Norway as an example of Dutch Disease

2001 has been a year of great changes in the Norwegian economy in terms of financial policies. The independent Norwegian central bank met the Inflation Targeting Regime, a new monetary policy application, on March 29, 2001. According to this new regulation, steps will be taken to keep the inflation level at low and stable levels. The new target of the monetary policy

51

has been determined as approximately 2.5% according to the annual consumer price inflation. In general, direct effects on consumer prices of changes in interest rates, taxes, indirect taxes and unusual temporary disturbances should not be taken into account. The international value of the Norwegian Krone is determined according to the exchange rates in foreign exchange markets.

Recent studies of resource-rich countries and their innovative approaches are the authors of these studies, the most important aspect and factor of innovations in the resource industry is the interaction of fields and cooperation with other sectors of the economy. In this case it is divided into three important mechanisms that contribute successfully. The development of resource economies, the development of investment strategies, the resource industry and the fall of resource impulses to production chains. It enabled the creation of knowledge through innovation. If these processes are in a study of the economy and the Norwegian experience, the formation of zoning islands is the feature that requires continuous interaction between information institutions in other sectors and resource companies.

The Norwegian welding industry has been highly innovative. Its resources are characterized by the dissemination of innovative process knowledge, which plays an important role in the resource industries and in other sectors of the economy, the transfer of foreign technologies, Norwegian universities, research institutes. The creation of new resources has benefited from the characteristics of countries such as Finland, Sweden, Norway, Denmark, Iceland, New Zealand, Netherlands, Canada and Australia. In this case, the resource sectors were determined statistically. The method proposed by J.Sachs and A.Warner, which includes the resource sectors, created the fuel and non-fuel products of the primary sector. Indicators that show the resource nature of the economy include: resource sector, net exports or investments in GNP.

The value of the indicator of the volume of resources included in the country's net exports is at the level of 20-40%, and other things being equal, confirms the resource orientation of the economy.

The country's share of resources in output and employment has fluctuated. Dominant sources in Norwegian exports have, on average, exceeded 70% in the last century. In some periods they even reached 90%. In Norway, the share of natural resources in exports was set at 80% and had the same indicators at the end of the 19th century.

The development of the countries has been based on resource sectors in which low and medium technology industries were further developed. Even in countries that have managed to develop important high-tech industries such as Sweden, Finland and the Netherlands, such

52

industries have replaced and continued to replace low and medium technology industries.

Economies, as well as some of the richest states in the world, ranked ahead of the USA according to the indicators. Thus, the majority had very high growth rates and productivity in production, and also very developed social systems. Provisions including health, education and social protection have been noted. Thus, they have a relatively low level of income compared to other countries. There are three factors in this source of development:

 Development through the improvement of knowledge and investment strategies in the welding industries

 Development through the transfer of resources to downstream value chains

 Creating competencies using information infrastructure.

Welding industries can produce innovative processes that allow. In order to maintain the productivity and production increase level, the trade of these goods is inevitably complex development technologies, the construction of large-scale infrastructure facilities, the production and improvement of automation logistics support. The upstream and downstream chains were added from the resource base during the development period. Sweden's economic value has moved to iron ore mining. They have had an important place in metalworking, automotive and later in machine building and electronics.⁵⁴

From maritime transport to shipbuilding and development to marine electronics, Norway has continued to be a leader with the world's first automated navigation system. Electronic tools have been produced for offshore and underwater drilling. Finland has switched from paper production and chemical production for paper production. It has required the specific linking of mechanisms used to add value to both resource-dependent states and active extractive companies.

The circumstances of these countries, unfortunately, have made the experience a diverse group of countries of origin, ignoring the tendency to offer recommendations that were the same for all countries in the past. Predominantly agricultural countries such as Mali and Myanmar have yet to have a very diverse economy, just like developing countries, besides their natural resources.

Therefore, it was possible to get rid of the Dutch disease by directing it to the manufacturing sector.⁵⁵

54 Ushanov, A.M., and Kosenko, A.V. (2013). Infobusiness in one day. Publishing house Peter.

55 Corden, W. M., and Neary, J. P. (1982). Booming sector and de-industrialisation in a small open economy. The economic journal, 92(368), 825-848.

53

 The mechanism for managing institutions and the resource sector

 Infrastructure development, active financial and competitiveness policies;

 Support localization policies development of a mechanism for an additional effective use of resource revenues;

In addition to the mechanism of transforming resource wealth into a wider area, economic development depends on these three areas. Fundraising is value creation and the transformation of value into long-term development. Mc Kinsey company has developed a special index for the evaluation of resource performance. There are several main classifications of volumes of oil resources. These are national classifications, common AAPG (American Petroleum Geologists Association), the international classification of the UN and others. Today, in the evaluation of the volume of oil, it is thought that there are reserves that can be extracted by man in the current state of science and technology.

At the time of the exploration of oil deposits, Norway had a different starting position than most of the existing source countries. At all levels, social, political, cultural and economic aspects of life became dominant, and the growth of corruption was slowing down in legality and management quality, economic growth. Oil can be wealth, the government, especially in developing countries, is using repressive methods because of inclination, power leaders to prevent democracy and the search for a democratic form. A large shipbuilding industry and a high proportion of the highly educated population provided opportunities for growth in vocational education.⁵⁶

Norway has strengthened the competitiveness of domestic players by creating their own businesses, improving their skills through research and development and special training, as well as stimulating the process of developing partnerships with businesses. When oil deposits were found in Norway in the late 1960s, the country had no experience in the oil and gas sector, and its per capita income was still lower than Norway's neighboring Europe. The success of this country has many important components:

Using target editing. After the discovery of the oil fields, the state established three national oil companies: Statoil, Hydro and Saga. Thus, the Royal Decree of 1972 stated that if Norwegian suppliers are competitive in terms of supply, price, quality and reliability, contracts must first be

56 Todorov, A.A. (2018). Approaches of foreign countries to the legal regulation of the development of oil and gas resources on the Arctic shelf. Arctic and North, (30).

54

concluded with them. In addition, the Petroleum Law has asked the operator to provide information from the Ministry of Petroleum and Energy. Contracts for the supply of goods and services and the ministry required the inclusion of Norwegian companies in the list of applicants. Foreign companies could not be removed from the list, but the ministry had the right to change the results of their procurement contracts.

Developing existing professional opportunities and competences. In the first years after the discovery of oil deposits, Norway began to rapidly develop its capabilities in the oil and gas industry, using workforce from other industries, including shipping, fishing, and construction.

Norway has developed its innovative and technological competencies actively and through specialization. R&D costs are deducted from the tax base for operators on the Norwegian shelf.

The state directly provided funding for universities and research institutes. A broad educational and research infrastructure has been established, including the University of Stavanger and the Rogaland Research Institute. Close cooperation between research organizations and companies has been a guarantee that business needs are met. Huge investments have been made in new technologies. The Statoil LOOP program is focused on supporting initial testing, providing expertise, providing equipment for pilot testing, and providing financial support.

Cooperation with the private sector. Norway has established cooperation and partnerships with foreign private companies. In the late 1980s, Statoil company acquired its own technology and experience through a long-term partnership with BP. Both companies have worked hard to gain access to new promising regions including Angola, Azerbaijan, China, Congo, Kazakhstan, Nigeria, Russia and Vietnam. Initially, BP was the main operator on these projects. But over time Statoil was able to play the role of an independent operator. The Norwegian company had a long tradition of partnerships with leading oil service companies and later in the field of underwater drilling. Norway abolished legislation establishing localization requirements in 1994 to create a competitive environment for foreign companies and local service companies. Currently Norway is a successful oil services and equipment provider in the global market.