Luck has been supplemented with what I dare to claim is sensible resource management, based on a well-functioning democracy and longstanding and trustworthy institutions. The first point I would like to emphasise is related to ownership of the natural resources. At an early stage, it was concluded that such resources belong to the Norwegian people. Direct government participation in the industry and an extraordinary tax rate on oil company profits, currently 78 percent, ensure that most of the resource rents flow into government coffers. The government also has direct ownership stakes in the most profitable oil fields. Chart: From natural resources to financial wealth Petroleum revenues have been redistributed to all inhabitants in form of investment in infrastructure and public services, such as education and health care. At the same time, revenues have been put aside. This brings me to my second main point. It is important to remember that although revenues from the extraction of a depletable resource count as income in the national accounts, these revenues are of a special kind. In many ways, it would make more sense to view them as transformation of wealth – from natural resources in the ground to financial assets. This is the idea behind the Norwegian sovereign wealth fund, known as the Government Pension Fund Global. Chart: The petroleum fund mechanism All oil revenues are channelled to the fund. The fund’s capital is invested abroad, mainly in equities, but also in bonds and real estate.
Because if we are, the instant effectiveness of some forward-looking commitments and guidance that should never have been issued at all, will give way to a much longer-lasting decrease in our ability to guide the markets in the future, and thus to an increase in the risks faced by each and every economic agent. Our mandates and institutional frameworks may develop, but our primary objective of assisting economic development and growth by preventing abrupt changes in economic indicators – be it the price level or broad measures of the stability of financial systems – will very likely stay unchanged for quite some time to come. Generally speaking, the goal of central banks is to provide some certainty in fundamentally uncertain economies, the uncertainty being based largely on the workings of their monetary systems. In pursuing this goal, we will need three things. First, we will need external recognition of the importance and usefulness of our independence. Second, we will need to nurture good relations with our colleagues; we have made great strides in this area, but much remains to be done. And finally, in our inner circles we will need the support of our nearest and dearest. So, let me end by thanking my wife for being such a rock of support in my life, my parents for teaching me that things should be done properly or not at all, and my kids for being such a joy every time I am with them. Thank you. 2  BIS central bankers’ speeches