 1814), which day is now called Norwegian Constitution Day and is celebrated every year.
In order to show Norwegian sovereign the nationalist movement started to exist and its action was directed, among others, towards the development of independent Norwegian language. The movers had to choose one of three paths due to develop independent language:
(1) Do nothing (remained with Danish, which was already different from Swedish)
(2) Norwegianise Danish language
(3) Build a new national language based on local dialects.
They went through all three paths. Some movers did nothing, Knud Knudsen (About Knud Knudsen) tried to Norwegianise Danish using Dano-Norwegian koiné and Ivar Aasen began to create a new Norwegian language. Ivar was the most stout-harted, he traveled around the country and spoke with locals, examined Icelandic as well and the fruit of his labor was Landsmål (About Landsmål), meaning national language. Nowadays, Landsmål is interpreted as farmers language, which wasn’t Ivar’s previous intention. As an effect of Knud Knudsen work Riksmål (About Riksmål) did borned, which means state language. In 1929 Riksmål was officially renamed to Bokmål (Book Language) and Landsmål to Nynorsk (New Norwegian).

Today, the majority of the people in Norway are using Bokmål (85-90% of the population in Norway). But in areas in the Northwestern part of Norway and in the very south, Nynorsk is used (above 10% Norwegians use it as their primary written language). However, it should be noted that Bokmål and Nynorsk are not classified as two different languages where you have to learn the other as a foreign language. In short one could say that they are more two different written norms. Thus, text written in Bokmål is perfectly understandable for a person using Nynorsk, and vice versa. What is more, it exists also a conservative version of Nynorsk called Høgnorsk (High Norwegian) and in Norwegian language courses they taught foreign students Standard Østnorsk (Standard East Norwegian). Great! If you really want to develop on the languages field, come to Norway!

Let’s have a good start, here you can find survival phrases with pronunciation (just click on the word, it's working in IE):

(1) Total basic for dummers:
Ja. Yes.
Nei. No.
Vær så snill. Please.
Takk. Thank you.
Vær så god. You're welcome.
Unnskyld. Excuse me.
Beklager. I am sorry.
God morgen. Good morning.
God kveld. Good evening.
God natt. Good night.
For greetings they usually say: Hei or Hei hei.

(2) A bit more for advanced students:
Snakker du engelsk? Do you speak English?
Finnes det noen her som snakker engelsk? Does anyone here speak English?
Jeg snakker bare litt norsk. I only speak a little Norwegian.
Hva heter du? What is your name?
Jeg heter Kari. My name is Kari.
Hvordan har du det? How are you?
Takk, jeg har det bra. I'm fine, thank you.
Det er så hyggelig å treffe deg. I am very glad to meet you.
Jeg forstår ikke. I don't understand.

For Norwegian courses visit e.g. NorskCarolina.

1 Feb 2010

Try to find your car in Norway

Ole and Lena were sitting down to their usual cup of morning coffee listening to the weather report coming over the radio:
- There will be 3 to 5 inches of snow today and a snow emergency has been declared. You must park your cars on the odd numbered side of the streets.
Ole got up from his coffee and replies - Jeez, OK.
Two days later, again they both are sitting down with their cups of morning coffee and the weather forecast is:
There will be 2 to 4 inches of snow today and a snow emergency has been declared. You must park your cars on the even numbered side of the streets."
Ole got up from his coffee and replies - Jeez, OK.
Three days later, again they both are sitting down with their cups of coffee and the weather forecast is:
There will be 6 to 8 inches of snow today and a snow emergency has been declared. You must park your cars on the... and then the power went out and Ole didn`t get the rest of the instructions. He says to Lena:
- Jeez, what am I going to do now, Lena?
Lena replies: - Aw, Ole, just leave the car in the garage.