In this way, they avoid a situation where growth in public spending and the interest rate push the economy in different directions. Norway’s history as an oil nation goes back to the end of the 1960s. At the beginning of the oil age in Norway, the relationship between the use of petroleum revenues and changes in industry structure was highlighted. However, since then, competitiveness in the business sector in Norway has deteriorated both due to high wage growth and in later years an appreciation of the krone against our trading partners. Costs rose sharply from the mid-1960s to the mid-1970s. In subsequent years, costs have varied around this higher level. So far this year, competitiveness in Norway’s manufacturing industry has been about 5.5 per cent weaker than the average for the period 1970-2004. Over the past 30 years, manufacturing has been scaled back in waves. A substantial decline occurred in the period 1977 to 1984 and from 1987 to 1992. The last wave occurred around the turn of the millennium. Manufacturing employment decreased by close to 55 000 persons from 1998 to 2004. There are many studies in international literature2 that point to the pitfalls facing a country that suddenly discovers large natural resources. Certainly, the Norwegian manufacturing sector has undergone substantial changes over the past 30 years. On the other hand, this period has also been marked by substantial productivity gains in parts of the sheltered sector, for example in retail trade and the banking sector.
Consequently, when decisions on the use of petroleum revenues are taken, weight must not only be given to long-term considerations and the distribution of wealth across generations, but also to developments in the real exchange rate and the competitiveness of the exposed sector over the short and medium term. Thank you for your attention. 2  See e.g. J. D. Sachs and A. M. Warner (2001)”The curse of natural resources” in European Economic Review 45, – 838. 3  See Akram, Farooq Q. (2003): “Reell likevektsvalutakurs for Norge” (Real equilibrium exchange rate for Norway), in Norsk Økonomisk Tidsskrift 118, pp 89-112.  pp 827