NEW YORK TIMES: "Norge - et paradis"

Trond Andresen (Trond.Andresen@itk.ntnu.no)
Fri, 20 Dec 1996 09:47:36 +0100

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THE NEW YORK TIMES INTERNATIONAL Dec. 13, 1996 Front Page

WELFARE'S SNUG COAT CUTS NORWEGIAN COLD

By YOUSSEF M. IBRAHIM

OSLO, Dec. 9 - Suffer from rheumatism? The Norwegian
state will send you to the Canary Islands for a month
of therapy, all expenses paid. Husband walked out,
leaving children to raise? Not to worry. As a single
mother under the generous Norwegian welfare system,
you will get special subsidies for the children and
paid leave from your job so you can stay home and rear
them.

Take Dr. Sidsel Kreyberg, 42-year-old pathologist. When
her husband left her in 1987, leaving her with two
young children, she was immediately embraced by the
state.

For nearly eight years, until both children reached age
10, the state paid her a pension. Other support systems
helped, including free day care, subsidized housing and
vacations, and free medical and dental care.

The Government also footed the bill for Dr. Kreyberg to
fulfill her old ambition of getting a Ph.D. in
epidemiology at the University & Oslo.

Now she is off welfare and has a better-paying job than
before she went on. The other day, she stood in her
living room overlooking a vista of snow-covered forests
and the Oslo Fjord. She beamed at her daughter,
Karoline, 12, and son, Karsten, 10, and proclaimed,
"Look at the result." The entire world, it seems, is
dismantling the welfare state, privatizing the public
sector, downsizing government, reducing subsidies and
cutting social programs that were once sacrosanct.

>From Europe to Africa, across most of Latin America and
even in the once fabulously wealthy Arab oil countries,
governments plagued by soaring budget deficits are
everywhere embracing the free-market gospel preached in
the 1980's by President Reagan and Prime Minister
Margaret Thatcher of Britain.

Everywhere, that is, except Norway.

Buoyed by an unending gush of oil revenue and guided by
a national commitment to egalitarianism, Norway's 4.35
million people are fattening the mother of all welfare
states.

Even business people -- including those who export
pulp, paper, lumber, chemicals, fertilizers, aluminum
and transport machinery to the globalizing world of dog-
eat-dog capitalism -- join in their nation's adherence
to social democracy.

In Norway, where individual tax rates can climb above
50 percent, citizens benefit from a number of
entitlements and a shrunken Workweek.

Inflation is below 2 percent. The unemployment rate is
the lowest in Europe. Economic growth in recent years
has ranged between 3 percent and 5 percent. Oil exports
are running at 3 million barrels a day, second only to
Saudi Arabia's, and the petrodollars are feeding a
budget surplus this year of $6 billion more than the
Government's $61 billion expenditure.

The Norwegian welfare cake, surely the sweetest in the
world today, includes these ingredients:

*Annual stipends of $1,620 for every Norwegian child
under 17, which rise slightly for every other child as
a family grows and rise still more if the family lives
in a remote part of the country.

*Retirement pay, equivalent to industrial workers'
pensions, for all home-
makers, even those who have worked outside the home.

-------------------------
ONE COUNTRY EATS CAKE WHILE
THE REST OF THE WORLD DOWNSIZES
-------------------------

*Forty-two weeks of fully paid maternity leave.

*Reimbursement for all medical costs exceeding $187 a
year per individual.

These benefits may be financed by oil, but they are
undergirded by the national character.

Norwegians, with their profoundly egalitarian
persuasion, frown on wide disparity in income. This
permits one of the highest personal-tax rates in the
world and provides the Government with vast latitude
for social engineering.

"It is a sense of solidarity," a Western diplomat said.
"High taxes enjoy a great national consensus because
in a way it's like they see them as a way to be saved
from themselves."

Norwegians have a word for their anti-elitist views,
Jantelaw, which means nobody should start thinking he
or she is better than anybody else. Politicians have
lost their jobs for forgetting this.

The disdain for the trappings of wealth and power,
which among other things restricts executive pay and
mandates extensive workplace rules, meets surprisingly
little opposition from business.

Henning Holstad, owner and president of the Tiny
Transport Company, says his after-tax annual pay is
about double the $38,500 his workers average, compared
with multiples of 10 or more, and sometimes 100 or
more, in the United States.

In addition to high personal income taxes, Norway
imposes a 23 percent sales tax; gasoline costs $6 a
gallon, and a glass of beer in a bar goes for $8.

"It's enough for money to change hands twice or three
times for it to go back to the Government and the
welfare state," Mr. Holstad said in an interview.

Business leaders do complain about short workweeks
and high overtime rates and paid sick leaves of up to
two weeks. But they have made peace with the system.

"We would like to fine-tune some attitudes on sick
leave, working hours and minimum wage," said Karl Glad,
director general of the Confederation of Norwegian
Business and Industry, "but I don't believe many
businesses here think it is worth taking the social
risks associated with radical change."

In fact labor in Norway, defying a world trend,
continues to wring con- cessions from management.
Having won agreement to lower the retirement age to 64
from 67, the unions are now pushing to lower it to 62,
at full pension.

The 165-member Parliament, dominated by the Labor
Party, is expected to approve legislation soon for a
"Lifelong Learning" program, which would give
Norwegians a year off their jobs at full pay every
decade or so to hone their work skills. The employers
and the state would split the cost of paying their
salaries.

Even with so many social programs, Norwegian business
is doing quite well for itself. It doesn't hurt that it
has one of the best educated and technologic- ally
savvy work forces in the world. It certainly helps
that Norway reduced the corporate tax rate to 28
percent from 50 percent four years ago.

To save on labor costs, Norwegian companies have
rapidly computerized their operations.

"Ten years ago I had 750 book- keepers," said Stein-
Erik Hagen, 40, chief executive of the Hakon Group,
Norway's largest supermarket chain. "Today I employ
only 150. Our goal is to reduce much more."

In Hakon's ultramodern office building just outside
Oslo, pots of free coffee and plates of free fruit and
cakes are placed at strategic locations as an extra
perquisite for employees who work in a building
decorated with fine paintings and sculpture.

Mr. Hagen recited the familiar business complaints
about high costs and extensive regulations in Norway.
But, asked if he would favor abandoning his country's
approach for a British-style model, he shook his
head.

"We are a very social democratic society," he said,
"and we don't know another system. It may be costly,
but there is social peace. There are no poor people in
Norway, and I don't want to see any. There are no
strikes, and no high demand for salary increases. I
want to adjust the system, but only to preserve it."

Health Minister Gudmund Hernes, who also served in the
Education and Finance Ministries and who is considered
the Government's welfare guru, said the country would
never abandon its social programs.

"Even if we didn't have oil," he said, "we would not
rethink the notion of the welfare state."

Protecting workers against the vagaries of the
marketplace is only part of it, Mr. Hernes said. In his
view, the state's investment in workers' health,
financial security and education pays big economic
dividends. For that reason, he is a pioneer of the
Lifelong Learning plan.

"The most powerful drug you can supply a person is
education," he said. "In Norway, we are schooling our
population to be at the forefront of postindustrial
society."

He scorns Britain's experiment in downsizing government
and world-wide union-busting over the last quarter
century.

"They are producing such dissatisfaction and enormous
strains on society," he said. "That will come back to
haunt you."

Such talk might seem facile coming from a Government
that is propped up by the exportation of more than a
billion barrels of oil a year to a thirsty world. But
what will happen when the oil money runs out?

If policy makers have their way, it never will.
Starting this year, Norway will divert its budget
surplus -- $6 billion of a total of $10 billion in oil
revenues -- to a new Petroleum Fund. The money is to be
invested outside the country to avoid over-heating the
economy. By 2005, the Government hopes to have
accumulated $100 billion.

It is money that the conservative minority wants to
keep away from welfare benefits proponents.

"My party wants to lock it up," said Ansgar Gabrielsen,
a leading member of the Conservative Party and
Parliament's social affairs committee.

"I don't trust politicians who have money at their
disposal. Here, if you have money or no money, it
doesn't make a difference," he said. "We all go to the
same doctors; we all get the same services."

"That is the good side of Norwegian society," he added.
"But it remains good as long as people say, 'What can I
do for the community?'

"Now, if everyone starts saying, 'What can the
community do for me?' and if this goes on without
limits, the system will go 'poof.'"