Global agenda: The Dead Parrot

Norway is indeed rich, thanks to its hydrocarbon wealth. But the economy is not humming along, and growth in recent years has been distinctly humdrum.

By PINCHAS LANDAU
December 18, 2014 21:49
4 minute read.
Money [illustrative]

Money [illustrative]. (photo credit: REUTERS)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

In the pantheon of Monty Python sketches, the Dead Parrot sketch is perhaps the most brilliant and surely the most famous. Just recently, The Economist cover pictured a dead parrot, symbolizing the European economy, while in the background the figure of Mrs. Merkel is muttering: “It’s only resting.” A generation earlier, Mrs. Thatcher quoted extensively from the sketch in a speech in the House of Commons. The metaphor and the key phrases of the sketch are now as much part of British culture as, Bard forgive us, Shakespeare.

But only a few people remember that the Dead Parrot in question was a Norwegian Blue. Michael Palin, the shop owner, was quite definite on that point, returning to it several times – notably when he said: “Remarkable bird, the Norwegian Blue, in’it, eh? Beautiful plumage!” Of course, nitpickers noted that since parrots are tropical birds, they are not native to Norway – so there could be no such thing as a Norwegian Blue. Then, almost 40 years after the sketch was initially broadcast, fossils discovered in Scandinavia suggested that parrots not only lived there – albeit over 50 million years ago, in a warm era – but actually developed there and spread south later.

Be the first to know - Join our Facebook page.


Furthermore, when those prehistoric parrots migrated southward – driven, no doubt, by climate change – they probably took a rest here and there along the way, shagged out after a long flight and, yes, pining for the fjords.

But today it is the Norwegian economy that is a Norwegian Blue – and it looks increasingly like a dead parrot. I have recently had cause to do some work on the Norwegian economy and must admit to being quite stunned by what I discovered. In my ignorance, I had assumed that its massive oil and gas reserves had made Norway rich and that the economy was humming along, its growth export-led by its powerful energy sector.

That turned out to be partly true. Norway is indeed rich, thanks to its hydrocarbon wealth. But the economy is not humming along, and growth in recent years has been distinctly humdrum. It has been driven by investment in the energy sector – but that began to fade this year; and by strong consumer spending – well, you can’t save all that wealth, so why not splurge out.

Drilling beneath the surface, you find that Norway has serious long-term problems. The oil is running down, but natural gas is taking its place, and there are hopes of further major finds in the far north – if the Greens let that happen. Meanwhile, Norwegians have indeed grown rich – and lazy.

That’s hardly surprising when you stop to think about it – after all, why work, let alone work hard, if you can retire and live in comfort for as long as is granted to you? If that would be true anywhere, it is probably more true of a country that offers a genuine cradle-to-birth welfare state and even has the resources to pay for it.



To keep the country going, the Norwegians have been importing people to do more of their work. Most of the immigrants come from Eastern Europe, notably Lithuania and Poland, but some hail from much further afield, although the Norwegians are nowhere near as welcoming as their Swedish neighbors.

With native Norwegians retiring early, shopping and touring the world, while collecting their generous pensions and benefits as they pass Go, the country’s huge surpluses – both in the state budget and in its current account – are eroding steadily. That is nothing to worry about in the short run, but together with standard rich-country demographic problems, it means there will be trouble down the road.

This situation is perfectly obvious to any discerning outsider, let alone to the beady eyes of the IMF hawks – who are never “nailed to their perch.” In their latest annual review of the Norwegian economy, dressed in economic jargon and diplomatic politeness, the IMF sternly warned the Norwegians that they needed to diversify their economy away from its reliance on oil and gas – and diversify their trade away from the EU.

Good advice, but it seemed to have fallen on deaf ears.

Anyway, it no longer matters because the distant threats the IMF wrote about last summer have, come winter, become stark reality. The collapse in the oil price means that Norway has no choice but to immediately begin making sharp and painful adjustments, both to its trade and to its generous welfare system.

As for the dominance of Europe as Norway’s trading partner, it may also be too late to adjust, certainly not gradually and painlessly. If The Economist thinks the euro zone is a dead parrot, there are now more of them – Russia and, more surprisingly, Norway. The collective noun for parrots is either a company of parrots or, more colorfully, a pandemonium of parrots. The collective noun for dead parrots seems to be Europe.

www.pinchaslandau.com

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS