Norway

IV

Economy

Norway’s gross national product (GNP) was US$237,845 million, in 2006 yielding an income per head of US$68,440. Although the Norwegian economy is based on free enterprise, the government exercises a considerable amount of supervision and control. The country’s large merchant fleet remains of great importance to the economy. The 20th century was a period of great industrial expansion for Norway, based primarily on extensive and inexpensive energy from hydroelectric power resources, but also aided by the exploitation of offshore oil resources. The country has one of the highest standards of living in the world; the estimated gross domestic product (GDP) per capita in 2006 was about US$71,874.50. The national budget in 2006 showed US$168,850 million in revenue and US$107,523 million in expenditure.

A

Agriculture, Forestry, and Fishing

Agriculture accounts for an estimated 4.4 per cent of the annual Norwegian GDP. The number of agricultural holdings dropped by more than half to 85,000—comprising mainly smaller holdings of 200 hectares (500 acres) or less—between 1950 and 1966. Because of the mountainous terrain and poor soils, less than 3 per cent of the total land area is cultivated. Grains are grown in the Østlandet and the Trøndelag. The Vestlandet and Nord Norge specialize in livestock-raising and dairy-farming. The leading crops (2006 production in tonnes) are barley (552,400), potatoes (376,043), and cereals (1,228,900). Norway has approximately 2,356,152 sheep, 920,416 cattle, and 827,489 pigs. The country is self-sufficient in many agricultural products, but some grains, fruits, and vegetables must be imported.

The Norwegian forestry industry accounts for a relatively small proportion of Norway’s yearly GDP and of the country’s annual exports. Forestry is concentrated in the Østlandet and Sørlandet, where 60 per cent of the productive forestland is located. Most forestland is owned by private individuals; state ownership is important only in Nord Norge.

The fishing industry provided 7.2 per cent of total export revenue in 1995. Since the early 1970s, fish-farming (particularly salmon and sea trout) has been intensively developed by the government. Norway ranks as one of the world’s leading fishing nations, and the large motorized fishing fleet has expanded its catch area to the banks off the coast of the island of Newfoundland. The total yearly marine catch in 1995 was about 3 million tonnes. Important species caught include cod, blue whiting, Norway pout, mackerel, herring, prawns, and other fish. Whaling is also carried out; in 1993 Norway lifted a 1988 ban on fishing minke whales, arguing that the species was not threatened; 217 whales were caught in 1995. In 2000 the ban on exporting whale meat and blubber was also lifted.

B

Mining

Before offshore drilling for petroleum began in the 1970s, mining was relatively unimportant in Norway. The country is now western Europe’s largest producer and the sector accounts for up to 13 per cent of GDP; the percentage in any given year depends on world petroleum prices. Petroleum production began on a trial basis in 1971. In 1974 a pipeline was completed to carry crude oil to Teesside, England. In 2004, annual crude petroleum production was 2,846,077 barrels a day; natural gas production was 73.4 billion cu m (2,592 billion cu ft). Natural gas is piped to both Scotland and Germany. Other mineral products include iron ore (408,000 tonnes, 2004 estimate), zinc (12,000 tonnes, 1999 estimate), copper (2,700 tonnes, 1998 estimate), and nickel (181 tonnes, 2004 estimate). The largest iron ore mines are located at Sydvaranger near the border with Russia. All the coal is mined in the Svalbard Archipelago.

C

Manufacturing

The manufacturing sector accounts for about 9 per cent of the yearly GDP of Norway. The electrochemical and electrometallurgical industries form the most important manufacturing sector. These industries need an abundance of inexpensive electrical power, which Norway can supply. Although all raw materials for the country’s aluminium industry must be imported, Norway produces about 4 per cent of the world’s supply of refined aluminium. It is also an important producer of ferroalloys.

Norway has traditionally been a major shipbuilding nation, but its share of the world’s new tonnage is now less than 1 per cent. Shipbuilding declined dramatically after the late 1970s as the industry encountered financial problems; many shipyards have since shifted much of their capacity to the production of equipment for the offshore oilfields and gas fields. Other major manufactures include machinery, pulp and paper products, textiles, confectionery, and other food products. The country has several petroleum refineries and a major integrated iron and steel plant at Mo, which is situated near the Arctic Circle.

D

Energy

In the early 1990s Norway obtained 72 per cent of its total energy requirements from electricity, 21 per cent from petroleum, and 7 per cent from solid fuel and natural gas. Annual electricity production is more than 106 billion kWh, nearly all of which is generated by hydroelectric power stations, making Norway one of the world’s leading hydroelectricity producers. Estimated hydroelectric power potential is 170 billion kWh. Several agreements have been made on gas exports, and Norway provides a substantial proportion of Western Europe’s gas supply.