Biggest economies

Is there a possibility of another US-like country in the world?

The data table below showcases forecasted nominal GDP for the world’s 15 largest economies in 2026, 2028, and 2031. 

Rank	Country	2026F ($B)	2028F ($B)	2031F ($B)	Change
1	🇺🇸 U.S.	32,384	35,066	39,031	20.5%
2	🇨🇳 China	20,852	23,260	27,497	31.9%
3	🇩🇪 Germany	5,453	5,819	6,352	16.5%
4	🇯🇵 Japan	4,379	4,744	5,128	17.1%
5	🇬🇧 UK	4,265	4,675	5,403	26.7%
6	🇮🇳 India	4,153	5,059	6,792	63.5%
7	🇫🇷 France	3,596	3,776	4,117	14.5%
8	🇮🇹 Italy	2,738	2,887	3,128	14.2%
9	🇷🇺 Russia	2,656	2,552	2,615	-1.6%
10	🇧🇷 Brazil	2,636	2,879	3,379	28.2%
11	🇨🇦 Canada	2,507	2,759	3,139	25.2%
12	🇦🇺 Australia	2,124	2,293	2,590	22.0%
13	🇲🇽 Mexico	2,121	2,327	2,667	25.8%
14	🇪🇸 Spain	2,091	2,285	2,572	23.0%
15	🇰🇷 South Korea	1,931	2,094	2,357	22.1%

Reading The Trillion Dollar Baby

• Norway becomes an independent nation in 1905
• In 1909 - After three years of political turmoil, parliament passes the final version of the ‘concession law, which ensures that Norway’s natural resources, principally hydro, would revert to the state when developed by foreign investors.
• In 1973 - Arab oil producers had formed the cartel known as the Organization of Petroleum Exporting Countries (OPEC), which slashed production and triggered a quadrupling of oil prices, thus ending a halcyon era of abundant fossil fuel.
• Norway population in 1974 - 3.85 million people
• 1974 - Lots of oilfields around Norway being discovered since 1969.  Firm and wise stewardship of this endowment was called for.

In the five years since oil was discovered in 1969, Norway had learned a great deal about the powerful oil industry and it was now ready to extract the maximum possible share of revenue. It had set up a national oil company and given it a mission to generate direct ownership and profits for the state, and to drive the involvement of locals in the development of the industry. It had created a policy that allowed the state to take a direct equity stake in oilfields should they prove to be very profitable, without having to invest in the exploration costs. It was what might be known as a cake-andeat- it policy. But on the revenue front, the existing tax regime still meant that any super profits would be collected by the companies, not the government of Norway.

So in 1974 - finance officials explained that companies would now pay a special tax of 40 per cent on top of Norway’s already high corporate tax rate of 50 per cent. 

Despite Norway’s boldness, Big Oil kept its rigs in Norway’s part of the North Sea, known as the  Norwegian Continental Shelf (NCS), because the region remained an attractive place to invest and because it could gain no support from Norway's conservative party. Even though conservatives are traditionally great advocates of lower taxes, Norway’s conservatives agreed with the higher rate and refrained from political opportunism. This is remarkably different to what has transpired in many other countries, where oil companies have been able to win support by dividing and conquering the political class. Even to this day, both sides of Norwegian politics remain firmly in favour of the tax regime.

Unlike other resource-rich countries, Norway was showing how to become the master rather than the servant of resource multinationals. That November 1974 meeting was a decisive step along the way towards reaping the maximum national benefit from the country’s resource wealth.

As a society, Norwegians have remained true to the sentiment put to visiting oil executives in the late 1960s of wanting to eschew the euphoria of oil riches. This record is all the more remarkable because many other countries, and not just poor ones, have blown their boom-time windfalls on largesse, whether in the form of grand edifices, military hardware, white elephant ee or cash splashes for swinging voters.

• Oil has been a problem for middle and low income countries. But other developed countries have also not managed it very well. Examples of UK bailout. US, Canada, Australia - can't be said to have astutely managed it.
• Norway is alone in the developed world in having successfully kept most of the windfall from its oil and gas wealth — 90 per cent of cash flow now accrues to the Norwegian state.* And only Norway has set up sound institutions to manage this boom-time bonus for generations to come
• Written in 2016/17:  At the start of its oil era, Norway was a middle-income country with a per capita GDP just ahead of Greece, and by the end of the 1970s it was heavily indebted to the rest of the world. Its net foreign liabilities as a share of GDP peaked at 40 per cent. But its effective taxation and disciplined savings strategy have since turned it from a net debtor into one of the world’s biggest creditors. Its net foreign assets are worth 185 per cent of GDP, or around $760 billion, and they’ve risen even more sharply when converted back into local currency as a result of Norway’s flexible exchange rate (one advantage of not being part _ of the euro). During a twenty-year period of relatively high oil prices, Norway salted away $870 billion in a long-term sovereign wealth fund. Despite lower oil prices, the fund is still growing and is on tratoc hikt $1 trilliin o20n20 .
• Other developed countries have not fared thus. Even after resource boom, they have ended up with increased debt numbers.  
• Norway offers the best example in the world today of how to govern extraction of non-renewable resources, but it is by no means perfect. The country made mistakes in the early years by allowing development to run ahead of safety, leading to the loss of many young lives in the 1970s and 1980s. The focus on onshore development involved high risks that pushed the technological frontier and led to massive cost blow-outs. The country is now licensing new development in the Arctic region, which is questionable on both technical and moral grounds. Norway can also be criticised for relying too heavily on oil production, which has meant that about one-quarter of its national income has been directly or indirectly tied to a single commodity. But there’s a great deal that can be learned from the Norwegian experience. Its long-term strategy and firm management,
• Norway is the small country that’s become the big exception to the resource curse thesis.

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In the second chapter, the book dives into the history of Norway. How for 400 years it was either under Danish or Swedish rule before 1905 independence. How it was poor (Munch as an artist from poor Norway). How it began ship building, to diversify its basic economy. Then 1940s, Germany, and the resistance movement. Hauge. Defence Capability. Post war, 18 years of labour rule. The desire to save for future. Until the 1970s when the discovery of oil. 

Instead of unleashing an oil boom, Norway adopted a policy of controlled development and moderation so that the country could develop private-sector capacity and government institutions to benefit fully from its new-found wealth. As Hauge and his team of confidants saw it, Norway needed to do much more than produce another commodity — the oil should be used to help the country to industrialise and generate lasting returns. This was the genesis of a strategy that would handsomely reward Norway for decades to come.

Treaty for North Sea between UK and Norway

Jensen

Initial three years poor discovery while lot discovered on UK side

Norway was sort of fearful of discovering oil.  "Norwegians knew from the outset that oil could have disastrous

consequences both for the economy and society as a whole. And

when oil was discovered they became even more fearful. “The country feared the social and economic consequences of an oil boom. The Groningen gas field had ruined the Dutch economy. "

Al-Kasim

Waded through a mountain of material

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Third Chapter

• Norwegians had designed their exploration programs based on the depth of drilling, not the amount of money spent. Number of wells down to certain depths
• Oslo Govt announced to the world in 1969  (day before Christmas) that  Norway had unearthed one of the biggest offshore discoveries ever made, one that is likely to remain in production until the middle of this century.
• Time and time again, Norwegians describe themselves as a lucky country, even though it was Norway’s firm management that helped to make its luck.
• Ekofisk was the field
• Phillips had located a gigantic ten by five kilometre field 3000 metres below the seabed. Ekofisk proved to be one of the world’s biggest offshore oilfield, with 3.5 billion barrels of oil and 162 billion cubic metres of gas.

The discoveries cluster in certain parts of the world, covering 46 countries, and are of significant magnitude for each country’s economy. The average discovery is worth 1.4% of a country’s GDP today, based on the cash value from their production or net present value (NPV).

Of the total 1,232 discoveries, these are the 20 largest oil and gas fields:

Field	Onshore/Offshore	Location	Discovery	Production start	Recoverable oil, past and future (billion barrels)
Ghawar Field	Onshore	Saudi Arabia	1948	1951	88-104
Burgan Field	Onshore	Kuwait	1937	1948	66-72
Gachsaran Field	Onshore	Iran	1927	1930	66
Mesopotamian Foredeep Basin	Onshore	Kuwait	n/a	n/a	66-72
Bolivar Coastal Field	Onshore	Venezuela	1917	1922	30-32
Safaniya Field	Offshore	Kuwait/Saudi Arabia	1951	1957	30
Esfandiar Field	Offshore	Iran	1965	n/a	30
Kashagan Field	Offshore	Kazakhstan	2000	2013	30
Aghajari Field	Onshore	Iran	1938	1940	28
Tengiz Field	Onshore	Kazakhstan	1979	1993	26-40
Ahvaz Field	Onshore	Iran	1953	1954	25
Upper Zakum Field	Offshore	Abu Dhabi, UAE	1963	1967	21
Cantarell Field	Offshore	Mexico	1976	1981	18-35
Rumaila Field	Onshore	Iraq	1953	1954	17
Romashkino Field	Onshore	Russia Volga-Ural	1948	1949	16-17
Marun Field	Onshore	Iran	1963	1966	16
Daqing Field	Onshore	China	1959	1960	16
Shaybah Field	Onshore	Saudi Arabia	1998	1998	15
West Qurna Field	Onshore	Iraq	1973	2012	15-21
Samotlor Field	Onshore	Russia, West Siberia	1965	1969	14-16

***

What it says about Norway's way of running business:

 

First, Phillips could well have been drilling in British waters had Norway not secured a favourable  maritime boundary with the United Kingdom. Ekofisk is almost equidistant between Norway and the UK and is tucked just inside the southeast corner of Norway’s part of the continental shelf, along with

several other major finds that followed. Second, the drilling operation was being closely monitored and managed by government " officials who, while having very limited experience at this time, had their country’s best interests at heart. Third, the discovery didn't fead to an oil rush as happened in neighbouring Holland and the UK, and numerous other resource-rich nations at this time. The response in Oslo was more of shock than awe, and the government subsequently took a moderate approach to development so that the nation could cautiously, methodically and astutely develop the policies, institutions and industrial capacity to deal with and fully benefit from the exploitation of Norway’s new-found wealth.

its public service had from the outset a strong tradition of focusing on the national interest, gained from more than half a century’s experience in dealing with powerful corporate interests.

**

Economic Rent

When, in the early twentieth century, German and French interests wanted to develop the country’s vast river systems to produce hydro-electric power, Norway’s leaders adopted an approach that the  orwegian state, as owner of the resources, should seek to obtain what economists call the ‘economic rent’.

British economist David Ricardo.

While Ricardo is best known for his theory of comparative advantage, he also developed the concepts of surplus value, which could be defined in two ways. The first was profit, which he accepted as fair and reasonable, but a second type of surplus was called economic rent, generally obtained by monopolising control of fertile land, or other natural resources that were limited in supply. The landlords of feudal times, for example, became rich by controlling the most fertile land. Other classical economists such as Adam Smith were equally loathing of the aristocracy’s ability to extract such unjust economic rent while at the same time creating immense inequality. In the case of Norway, however, its economic advisers looked for ways to control the economic rent for the benefit of the entire country.

This thinking was prominent from the time of hydroelectric dams

Henry George, who developed a radical interpretation of Ricardo’s theory of economic rent in his 1879 book Progress and Poverty. George argued that any surplus, or rent, accumulated as a result of developing natural resources should accrue to the public as a whole. In addition, the Concession Act included a key principle of returning the ownership of the hydro operations to the state after sixty years, without the payment of any compensation.

Historian Helge Ryggvik writes: ‘Norway had both a legal framework and a long political tradition of how to relate to large foreign companies seeking to exploit other countries’ natural resources

Value of collecting economic rent and retaining state control of such assets.