Occupying the western part of Scandinavia, Norway's western coastline is characterized by numerous fjords and islands. Large oil and gas revenues have brought prosperity. Gro Harlem Brundtland, Norway's first woman prime minister, went on to take top UN posts. Despite the Europe-wide recession in the early 1990s, Norway was able to contain rising unemployment, which peaked at 6% in 1993. A constitutional requirement is that government creates conditions that enable every person to find work.

Norway has a small but growing immigrant population, forming 5.6% of the population in 2001. In the early 1990s the numbers of asylum seekers increased, especially as a result of the Bosnian conflict. Some refugees have been attacked by right-wing groups.

The family is traditionally close and nuclear. Men are expected to share responsibility for raising children, who frequently attend day schools from below the age of two years. Women enjoy considerable power and freedom, and comprise at least 40% of the government. Over half of marriages end in divorce.

Strengths

Western Europe's biggest producer and exporter of oil and natural gas. Mineral reserves. Hydroelectric power satisfies much of country's energy demands, allowing most oil to be exported. Soaring world oil prices in 2000. Petroleum fund for current profits to provide for future generations. Large merchant shipping fleet. Low inflation and unemployment compared with rest of Europe.

Weaknesses

Overdependence on oil revenue. Small home market and relatively remote location. Shortage of skilled labor. Harsh climate limits agriculture.

Profile

The state is interventionist by nature. In 1991, it stepped in to rescue most of the main commercial banks, which had been hit by bad loans. It began returning them to the private sector in 1994. The state also manages the distribution of offshore oil and gas licenses, and owns 45% of the Norsk Hydro conglomerate. In 2000 the state sold a 20% share in its oil and telecommunications companies.

Norway's immediate future prosperity is guaranteed by its offshore sector. There is a shortage of skilled labor, partly eased by the arrival of workers from other Scandinavian countries, but creating upward pressure on wages. Continuing the strong regional policy of redirecting resources from the more prosperous south to the isolated north is likely to remain a priority, both for social and strategic reasons.

Norway is a constitutional monarchy, with a king as head of state and an elected parliament.

Profile

Political decisions are based on consensus building between the government, parliament, and the strong trade unions. In 1993 opposition to EU membership proved electorally popular for the SP.

In 1997 the DNA lost ground to the center-right, who formed a coalition led by Kjell Magne Bondevik of the KrF. The DNA returned to office in 2000, but suffered a crushing defeat in the 2001 polls. Bondevik, who had campaigned on a platform of using oil revenues to fund tax cuts and public service improvements, returned as prime minister. A notable feature of the election was the capture of 26 seats by the anti-immigration FrP, which had emerged during the 1990s.

Main Political Issue

EU membership

In a 1994 referendum, 52% voted against EU membership, previously rejected in 1972. Terms for accession, supported by government and industry, had been agreed, but opponents argued successfully that it would lead to a loss of control of national resources, notably fisheries and offshore oil. Membership was not an electoral issue in 2001.

A founder member of NATO, Norway continues to offer it strong support. Norway also became an associate member of the WEU in 1992.

The 1994 referendum decision to reject EU membership means that the European Economic Area (EEA) offers Norway its chief access to the European single market. As a Nordic Council member it is also associated with the Schengen Convention. In January 2002 Bondevik stated that there would be no referendum on joining the EU. However, a concurrent opinion poll suggested that a majority now favored membership.

Norway has played peacemaker in a number of major international conflicts, notably the Israeli–Palestinian conflict during the mid-1990s, and in Sri Lanka in 2002.

The government has been unable to control the ecological effects of acid rain, which is destroying its forests. Representatives of 25 European countries and Canada met in Oslo in 1994 and signed a UN protocol on reducing sulfur emissions.

Plans have been announced to almost halve the size of Norway's conscript army, which traditionally has absorbed most of the defense budget. It joined NATO in 1949. The overriding defense issue is the stability of Russia and the security of their common border. Five Russian diplomats were expelled in 1998 after a double agent revealed that Russia had extensive information on Norwegian defenses and oil industry.

Norway is Europe's largest oil producer; it also has sizable gas reserves. Most of Norway's electricity is produced by hydropower. In summer, the HEP surplus is exported. Fish and forestry are traditionally significant sectors: salmon farming, managed with particular efficiency, has grown rapidly, although with agriculture, they account for only 2.5% of GDP and 5% of the workforce. A March 2002 report warned that cod stocks in the North Sea were under threat from oil drilling waste products.

In 1986 northern Norway suffered radioactive contamination after the Chernobyl nuclear disaster. Norway has a tax on carbon dioxide emissions and was instrumental in securing agreement on the 1997 Kyoto Protocol on greenhouse gas emissions. In 1993, it lifted a ban on fishing minke whales, and in 2001 it allowed the export of whale products. It was also criticized in 2001 for a cull of (endangered) gray wolves and for plans to develop a coalfield on Svalbard.

It has been impossible to extend rail links further north than Bodø, inside the Arctic Circle. To reach the Lofotens or Narvik and beyond, the most common form of transportation is air. Some 5% of the world's total shipping tonnage is controlled by Norway, making it the sixth-largest shipping nation.

WHO ranks Norway as providing the world's third-best health care. The country's infant mortality rate is among the world's lowest, and life expectancy at birth is one of the highest. Spending is among the highest of OECD states. A new health plan announced in 2002 will place the high-spending hospitals under central control.

Telemedicine (online remote audio and image diagnosis) allows remote northern hospitals to obtain specialist consultations without having to send patients to the regional hospital.

The period of compulsory schooling was increased from nine to ten years, with effect from the school year 1997/1998. Most schools are run by municipalities. There are four universities; specialized colleges include the Nordic College of Fisheries. Promotion of continuing education kept youth unemployment down during the early 1990s recession.

Norway has low levels of crime, even by Scandinavian standards. Violent crime barely exists – the murder rate is one-fifth of that of Sweden, and there are considerably fewer assaults and robberies.

In terms of income distribution, the Scandinavian countries are the most egalitarian in the world, and the richest 10% of Norway's population owns much less of the country's wealth than is the case in other developed countries. Homelessness and social deprivation are very rare. Recent refugees from the Bosnian conflict are the most disadvantaged group.

The discrepancy between men's and women's pay is greater than in either Sweden or Finland, although still well below the European average. Social provision has been maintained even through economic recession. Benefits are generous.

Norway is a popular destination, receiving visitors from Germany, Sweden, Denmark, the UK, and the USA. Its winter tourism industry is based on skiing and was boosted by the 1994 Winter Olympics taking place in Lillehammer. Cruising along the fjords is popular with summer visitors. Areas within the Arctic Circle are a particular attraction in June, when tourists go in search of the midnight sun. Oslo has a reputation for good classical music and jazz. However, the strength of the krone and the high cost of living make Norway expensive.

Norway gained independence from the Swedish crown in 1905 and elected its own king, Håkon VII.

• 1935 DNA forms government.
• 1940–1945 Nazi occupation. Puppet regime led by Vidkun Quisling.
• 1945 DNA resumes power.
• 1949 Founder member of NATO.
• 1957 King Håkon dies. Succeeded by son, Olaf V.
• 1960 Becomes member of EFTA.
• 1962 Unsuccessfully applies to join the European Communities (EC).
• 1965 DNA electoral defeat by SP coalition led by Per Borten.
• 1967 Second bid for EC membership.
• 1971 Prime minister Per Borten resigns following disclosure of secret negotiations to join EC. DNA government, led by Trygve Bratteli.
• 1972 EC membership rejected in popular referendum by 3% majority. Bratteli resigns. Center coalition government takes power. Lars Korvald prime minister.
• 1973 Elections. Bratteli returns to power as prime minister.
• 1976 Bratteli succeeded by Odvar Nordli.
• 1981 Nordli resigns owing to ill health. Gro Harlem Brundtland becomes first woman prime minister. Elections bring to power Norway's first Conservative Party (H) government for 53 years. Kare Willoch prime minister.
• 1983 Conservatives form coalition with SP and KrF.
• 1985 Election. Willoch's H–SP–KrF coalition returned. Norway agrees to suspend commercial whaling.
• 1986 100,000 demonstrate for better working conditions. Brundtland forms minority DNA government. Currency devalued by 12%.
• 1989 Brundtland resigns. H–KrF coalition in power. Soviet Union agrees exchange of information after fires on Soviet nuclear submarines off Norwegian coast.
• 1990 H–KrF coalition breaks up over closer ties with EU (formerly EC). Brundtland and DNA in power.
• 1991 Olaf V dies; succeeded by son, King Harald V.
• 1994 EEA comes into effect. Referendum rejects EU membership.
• 1996 Brundtland resigns; replaced by Thorbjørn Jagland (also DNA).
• 1997 Kjell Magne Bondevik forms center-right coalition.
• 2000 Jens Stoltenberg (DNA) prime minister at head of three-party coalition.
• 2001 Right-wing victory in elections. Bondevik heads coalition government.