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A Look at Poverty in Norway

Poverty-in-Norway
The world’s richest country is Norway. The population of Norway is 4.5 million people. Despite the wealth of the country due to oil commodities, poverty in Norway still exists. In the capital of Oslo, 8.3 percent of the population suffers from poverty. The populations that are affected the most by poverty are immigrants, families with children and single parents, and those who are on social security.

As of 2014, child poverty is on the rise in Norway. It is estimated that 78,000 children are suffering at this time. Three point four percent of children are living in a state of ‘relative’ poverty. In Norway, it is defined as households with income below 50 per cent of the national median.

Of the children of Norway, 3.4 percent of children live below 50 percent of the poverty level, 1.6 percent of the children live below 40 percent of the poverty level and 7.5 percent live 60 percent below the poverty level.

In Norway, the defining features of their national estimates of the percentage of the population falling below the poverty line are based on surveys of sub-groups. The results are then adjusted based upon the number in each group. However, it is important to remember that wealthier nations generally employ more generous standards of poverty than poorer nations.

 

Poverty in Norway

 

Norway is considered to be a relatively rural country as compared to other countries within the EU. Only half of its population lives in cities and towns that have above 8,000 residents. Living conditions are said to be an issue for the impoverished. Overcrowded living conditions accompanies economic straddles in their cities. There are many problems in northern Norway, among their municipalities.

In Norway, a long standing and successful social welfare system exists. It has strong fiscal redistribution mechanisms designed to aim both at the impoverished and at a regional level. It is for this reason alone, that it is said that absolute poverty is rare. As it stands, Norway has 11 percent of the population under low-income level.

In comparison to the other European Union countries, the household poverty threshold is higher in Norway. In Norway, elderly people have a higher low-income risk than comparative age groups, compared to other European countries. In stark contrast, the vulnerable groups of Norway experience the opposite.

The contrast is even starker in oil-rich Norway, where the poorest 38 percent of the people fare better, on average, than the poorest 38 percent of Americans, despite a lower median per capita GDP.

-Erika Wright

Sources: CS Monitor, Index Mundi, News in English, Panam Post, UNICEF,
Photo: Romania Insider

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Norway Quality of Life Far Exceeds America

Scandinavia_Norway_Europe
When it comes to quality of life, there are few countries that can supersede America in terms of luxury, comfort and overall well-being. Not even Canada or Britain exceeds the United States in quality of life. However, Norway, an oil-rich country situated in the Scandinavian Peninsula, undeniably outstrips the American standard of living.

The United States has a lower per capita GDP than Norway with a GDP of 51,749 compared to 99,558, respectively, and is also home to one of the most pressing income distribution gaps in any industrialized nation, surpassed in income inequality by only Russia and Mexico.

Due to America’s cavernous income inequality, the poorest 38% of Norwegians are better off than the poorest 38% of Americans despite an overall lower average per capita GDP. According to Syracuse University professor Timothy Smeeding, the United States relies heavily on the markets to an extent that social safety nets are neglected, unlike Norway, which focuses more resources on providing aid to the poor.

This is not to say that America completely disregards its poor. To clarify, the United States has initiated its portion of socially-oriented acts, such as its attempt to reform the welfare system during the past two decades.

However, while the number of individuals on welfare was reduced from 5 million to slightly over 2 million, the welfare poor were downgraded into the working poor. Although welfare reform was rooted in good intentions, the lack of government safety nets defeated the purpose of the entire act.

Although the discovery of oil on the land in 1969 had transformed Norway, more than just an abundance of the valued natural resource buttresses Norway’s economy. Norway’s success has been attributed to what many call the “Norwegian Model”– a model of running a welfare state in which resources are carefully monitored, preserved and kept up-to-date.

While the United States ranks among one of the wealthiest nations in the world, it has stayed remiss in establishing social safety nets, particularly for the less economically-advantaged subsection of the population. Due to the lack of social safety nets, America hosts one of the largest global income inequality gaps, and is ultimately surpassed by the tiny welfare state of Norway in terms of quality of life.

– Phoebe Pradhan

Sources: Infoplease, CS Monitor, World Bank, News in English
Photo: The Telegraph

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Norway’s Debt Audit

Debt Audit
Norway recently completed an audit of its debts to developing nations that was conducted by Deloitte, an international financial services company. The audit was initiated with the intention to discover if Norway’s aid to developing nations since 1970 complies with international and national guidelines. This is the first audit of its kind and is welcomed by anti-poverty advocates across the globe.

Developing countries burdened with debt is a significant contributor to global poverty and hinders the countries’ ability to introduce progressive reforms. Many of these loans impose burdensome payment plans and high interest payments. As a result, anti-poverty measures must be forsaken or cannot be effective with such a burden on public finances.

In April 2012, the United Nations Conference on Trade and Development (UNCTAD) introduced the Principles on Promoting Responsible Sovereign Lending and Borrowing. The principles are intended to protect developing nations that are borrowing money by decreasing the costs of borrowing and the number of debt crises.

So far, twelve countries have endorsed the principles. The principles include provisions that agents who work with a country’s debt are required to act in a transparent and accountable way that is consistent with their public office. In addition, the principles place responsibility on both the borrowers and lenders in debt agreements.

This is a significant change from most international debt principles, which place the burden almost solely on the borrowers.

Norway’s audit included 34 debt contracts that are held with seven countries: Pakistan, Indonesia, Egypt, Zimbabwe, Myanmar, Sudan and Somalia, which total almost $1.6 billion. Norway’s International Development Minister pointed out that while international aid may total $141 billion annually, developing countries must pay $464 billion annually to creditor nations.

While Norway has not released its intended actions in response to the audit’s findings, some of the debts did not meet standards of responsible lending. Norway is considered a responsible lender, and implementing a similar debt audit in other lending countries may produce similar findings.

The U.S. has endorsed the principles, but only as voluntary guidance. Advocacy firms for responsible lending are lobbying the U.S. to introduce legislation that would incorporate the principles in U.S. policy, providing a more consistent application of the principles.

– Callie D. Coleman

Sources: Inter Press Service, European Network on Debt and Development, UNCTAD
Photo: Empresate

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Norad 101

Norad 101
The Norwegian Agency for Development Cooperation (Norad) has a yearly budget of just over one percent of Norway’s federal budget, approximately 27.8 billion kroner (or $4.5 billion USD). This budget of over one percent of Norway’s GDP makes Norway the biggest donor to development aid in the world. The money is used to support the agency’s goal of achieving political, economic, agricultural, and educational stability worldwide.

Brazil, the top recipient of Norad funding for the last two years due to the forestry initiative, received 400 million NOK for all five of Norad’s incentives: environment and energy, health and social services, education, economic development and trade, and good governance. The aid was most heavily concentrated for the environment/energy incentive, which received 365 million NOK.

The budget for Brazil has led to outstanding results in some of those categories. Environmentally, that money helped to reduce deforestation in the Amazon Rainforest by over 77% in the last seven years. It also helped Brazil’s economy boom, making that country the world’s sixth largest economy today.

However, there have only been tangible results in two of the five incentives. Brazil and developing countries like it would benefit more from being on some of the Norad plans to help countries support themselves.

For example, Norad is one of the partners in the program aimed to reinforce public financial management (PFM) systems, which are important for democratic governance and macroeconomic stability. The countries that receive PFM support are almost all African, with the exception of Nepal.

Programs like this that encourage poverty reduction and financial planning could be hugely beneficial to countries on an economic upswing like Brazil. Giving more developing countries incentives to create better PFM systems helps those countries meet the United Nations Millennium Development Goals to eradicate extreme poverty and develop a global partnership for development.

Still, Norad’s donations to Brazil have been undoubtedly influential in creating such a booming economy there. Brazil was the 22nd highest importer of Norwegian goods in 2012, which shows that consistently donating aid to developing countries is a high return of investment. Brazil and Norway have recently founded the Brazilian-Norwegian Chamber of Commerce, which aims to promote the development of commercial relationships between Brazil and Norway.

Norad’s funding for developing countries like Brazil has changed the way these countries not only trade, but also how they view government, provide healthcare, and structure education. In a limited amount of time, Norad has made invaluable changes in some of the world’s poorest populations, all for just one percent of its GDP.

– Lindsey Rubinstein

Sources: Norad, CIA, BNCC