President Trump aims to create a US sovereign wealth fund to enhance economic strength and lower taxes. Nicolai Tangen, CEO of Norway's sovereign wealth fund, emphasizes that it involves more than ambition and capital. Essential factors include a long-term view, political stability, transparency, and strict spending limits. Norway's fund caps yearly expenditures at 3% of expected returns, ensuring discipline and strategic governance. The success of Norway's fund relies on these principles, which differ from the aspirational slogans of fiscal sustainability set by the Trump administration.
You need to allocate capital to it, right? What has worked for us in Norway is to have a very long-term view on what we do. It has broad political anchoring. It means that when you have a change in parliament or in government, you do not change the way we invest.
While Trump's executive order emphasized slogans like 'fiscal sustainability' and 'strategic leadership', Norway's success comes from discipline, transparency, and political continuity. The country strictly limits how much of the fund can be spent each year - capped at just 3% of the fund's expected real return.
We are the most transparent fund in the world. So I think if these factors combine, that has made this a successful venture.
To replicate Norway's model would require much more than just ambition or capital, emphasizing the importance of political stability and clarity in funding.
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