Our philosophy is to stimulate ownership of decisions and empowerment in the investment process – and that is appreciated by our managers. Moreover, the mere importance of the mission, as formulated by our Board, "... to safeguard and grow financial wealth for future generations through highly professional management coupled with strict integrity", is attracting resources in and of itself. To wed a business culture to a central bank, with its civil service responsibilities, has posed a challenge in terms of adapting the Bank's governance system to the increased importance of professional investment management. Elements in addressing this include a strengthened focus on accountability by a clear division of responsibilities and a system of checks and balances. Maybe the most important element in our governance system is the establishment of a high degree of transparency for the public by providing open information on performance, risks, costs and investments on a timely basis. All in all, we feel the challenge of managing the Fund has enriched the organisation by forcing the central bank to think outside of the box. And perhaps the central bank perspective and values have added to the depth and long-term horizon of the investment organisation. Let me round off this presentation by recapitulating some of the main insights we have gained in the decade the Fund has existed.
I will look at both the underlying economics of the Fund, and on how we have structured our management model. As our "liabilities" are rather intangible, a broad approach is necessary in order to convey the major principles behind our model. The source of our Fund is commodity wealth. So let me start by putting the petroleum sector in Norway into perspective. In 2006 government oil revenue amounted to 36 per cent of total government revenues. That is a high figure, but it also implies that Norway has a substantial tax base (64 per cent) in addition to our natural resources. The Government Pension Fund has two main objectives: One is to serve as a savings instrument with an aim to distribute our national wealth in an equitable manner across generations. The petroleum resources are part of our national wealth and belong not only to the current generation but also to future generations. Second, even though Norway has a fairly diversified tax-base, the large variability in the price of oil would have caused large demand fluctuations in the Norwegian economy, if petroleum revenues were to be used as they accrue. Moreover, internationally exposed industries would suffer a negative impact from high-level spending of petroleum revenues through a deterioration in competitiveness. Hence, an important objective for the Fund is to shield the economy from fluctuations in prices and extraction rates in the petroleum sector, which is one reason why the Fund is not allowed to invest in Norway.