Former US ambassador hails Norway’s oil strategy

The former US ambassador to Nigeria has urged oil-rich countries to take a leaf out of Norway’s book when it comes to managing their oil revenue.

Writing in a blog on the Bloomberg website, John Campbell – now the Ralph Bunche senior fellow for Africa policy studies at the Council on Foreign Relations, and the author of Nigeria: Dancing on the Brink – said Norway’s prudent strategies of ensuring that all citizens benefit from the oil economy are an example to be followed.

Campbell starts by recalling a conversation he once had with a Norwegian diplomat, who told him that “Nobody and everybody” got rich because of the oil found in his country. The diplomat added that the money was put into “modern economy”, such as banking, timber and shipping. Campbell notes that Norwegians “offer some economic lessons that the Arab Spring countries might heed as they transition toward democracy”.

In contrast, Campbell writes, when Nigeria became independent in 1960, it was often compared to Malaysia or Thailand in terms of its level of development. But widespread corruption and an overemphasis on oil starved its vibrant manufacturing industry. Now, Nigeria imports gasoline and food, and has fallen to the bottom of the majority of development indexes.

Most Middle Eastern countries have a sovereign wealth fund but, unlike some, The Government Pension Fund of Norway is characterised by its transparency and the high level of accountability demanded of its managers. The country also became the first in the Organisation for Economic Cooperation and Development to publish its figures on oil revenue; a move spurred by a coalition of civil groups, companies and governments known as the Extractive Industries Transparency Initiative, whose aim is to improve governance in the natural resources industry.

While Norway’s success has led it to the top of the human development indexes, Campbell is cautious to point out that it is unlikely that its model can be replicated exactly elsewhere, as the democratic institutions of Norway were intact long before the oil was discovered. “Nevertheless, the Middle East and other “oil curse” states might be able to adopt its political and economic strategies, in particular its emphasis on revenue transparency, diversified investment for long-term goals, and public accountability,” Campbell writes.

“Norway’s example would suggest that countries in the Middle East and Persian Gulf can avoid Nigeria’s situation by increased transparency in the conduct of their national oil companies and the establishment of mechanisms by which the entire population – including immigrants and guest workers – would benefit from resource revenue over the long term. That way, nobody and everybody benefits,” Campbell concluded in the Bloomberg ‘Echoes’ blog.