The Government Pension Fund Global (GPFG) in Norway

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This case has been proposed and commissioned by Philipp Weckherlin, to showcase best practices
in policy making from around the world

IN BRIEF: The sudden access to wealth from natural resources is known to cause a number of challenges to the host country. It can be destabilised by an abrupt, volatile and finite source of Revenue and/or be misled to act unsustainably with this inherited asset/fortune. When oil production started in Norway in the early 1970s, the government was aware of the risks to the domestic economy. From an early stage, the government worked to find measures that would allow the sustainable and long-term management of petroleum assets and revenues, creating Wealth that would outlive the period of oil production.
To this end, Norway established in 1990 a sovereign wealth fund – the Government Pension Fund Global (GPFG). The fund has had a positive impact in allowing the government to manage oil assets and revenues sustainably, while saving and creating wealth for future generations. Fiscal policy and investment guidelines have continued to develop over the years. Currently, Norway’s GPFG is the largest such fund in the world.
The key difference of GPFG with other similar funds is that it effectively allows to convert oil assets into an investment portfolio, allowing a systematic management of the funds, and to live off the returns of the investment rather than the common practice of spending the value of the asset itself.

Read the complete study here.