Norway
Basic information
- Area: 385,252 km²
- Calling code: +47
- Population (EST): 4,777,100
- Official language: Norwegian (Bokmål and Nynorsk)
- Time zone: CET (UTC+1)
Overview
Norway is situated in northern Europe, sharing borders with Sweden, Finland and Russia and has a relatively small population of approximately 4.5 million people. It remains the only western European country apart from Switzerland not to be a member of the EU, having voted against joining in referenda held in 1972 and 1994. However, Norway is a member of the European Free Trade Association (EFTA) and, under the terms of the agreement on the European Economic Area (EEA), benefits from free trade agreements with the EU and remaining EFTA countries of Iceland and Liechtenstein. In the IMD World Competitiveness Scoreboard 2002, which assesses 49 countries from around the world on factors such as economic performance, government efficiency, business efficiency and infrastructure, Norway is ranked in 17th position.
Economy
Norway has an open economy, which due to the limited size of its population is relatively small by Western European standards. Figures from the OECD show that Norway's GDP stood at $190.5 billion US for 2002. However, GDP per capita is among the highest in the world. The government welcomes foreign investments, although there are some restrictions concerning public service industries and the ownership of natural resources. Investment is particularly encouraged in the petroleum industry, high technology projects, and projects in remotely populated regions. As is the case in numerous OECD countries, the importance of the manufacturing industry has decreased during the past few decades, while the service sector has expanded. According to Norway's Ministry of Finance, the service sector accounts for more than half of the country's economy, while in 2001 activities linked to petroleum accounted for 23 per cent of GDP and manufacturing for about 9 per cent. The oil industry has become crucially important to Norway's prosperity and production levels of oil increased fourfold between 1980 and 2000. However, the government has been seeking to reduce dependence on oil by increasing diversification. The country's manufacturing sector includes several significant industries such as shipbuilding and offshore platform construction, the production of electrical goods and power-intensive industries, such as industrial chemicals, metals production, and wood processing, which provide a significant proportion of the countries exports. Norway is also the world's third biggest exporter of oil, after Saudi Arabia and Russia. Norway's most important trading partners include the Nordic countries, Germany and the UK.
Infrastructure
The country benefits from good public transport systems within its main towns and cities. However, a recent report published by the Norwegian Centre for Transport Research, indicates that the present quality of the country's transport infrastructure does not provide efficient and economically viable access to domestic and international markets. This situation is set to improve however, with significant investments being made in a variety of projects. For example, the country's state-owned railway operator, NSB, has recently invested heavily in new rolling stock and upgrading the system's infrastructure. Norway has the advantage of modern and highly developed telecommunications systems. The country's land-based telecommunications network is completely digitised and Norway is at the forefront in the development of fibre-optic cable systems and ISDN communications. Figures published by the OECD for 2001 also show that Norway has one of the highest proportions of mobile phone users of any country in the world, above Japan, the US and the OECD average. In addition, according to a Eurobarometer survey published in February 2001, Norway is among the world leaders in internet use per resident, ahead of countries such as Denmark, Finland, France, Germany, Ireland and the UK. The Science and Technology Indicators report for 2002, produced by the Norwegian Institute for Studies in Research and Higher Education, shows that technological research institutes have the largest operating income of all research institutes in the country, accounting for approximately 51 per cent of the total. Agricultural and Fishery research institutes account for about 25 per cent of the total, while Social Science research institutes and Environment and development research institutes account for 14 per cent and 10 per cent respectively.
Business Costs
Norway's tax system is neutral toward foreign and local investments. Earnings of foreign subsidiaries in Norway are taxed at ordinary corporate tax rates, which are levied at a flat rate of about 50 per cent on undistributed income. Businesses operating in less populated parts of the country benefit from a reduced payroll tax schedule. According to the annual economic survey of the Norwegian economy, published by the OECD in 2001, Norway's tight labour market has resulted in faster rising wages than in the "euro-zone" countries.
