Good Money: Norwegians Go to the Polls Amid an Uproar Over their Country’s Investments

Norway’s $1.87 trillion sovereign wealth fund, seeded with oil revenues, is the biggest investor in the world. Holding shares in 8,500 companies in 69 countries, its managers are tasked with ethical investing, a fitting strategy for a country with a robust social safety net and an excellent track record in advocating for human rights through institutions like the Nobel Peace Prize and the Norwegian Refugee Council. 

Yet many Norwegians like Sindre Bangstad, a professor at the Oslo-based Institute for Church, Religion and Worldview Research (KIFO), feel that something is amiss. “Since the Hamas atrocities of Oct. 7, 2023, and Israel’s subsequent retaliation in Gaza, the oil fund has actually increased its investments in Israel by 66 percent,” wrote Bangstad in a recent Guardian op-ed. 

News about these investments became a major issue in the Nordic country, especially after the July killing of Palestinian activist Awdah Al Hathaleen, who appeared in the Oscar-winning, Norwegian co-produced film, “No Other Land,” in the West Bank. 

After the uproar, the Norwegian government under Prime Minister Jonas Støre moved quickly to divest the wealth fund of some of its Israeli holdings, NewsinEnglish.no reported. The country recognized Palestinian statehood last year, wrote Al Jazeera. Still, some investments linger, as NewsinEnglish.no noted.  

 Now, as voters prepare to go to the polls to elect a new government on Sept. 8, an unusually public debate over how the sovereign wealth fund operates could influence which political party leads Norway’s next government, as the election race is tight. 

To date, Støre’s Labour Party has held its lead over its traditional rivals, the Conservatives, even as the right-wing, populist Progress Party now appears to have replaced the Conservatives as the prime minister’s biggest political threat. 

Meanwhile, Labour is only polling at 28 percent, however, meaning that even if they come out on top with that percentage of the vote, they will need to either partner with left-wing parties such as the Socialist Left and others, which would mean that the new administration would focus on improving the country’s welfare system and fighting climate change, or, alternatively, make a deal with conservative parties that would tilt the country more toward business, focusing on cutting regulations and taxes, and drilling for more oil, noted Stratfor. 

Still, right-wing parties – the Conservatives, Progress Party, Liberals and Christian Democrats – are currently projected to win 85 seats – just one more than needed to secure a majority in parliament, polls showed. 

Their government could make big changes, however, impacting the tight labor market in the country, analysts say. 

The Progress Party, for example, wants to reduce immigration from African, Asian, and Middle Eastern countries to zero. Leader Sylvi Listhaug has little regard for Muslims, who comprise 3.4 percent of the country’s population. Many anti-immigrant Norwegians blame outsiders for a spike in crime in the region. 

Still, the sovereign fund issue makes it tricky for Labour to form a coalition because the Socialist Left has said it won’t join with Labour unless it promises full divestment, something Labour has been resisting.  

Since June 30, the fund has divested from 23 Israeli companies out of 38 it held stakes in. Finance Minister Jens Stoltenberg said in August that the fund would divest from more companies but Labour and parliament have resisted a blanket ban on Israeli firms or on those multinationals with sales and services available in the occupied Palestinian territories. 

Advocates of divestment say the investments contribute to the violation of international law by investing in companies active in the occupied Palestinian territories. Opponents, however, argue that following Norway’s formal divestment process is necessary and that singling out a country might violate its ethical rules. They add that a blanket ban is overreach. 

Regardless of the uproar over the fund and its impact on the election, fund officials say the issue has chipped away at trust in the government, which has traditionally been high in the country of about 5.5 million people.  

“This is my worst ever crisis,” the oil fund’s CEO Nicolai Tangen told Swedish daily Dagens industri, adding that he regrets that he did not realize that owning shares in an Israeli fighter jet company, as Israel bombed Gaza, would be problematic. “We should have either taken the holding to the ethics council, or sold it outright. This is a serious situation because it is about trust in the fund.”