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COUNTRY BRIEFS


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BACKGROUND

The Kingdom of Norway occupies the western and northern portions of the Scandinavian Peninsula in Europe, bordered by Sweden, Finland, and Russia. It also shares sea borders with the UK and Denmark. A rugged country of mountains, fjords, and glaciers, Norway covers an area of 385,155 square kilometres including the territories Svalbard (Spitzbergen) and Jan Mayen. Norway also holds sovereignty over Bouvet Island in the South Atlantic Ocean. Norway has a population of 4.8 million of which approximately 80,000 are Sami, an indigenous people living in Norway, Sweden, Finland and Russia. Sami settlements are located mainly in the north of the country. Having one of the world's highest per capita incomes, Norwegians enjoy a high standard of living, life expectancy, and overall health and housing standards.

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POLITICAL OVERVIEW

Norway is a constitutional monarchy and parliamentary democracy with legislative powers vested in the Storting (parliament). The Head of State is H.M. King Harald V, who acceded to the throne in 1991. The Storting is made up of 169 members directly elected for four-year terms by proportional representation. Parliamentary elections are mandatory every four years at specific dates. The next elections are scheduled to be held in 2013. A constitutional amendment passed by the Storting in February 2007, which took effect following the 14 September 2009 elections, means that the Storting now functions as a unicameral parliament, rather than dividing into two chambers to consider legislation as was previously the case.

The governing Centre-Left coalition (Labour, Socialist Left, and Centre Parties) was elected to government in 2005, and was re-elected for another four years on 14 September 2009, winning 86 seats in the Storting. The Government is led by Prime Minister Jens Stoltenberg. The Labour Party, which has dominated the political scene in Norway since the 1930s, continues to be the largest party in the Parliament with 38 per cent of the seats.

Norway is not a member of the EU, having voted twice (1972 and 1994) not to join. Successive governments have, however, tried to establish the closest links possible with the EU through the European Economic Area (EEA) agreement. Norway has good access to the EU single market for most of its products through the EEA agreement and participates in regular consultations with the EU on a range of political, trade and security related issues. NATO is the cornerstone of Norway's security policy.

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ECONOMIC OVERVIEW

Norway has an open economy with a floating exchange rate. The International Monetary Fund (IMF) forecast in October 2009 that real GDP in Norway would contract by 1.9 per cent in 2009, before returning to positive annual growth of 1.3 per cent in 2010.  The IMF expected annual inflation to fall from 2.3 per cent in 2009 to 1.8 per cent in 2010, but predicted a rise in unemployment from 3.3 per cent in 2009 to 3.8 per cent in 2010.

Norway's emergence as a major oil and gas producer in the mid-1970s transformed its economy. Norway's per capita income is one of the highest in the world due to the large influx of investment capital into its North Sea oil and gas fields and its substantial oil revenues. The petroleum sector contributes over half of Norway's total export revenue. All production activities take place off-shore in the North Sea and the Norwegian Sea.  To insure against the eventual depletion of its oil and gas resources, Norway has created the Norwegian Government Pension Fund Global. The Fund manages some 2.7 trillion NKK (A$506 billion), derived from royalties on the country's oil and gas reserves. The fund is already about the size of the national economy. 

According to the Norwegian Government, Norway is the world's eleventh largest producer of oil and second largest exporter of natural gas. It has approximately half of the remaining reserves of oil and gas in Europe and globally, is the third-biggest oil exporter, behind Saudi Arabia and Russia. It supplies 15 per cent of Europe's gas needs and, within a few years, is expected to increase gas exports dramatically to account for 30 per cent of European gas imports.

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BILATERAL RELATIONSHIP

Australia and Norway enjoy warm bilateral relations. As one of the three European Antarctic claimants, Norway is an important interlocutor for Australia on Antarctic issues. A bilateral Working Holiday Maker arrangement came into effect in August 2001, and is a popular means for young Australians and Norwegians to experience each other's country. A reciprocal health agreement came into effect in 2003. A bilateral Social Security Agreement came into effect in January 2007. A revised bilateral Double Taxation agreement entered into force in September 2007 (further information is available on the Australian Taxation Office website (http://www.ato.gov.au/businesses/content.asp?doc=/content/82112.htm) ).

The only significant areas of disagreement between Australia and Norway are whaling and Norway's high levels of agricultural protection.

It is estimated that approximately 10,000 Norwegians live in Australia, and over 17,000 Australians claim Norwegian heritage. Australia is also a very popular tourist destination for Norwegians. The total annual number of arrivals from Norway is growing and stood at around 20,500 in the financial year 2008–09. The Minister for Resources, Energy and Tourism, the Hon. Martin Ferguson AM MP visited Norway in May 2009, and then Foreign Minister, the Hon. Stephen Smith MP visited in December 2008. The Norwegian Minister for the Environment and Development Cooperation, Mr Erik Solheim visited Australia in May 2008. Other visits from high level Norwegian officials include: former Prime Minister, Kjell Magne Bondevik in March 2005; former Minister for Education, Ms Kristin Clemet in October 2004; and former Minister for Education, Youth and Ecclesiastical Affairs, Mr Trond Giske in September 2000.

Australia's Ambassador to Norway is based in Copenhagen, and there is an Honorary Consul in Oslo. Norway maintains an Embassy in Australia and there are Consulates in all States and in the Northern Territory.

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Last Updated: March 2010

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BILATERAL ECONOMIC AND TRADE RELATIONSHIP

Major Australian merchandise exports to Norway (A$67 million in 2009) include nickel ores and concentrates and alcoholic beverages. Imports from Norway in 2009 were worth A$407 million.

Two-way trade in services was valued at A$499 million in the financial year 2008‑09. Norwegian students are important to the Australian education sector with some 2,099 student enrolments in 2008.

Norway and Australia share common expertise in various industrial sectors, including clean energy, oil and gas, mining, chemicals, and marine and shipping. This indicates a receptive market for Australian technology and expertise in these sectors. There are a number of significant Norwegian companies with direct investments in Australia. These include the Aker Group (oil and gas), Norsk Hydro (fertilisers and aluminium production), Wilhelm Wilhelmsen (shipping) and Dyno Wesfarmers (explosives). In June 2009, Kongsberg Defence and Aerospace, a Norwegian defence supplier, was awarded an Australian Tactical Interface military contract to support the delivery of Australia's Hobart Class destroyers.

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