Entangled Alliances

Oslo Fjord

I know what you’re thinking. In the midst of all this talk of an economic crisis, the G20 and accompanying protests and police brutality, and Brown’s recent trip to the US (for which he received a DVD box set, not even the correct region – poor Gordon), we’ve lost sight of our priorities. The crucial question that everyone’s dying to have answered is this: how’s Norway getting on?

The answer, Norway  fans, is not too shabby. The country is faring a lot better than many other European countries, particularly thanks to its oil wealth. Unemployment, traditionally very low, is still only 3.5%.The base rate is still at 2.5%, far higher than the UK and the Eurozone, where central bank lending rates are at 0.5%. This is not to say, however, that Norway hasn’t been impacted by the credit crunch: that base rate is still 325 basis points lower than October 2008, and the value of the Norwegian government’s domestic $12bn pension fund (supported by oil wealth) fell 25% in 2008, although the far larger “Global Pension Fund”, at some NOK 2.12 trillion (about £200mn), may well be more resilient. They must be pretty pleased they reduced the proportion of that pension fund held in global stock markets in August last year from 60% to 50%…

Coffee, Scone and Jam

I visited Oslo in February, on a slightly impulsive Ryanair detour back from Verona (sorry environment!) Perhaps I’m generalising, as I didn’t go outside the capital, but Norway really is a fascinating place. I was only there for a day and a half, and Oslo is a fairly small city by UK standards, but that provided plenty of things of interest. There was always fresh snow on the ground and a top-notch coffee shop just around the corner – and just as well: Norwegians drink more coffee per head than anyone else in the world. This particular one, just behind the lightly-guarded royal palace, served freshly brewed ethical coffee and chunky scones with walnuts, accompanied with a large glass of jam and copious amounts of butter for about £3.50, a bargain in Norway. Unfortunately it was such a bargain, and so warm inside thanks to the log fire, that I had two, which rather reduced the cost-effectiveness… The newspaper was interesting, too; I couldn’t understand a great deal of it (obviously) but at least the first four pages of a fairly small newspaper were devoted to commentary and opinion.

There are two things which are almost universally known about Scandinavia: it’s pretty cold (in winter at least) and pretty expensive, particularly alcohol. Both of these facts held true while I was there. Thanks to my inappropriate choice of clothes and having flown in from balmy northern Italy, I was especially affected by the former, and my advice (although it should be pretty obvious) would be: hats, gloves, shoes and thermal underwear. It was actually so cold that the buttons on my phone stopped working.

Norway from the train

As for cost – yeah, it is expensive. I chose to get the £45 train rather than the £30 coach from the Sandefjord/Torp Airport (typically Ryanair, labelled as Oslo, but actually 1½-2 hours away). However, due to a sudden snow fall, the train wasn’t running so we had to get a rail replacement bus. Regular travellers of UK railways will be well acquainted with the rail replacement bus, but despite the more extreme weather in Norway it’s pretty unusual there, and a lot more comfortable – a double-decker luxury coach with bags of space. This meant that it took slightly longer to get into the city, but it also meant that my ticket didn’t get stamped – so I cunningly got a refund from the station the next day. I also managed to wangle a student ticket on the way back using my Union card which doesn’t have an expiry date, so the whole £45 journey cost me about £16! Hurrah! My hostel then cost about £25 for the night (including sheets and a towel – lots of Norwegian hostels tack on an extra £5 for this privilege). This turned out to be slightly more expensive, however, as bizarrely someone stole my dirty clothes.

Slottet (Oslo's Royal Palace). You can walk right up to it; it's in the middle of a park. There aren't even bars on the windows.

On the rail replacement coach from the airport I also started talking to two incredibly friendly girls – well, they started talking to me, I obviously had a pretty confused look on my face. It turned out they were both in the Baha’i faith, and they proceeded to explain what that meant (basically: let’s all just chill out and be nice to each other, yeah?). They’d flown in from Frankfurt where they’d been at a Baha’i conference. Only one of them was actually Norwegian, the other was a Texan studying international health, I think – it turns out it’s sickeningly cheap to study in Norway: £30 a semester, for a Masters. What an awesome country. The conversation turned to how one of them had received a pretty grumpy and unsympathetic reception from a customer services assistant at the train station in Oslo – the American girl suggested it was because it was a socialist country, and so people felt it was the government’s responsibility to take care of people, rather than every individual to one another. (So does government replace community, or is it in an expression or community? Or perhaps it was just a single anecdote which didn’t actually mean anything)

Downtown Oslo

Beer is certainly pricey in Norway, a 300ml bottle in a bar in the trendy Grünerløkka neighbourhood cost me about £4.50. It was pretty busy for 2230 on a cold Monday night. While I was in that café I asked a middle-aged (it turned out, retired) woman why it was so expensive? I mean, everything seems more expensive in Norway (they’ve got a 25% sales tax) but particularly alcohol. She answered the question as if it wasn’t that big a deal, and said that it was probably partly due to the difficulty of transporting things to such a remote place. While this is true, it’s only half the answer, and the other part comes down to that scourge of pub landlords across northern Europe: excise duty. Norway has some of the highest rates of taxation on alcohol in the world, at €200 per hl3, more than double that of Ireland and the UK, and its neighbours Sweden and Finland. According to this guy, that makes a bottle of Absolut Vodka €37, €31 of which is pure tax. There are probably a number of reasons for this: the necessity of having high rates of productivity, especially in the postwar environment; strong protestant morality; and combating drunkenness and alcoholism. The latter is really difficult to avoid in a country like Norway which has very hard and psychologically challenging winters, and it seems as though the UK is to a certain extent following down the same path of trying to regulate alcohol consumption via price rationing. But as Ed pointed out in a post on this blog not too long ago, this seems to be a really poor way of going about it. The real problem comes not from a quiet drink in a sociable, supervised and regulated environment like a pub. It actually comes from buying cheap, strong alcohol in supermarkets and (to a lesser extent) off-licenses, and then drinking it in the street or your own home. Surely a better way of going about it would be to lower alcohol taxation in pubs, which in the UK are seriously feeling the strain at the moment, and commensurately increasing the taxation in off-licenses. (How about this interesting fact: almost half of all alcohol consumed in Norway is consumed by just 10% of the population.)

Storting (Norwegian Parliament). Opens around 9ish, closes when business is done. The Monday I was there, that was before 1300.

In the current economic recession, Norway’s not faring too badly, partly thanks to the fact that it is blessed with substantial quantities of oil and a relatively enlightened, forward-thinking political class. While Britain sold off its stake in North Sea oil long ago and spent its revenues as soon as they entered the Treasury’s coffers, Norway set up an oil fund in the early 1990s to provide pensions for the elderly and help ease the transition after oil revenues peaked. That fund has now reached some $200 million, and although it has been hit by the global downturn, as only 50% of it has been placed in relatively safe (and highly ethical) investments, it’s not doing too badly. Additionally, its banks have been less exposed to the risky loans and dodgy financial instruments which have wreaked such havoc in the UK and elsewhere. This is likely as a result of more conservative business instincts in the country, but it also stems from a unique 1961 law which states that any commercial bank with assets over £10 million has to have a quarter of its board members appointed by the government, and a responsibility to operate their business not just in a sound economic way, but also with regard to their social impact. On first impressions this seems quite radical, but it isn’t really: when banks have such a large responsibility for citizens’ savings, those citizens should play a part in the operation of the banks. It’s not that dissimilar from the mutual model which has proven to be relatively resistant to the shocks imposed by the current economic turmoil.

9th and 10th Century Viking Swords, in the History Museum. Norway is famed for its child-friendly museums

Nevertheless, like any country, Norway is no paradise; problems do exist. The retired woman I met in the scones and coffee café behind the royal palace used to work in the public healthcare sector, and said that there were increasing problems there, particularly surrounding the cost of treatment. In Norway there is a fixed fee that you have to pay each time that you go to the doctor. This may seem sensible, but it’s actually a really ineffective way of reducing unnecessary treatment, as well as being tremendously inefficient for the healthcare system as a whole; people put off going to see their GP for 10 minutes and instead only go to the A&E room when it becomes much more urgent – and, of course, much more expensive. A similar system is used in the UK with prescription charges, which bring in some £450 million, a figure that is set to significantly decrease following Gordon Brown’s October announcements on abolishing prescription charges for cancer sufferers, and those with “Long-Term Conditions”, a list which is almost impossible to define and ends up being almost entirely arbitrary.

Another problem, particularly in Oslo, is the cost of living which is amongst the highest in the world. That OAP in that café (it would have been much easier if I knew her name…) said that even with her relatively good pension from the healthcare system and the additional pension from the oil fund, she wasn’t left with a great deal of disposable income after paying her rent.

Nobel Peace Centre - Prizewinners Field

To a large extent, these are problems that most other countries face. Aside from that, Norway is a fairly unique place. It has a liberal political system with a strong belief that it owes a considerable debt to the world – and not because it’s ashamed of any imperial past; after all, it has none to speak of (unless you go back to the Vikings…). Rather, the debt appears to be quite simply because they’ve been fortunate and others haven’t. Accordingly, Norway gives 0.95% of its GNI annually in overseas development assistance, and plays host to a range of humanitarian, human rights, and peace-building organisations, including most notably the Nobel Peace Prize. They’re rather proud of this one in particular, in fact, and have an excessively interactive museum to show it off, including this fibre-optic field of prizewinners; the screens light up and jump around when you walk near them. (Actually, quite a few of them don’t – but nice try, Norway.) My student ID which worked so smoothly on the train back to the airport later that day hit a rough patch at the Nobel Peace Centre, as the man behind the desk correctly noticed that there was no expiry date – he asked if I had any other ID and I showed him a book I had, which seemed to work OK! As part of the museum was closed for refurbishment, I also got in at half price, so what should have cost £8 actually cost £2.50, another bargain!

So at the end of my brief stint in Norway, the view I came to was this: pretty cold, quite expensive (unless you have student ID), but fascinating, friendly, and really well worth a visit – probably more than a day and a half, next time! I’d need to read more into the Scandinavian model before I give it my sign of approval, and the level of alcohol taxation seems a bit excessive, but any country which serves such high quality coffee and has such friendly, liberal people seems like it’s on the right track.