Barely a week passes without the working population being deluged with data or swamped with stats regarding the burgeoning pension crisis. Perhaps this is a good thing: maybe people are finally cottoning-on to the fact that, as life expectancy rises and fertility rates fall, state pension provision is becoming increasingly unsustainable.
The pension dilemma is not peculiar to Britain, but it’s certainly not one likely to bother Norway, probably the world’s richest nation.
After large deposits of oil were discovered in the North Sea off the Norwegian coast in the 1960s, the country became the world’s seventh largest exporter of black gold and, though there has been a decline in oil revenues in recent times, discoveries of rich deposits in the Barents Sea in 2013 could vitalise Norway’s oil industry.
Unlike Britain, Norway has managed its oil-related windfall spectacularly well, building a sovereign wealth fund which has grown to such a size that by last year, every Norwegian citizen became a paper millionaire. While most of Europe remains hamstrung by low economic growth or burdened with colossal debt, or both, Norway has quietly amassed a huge fortune which, according to figures released by its central bank, have reached 5.11 trillion crowns ($828 billion).
The Norwegian government has been parsimonious with the surplus that has built up in its state pension fund, mindful that one day, the oil will run out.
Yet great wealth can cause problems for it attracts opportunists, the unscrupulous and shysters of every hue, so it’s not exactly surprising that spurred by a number of ambitious politicians and equally zealous bureaucrats, Norway’s capital, Oslo, became a candidate to host the 2022 Winter Olympics.
Once Stockholm, Lviv in Ukraine and Krakow had withdrawn their candidature, citing a variety of reasons, Oslo was, up until a month ago, the firm favourite to overhaul Beijing and Almaty in Kazakhstan after the IOC’s Working Group Report, published in May and presented to the organisation’s executive board in July, was gushing in its praise for Oslo.
The report pointed out that Oslo already boasted 95 per cent of the 24,200 hotel rooms required by the Winter Olympic host city, while it wasted little time highlighting problems such as those relating to air quality in Almaty and Beijing.
The IOC’s clipboard holders heaped praise on Norway’s transport, airport links and medical services in order that the final application for Parliamentary approval, which includes the all-important guarantees of state financing, could be made.
Initially, that approval was scheduled to be rubber-stamped next week, but increasingly vociferous opposition to spending £2 billion of taxpayers’ money grew gradually louder. Even an opinion poll commissioned by Oslo’s bid committee revealed that only 36 per cent of Norwegians were in favour of hosting the 2022 Games.
The final straw was the publication of a 7,000-page IOC document which listed the perks and benefits IOC board members, dignitaries and their flunkies demanded when visiting Norway before and immediately after the Games. In short, the IOC’s requests bordered on parody.
Access for IOC dignitaries to stadium tickets, hospitality areas and transport were to be expected, but once they were made public, the list of additional IOC demands proved too much for Norwegian taxpayers.
Indeed, the list enraged the usually sanguine Norwegians until they finally decided that they didn’t want to spend £2 billion, probably significantly more, hosting the 2022 Winter Olympics and so a month ago, they withdrew their application, much to the IOC’s chagrin. Democratic nations are increasingly turning their backs on hosting large-scale events such as the Olympics and World Cups. Apart from the tarnished nature of what has become a murky bidding process to secure either event, both are viewed as being inherently wasteful and a drain on resources, while the ridiculous demands made by the likes of the IOC and FIFA are met with contempt by the people asked to pay for them.
Perhaps the near-collapse of the western world’s financial system six years’ ago has a silver lining after all. The prevailing sense amongst western electorates that hosting these events has absolutely no economic benefit whatsoever has taken hold; it will be difficult to dislodge.
It’s not long since French politicians expressed relief that Paris failed to be chosen to host the 2012 Olympic Games.
Despite being the long-term favourite to welcome the Games for the first time since 1924, Paris was pipped at the post, a remarkable stroke of luck which saved the nation around €6 billion.
Saving money and putting resources to better use elsewhere has become the new norm.
For instance, twelve months before work was scheduled to begin on the Stade Marcel-Picot in Nancy for Euro 2016, a €70 million project to add 15,000 seats and a retractable roof, boosting capacity to 32,000, the city’s urban committee announced it had “given up on Euro 2016 and the renovation of the Marcel Picot stadium.”
The €70 million could be put to more productive use elsewhere. In this instance, it meant the construction of a dozen all-weather five-a-side pitches / tennis courts for use all year round by the city’s citizens.
Prior to winning the bid to host the 2020 Olympics, the head of Tokyo’s Olympic bid committee said that the bid costs would be halved – from $150 million to $75 million. Madrid did the same.
America too appears to have had enough of paying for bureaucratic junkets, though it has nothing to do with affordability.
Rather, it’s the result of an ongoing commercial dispute between the IOC and the US Olympic Committee.
Ironically, however, until they were staged in the same city 52 years later, Los Angeles in 1932 were the only Olympic Games to record a profit. Atlanta, in 1996, is the one city to have followed suit – and that includes London 2012.
Even before the financial collapse of 2007-08, there was little prospect of any Olympic Games, winter or summer, making money, an uncomfortable economic fact which has gradually resulted in a subtle linguistic adjustment amongst the political classes. Replacing any notion of a financial return on investment is the much more esoteric talk of ‘legacy’.
This slow, well-considered shift in language ensures that any hard measure of economic success could be conveniently sidelined and means that even the most outrageous claims regarding returns on investment could be accommodated. Fortunately, the Norwegians saw through the IOC charade.
Following Oslo’s decision to pass on the 2022 Winter Olympics, one wonders for how much longer bodies such as the IOC and FIFA can continue to sell their tarnished, highly-priced wares to democratic countries. In an era of heightened economic awareness, where the phrase ‘value for money’ must be accompanied by hard, accurate calculations, the answer, surely, is ‘not much’.