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The Norwegian economy is a prosperous bastion of social capitalism , featuring a combination of free market activity and government intervention. The government controls key areas, such as the vital petroleum sector (through large-scale state enterprises), and extensively subsidizes agriculture, fishing, and areas with sparse resources. The extensive welfare system helps propel public sector expenditures to more than 50% of GDP. A major shipping nation, with a high dependence on international trade, Norway is basically an exporter of raw materials and semiprocessed goods. The country is richly endowed with natural resources - petroleum, hydropower, fish, forests, and minerals - and is highly dependent on its oil production and international oil prices. Only Saudi Arabia exports more oil than Norway. Norway imports more than half its food needs. Norway opted to stay out of the European Union after referendums in September 1972 and November 1994. Growth was a meager 0.8% in 1999 because of weak private consumption and anemic investment activity in the oil and other sectors. Growth should pick up in 2000, perhaps to 2.7%. Despite their high per capita income and generous welfare benefits, Norwegians worry about that time in the next two decades when the oil and gas begin to run out.
Norway is one of the world's richest countries in per capita terms. It has an important stake in promoting a liberal environment for foreign trade. Its large shipping fleet is one of the most modern among maritime nations. Metals, pulp and paper products, chemicals, shipbuilding, and fishing are the most significant traditional industries.
Norway's emergence as a major oil and gas producer in the mid-1970s transformed the economy. Large sums of investment capital poured into the offshore oil sector, leading to greater increases in Norwegian production costs and wages than in the rest of western Europe up to the time of the global recovery of the mid-1980s. The influx of oil revenue also permitted Norway to expand an already extensive social welfare system. Norway has established a state Petroleum Fund which reached $148 billion as of June 30, 2004. The fund primarily will be used to help finance government programs once oil and gas resources become depleted. Norway is currently enjoying large foreign trade surpluses thanks to high oil prices. Unemployment remains currently low (3%-4% range), and the prospects for economic growth are encouraging thanks to the government's stimulative fiscal policy and economic recovery in the United States and Europe.
Norway voted against joining the European Union (EU) in a 1994 referendum. With the exception of the agricultural and fisheries sectors, however, Norway enjoys free trade with the EU under the framework of the European Economic Area. This agreement aims to apply the four freedoms of the EU's internal market (goods, persons, services, and capital) to Norway. As a result, Norway normally adopts and implements most EU directives. Norwegian monetary policy is aimed at maintaining a stable exchange rate for the krone against European currencies, of which the " Euro" is a key operating parameter. Norway is not a member of the EU's Economic and Monetary Union and does not have a fixed exchange rate. Its principle trading partners are in the EU; the United States ranks sixth.
Offshore hydrocarbonIn chemistry, a hydrocarbon is an organic compound consisting only of carbon and hydrogen. They all consist of carbon backbone and atoms of hydrogen attached to that backbone, also aliphatic hydrocarbons. For example, methane ( swamp gas) is a hydrocarbon deposits were discovered in the 1960sCenturies: 19th century 20th century 21st century Decades: 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s Years: 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Events and trends The 1960s was a turbulent decade of change around, and development began in the 1970s. The growth of the petroleum sector has contributed significantly to Norwegian economic vitality. Current petroleum production capacity is more than 480,000 m³ (3 million barrels) per day. North Sea oilNorth Sea oil refers to oil and natural gas ( hydrocarbons) produced from reservoirs beneath the North Sea. North Sea oil was discovered in the early 1960s, with the first North Sea oil coming on line in 1971 and being piped ashore at Teesside, England, f production has increased rapidly during the past several years as new fields are opened. Total production in 2001 was about 251 million m³ of oil equivalents, nearly 79% of which was crude oil. Hydropower provides nearly all of Norway's electricity, and all of the gas and most of the oil produced is exported. Production increased significantly in the 1990s as new fields come onstream.
Norway is the world's third-largest oil exporter and provides much of western Europe's crude oil and gas requirements. In 2001, Norwegian oil and gas exports accounted for 57% of total merchandise exports. In addition, offshore exploration and production have stimulated onshore economic activities. Foreign companies, including many American ones, participate actively in the petroleum sector.
The Norwegian telephone system has been privatisedPrivatization (sometimes: denationalization privatisation or — especially in India — disinvestment is the economic process of transferring property, from public ownership to private ownership. An opposite process is nationalization. In theory, privatizati, and the largest telecommunicationTelecommunication is the extension of communication over a distance. In practice it also recognizes that something may be lost in the process; hence the term 'telecommunication' covers all forms of distance and/or conversion of the original communicationss company (formerly government owned) is now known as TelenorTelenor is the largest telecommunications operator in Norway. The headquarter is located at Fornebu, close to Oslo. It was formerly state-operated, and called Televerket. The Norwegian state still owns a majority share of its stock. Following the 1998 tel.