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Norways Prime Minister Erna Solberg is not frightened of the low oil prize. She expects it to rise again.

© Ruben Sprich/Reuters

Interview with Erna Solberg: 'The low oil prize does not trouble Norway's Prime Minister too much

Can Norway afford high development aid and climate finance with dwindeling oil prices? Prime minister Erna Solberg is not so worried. She expects the prices to rise again. Interview by Dagmar Dehmer.

Norway is a big donor for the international vaccination initiative Gavi. You pledged 6.25 billion Norwegean Cronas for the next five years at the Berlin conference last week. Why?

We are among the three largest donors for Gavi. It has been a political consensus that it is important. 2005/2006 there was a bit of a discussion if vaccination is the right thing to do or if there should be a concentration on strengthening the health systems in the recipient countries. But I think Gavi has shown that it is a supplement. This discussion has stopped. Six million saved children’s lives are an enormous achievement.

Vaccinations are that successful?

I am a co-chair for UN secretary general Ban Ki Moons advocacy group for the Millenium Development Goals (MDGs). Gavi is really helping to reach one of the MDGs: fewer children are dying. This public private partnership is the most innovative thing that was developed in the last ten years in the health sector.

Norway plays an important role in development and climate financing. Can you keep that position now that the oil prices are falling?

Of course the goals we have in development support will also depend on the growth of the Norwegean economy. But even if we have lower oil prices and a lower investment level in the oil industry, we still have an estimate for growth this year and next year. We are an economy in transition trying to have more other types of businesses and activities in other fields than only the oil- and gas related ones. We rely heavily on the German industry Good growth in Germany means good growth for Norwegean non-oil related businesses. And this will also increase our investments in development. It is all interlinked.

You are not only talking about gas, do you?

No. We are a large producer of hydro-mineral products. But if you go and buy a car, you might see that quite an amount of parts comes from Norwegean production. We have a non oil and gas related sector, which is larger than a lot of people know who look from the outside. And of course we are selfish. We have other products. We need to diversify our economy more. Our growth will impact how much more we spent every year on development. We have a goal to reach one percent of our Gross Domestic Product (GDP) which we want to spend on development every year. I do not think that our support for development aid will decrease. If Norwegean nurses and teachers shall continue to give their tax money into development aid then they want to see a fair distribution of that money. That is what I always tell leaders from the developing world and the emerging economies. And that they need to deal with internal resource mobilisation like taxation. But I think in the Norwegean public there is the feeling that the support is the right thing to do. And many countries try to learn from our experience with the oil fund to manage their income from the extractive industries better.

With the falling oil prices, investment in the industry goes down. Will the stop the Norwegean expansion into the Arctic?

The cost level has been a challenge for the whole oil industry. Not just in Norway. It is a world wide problem that we have a high cost level. The lowering oil prices will put pressure on the high cost level. That means: You have to use new technologies. You have to be more efficient. And one of the things Norway has is a large technology based industry on services and development of oil production beside the oil industry itself. The last year has been a lot of concentration on cost cuts in the industry.

What happens if the oil prize stays low?

If the low prices continue for a long time marginal fields of course will have a problem being developed now. But we have some large fields with a very low cost level. There will still be stimulus from this. If you go further north of course we just have put out a new round of concessions. But that is something to be developed in 2030 or 2035. And I think all oil and gas companies expect in their long term plan not a prize level of 50 Dollars per Barrel (159 Litres) in 2030. There will be a rising prize. And they will be in the research part to see if there are resources worth while for exploration.

Do you see any risk from the Euro and the Euro-zone right now?

For Norway not directly. Although on the non oil sectors we are quite dependent on Sweden and Germany. If the Euro-zone slows down the German economy and then the Swedish one then this would have an impact on our diversification because there would be less pull from the two largest economies we are most interlinked to on the non oil and gas sector. Hopefully Germany will have a steady growth. Sweden has quite a nice growth for the time being. They have an unemployment problem. But their economic growth is quite high.

How did the attack on Charlie Hebdo in Paris affect the Norwegean discussion with Muslims? In the election immigration already played a big role.

It was not a big topic in our election. It was a very small topic. The 2013 election was less about immigration and integration issues then the 2009 and 2007 and 2005 elections. I was minister of integration 2005 and those years that debate was large. 2013 it was little. I do think it has changed a bit. Of course people who are islamophobic are raising their voices even more. We had some small demonstrations inspired by the German Pegida-movement. But I do not think we have a big discussion about Islam. It is more about extremism. That is a big topic in Norway as in most other European countries. How do you make sure that young people feel that by participating in our society there is hope and future? So the do not get romantic about radical islamist movements. How do we mobilize our whole social life to make sure that our societies values are more worth than those of the “Islamic State”. That is the bigger debate. And of course there is debate about which measures we should use if there is a terror threat. But I think we are quite good at separating that debate from the overall debate about Muslims. We have so many moderate Muslims in our society. At least I feel there has not been a big push on that discussion than on the question how do we fight terror and how do we avoid to become self censured. That those who feel they need to criticise the church or Islam are allowed to do so without feeling pressure from the whole society.

So you seem to be more successful in differentiating the terror debate from the debate about Muslims and integration.

Maybe as a smaller society political correctness in Norway is just stronger.

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