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Siv Jensen, leader of Norway Siv Jensen, leader of Norway's Fremskrittspartiet (Progress party), speaks to party members while waiting for the result of the general elections in Oslo, September 9, 2013. REUTERS/Gorm Kallestad/NTB Scanpix  

Oil fund makes all Norwegians ‘theoretical millionaires’

Norway’s sovereign wealth fund has grown so much due to high oil and gas prices that every person in the country became a theoretical millionaire on Wednesday.

The government’s wealth fund grew to 5.11 trillion crowns, or $828 billion, according to Norges Bank — the country’s central bank that manages the fund. Reuters reports that the number of crowns in the fund is “fractionally more than a million times Norway’s most recent official population estimate of 5,096,300.”

This is the first time the Government Pension Fund Global has reached such levels, according to Norges Bank, but that does not mean people will be able to go out and spend all this money. It’s part of a government savings scheme that holds the money for a rainy day and for future generations.

The wealth fund was established in 1990 and owns 1 percent of the world’s stocks, along with bonds and real estate around the globe. It’s funded by oil royalties and is meant to shield the country from the volatility in oil prices.

However, rising oil and gas prices have been a boon to the fund this year, which is now about 183 percent of the country’s 2013 gross domestic product (GDP) and is expected to peak at 220 percent of the GDP around 2030.

“Many countries have found that temporary large revenues from natural resource exploitation produce relatively short-lived booms that are followed by difficult adjustments,” Norwegian Finance Minister Siv Jensen told Reuters in an email.

The fund raked in 288 billion crowns, about $46 billion, from investments in the third quarter of 2013 alone. Oil and gas holdings had a 6.8 percent return during that time. This comes at a time when other European countries are struggling to manage their finances after major economic downturns.

“The fund is a success in the sense that parliament has managed to put aside money for the future. There are many examples of countries that have not managed that,” Oeystein Doerum, chief economist at DNB Markets, told Reuters.

The wealth fund, while making Norwegians theoretically rich, may have discouraged some of them from working.

“One in five people of working age receives some kind of social insurance instead of working,” Doerum said.

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