Continued from page 1

The country’s $550 billion sovereign wealth fund, set up in 1996, owns through its investments some 1.9 percent of the European stock market and holds about 1 percent of traded global shares.

But despite the government’s efforts to protect the economy from bubbles, the national wealth has created unbalances that are difficult on Norwegians not involved in the oil sector.

With virtually no unemployment, wages are high - the average salary equals almost $7,000 a month. That, and a strong currency are backfiring on industrial workers as companies consider moving to cheaper countries or outsource production to nations like India, which already has major IT contracts with dozens of Norwegian companies.

“Our competitiveness has been weakened year by year during the last decade,” says Tor Steig, from the Confederation of Norwegian Enterprise.

Other experts note that spending oil money on health services, housing and expanding the public sector creates a bigger work force that - while ensuring that standards remain high - does not directly contribute to the nation’s productivity.

And the prosperity that comes with oil has a high price tag. A recent survey by the Swiss bank UBS, ranked the capital, Oslo, as the most expensive city in the world.

Many Norwegians near the border with Sweden cross regularly to their eastern neighbor - itself one of Europe’s most expensive countries - to stock up on food, alcohol and tobacco at prices often 40 percent lower than at home.

The signature Big Mac burger of McDonald’s costs the equivalent of $5.79 in Norway compared with $3.54 in the United States and an average of $4.38 in the European Union, according to the Economist’s worldwide Big Mac index that uses the price of that fast-food item as one measure of prosperity.

Still, Norway’s oil riches to some extent trickle through the economy, which is largely built around the one sector. And as the oil wealth fund keeps growing, it provides a valuable backstop for the economy.

During the 2008 global downturn, it proved to be a lifesaver, with the government providing billions in extra funds for public building projects and helping keep the wheels of the country’s economy turning.

The authorities also secured liquidity for Norwegian banks and provided targeted tax breaks - estimated at a total of $1.3 billion - over two years for companies with deficits.

The country is not totally impervious to the economic turmoil in Europe. Any major stock tumble would hit the oil fund, shrinking Norway’s fortune. Also, a renewed global recession would hurt Norway’s export-driven industry and could drive down oil prices, further slashing revenues.

For now, though, those prospects do not appear to worry Norwegians, who seem to be exempt from the economic pessimism choking off consumer spending elsewhere in Europe.

Anniken Baronsen, the manager for a jewelry store on the outskirts of Oslo, says sales have grown between 5 percent and 8 percent this year compared with a year earlier. “People have the money,” she said.