journal of european integration history revue d'histoire de l ...

Choosing the Periphery 87
economy during the following twenty-five years was due to the governmental desire
to maintain them.
Growth policy from 1945 was designed on a long-term basis and for structural
reasons it was based on exports. Governments gave priority to developing the merchant
navy and the export industries based on inexpensive hydroelectric power.
Throughout the 1950s and 1960s foreign trade constituted approximately forty per
cent of Norway's Gross National Product (GNP). Export revenue was thus decisive
for the national revenue. In the long run, exports would eventually provide income
to finance the many ambitious modernisation programmes, including the welfare
state. Most of the export economy required a heavy degree of imported capital,
such as machinery and raw materials. For example, means of production constituted
as much as eighty-eight per cent of all imports in 1955. The capital requirements
made Norway a net importer of capital. In 1956 gross debts to foreign lenders constituted
twenty-five per cent of the GNP. During the next decade this tripled in absolute
terms, corresponding to thirty-six per cent of the GNP.
The financial problem of Norway's modernisation strategy was always lack of
capital and the danger that international preference areas got in the way of export
revenues. The corollary was that the Norwegian governments were liable to participate
in international preference areas that were appropriate for their specific growth
policy. Indeed, from the perspective of current and capital accounts, the Norwegian
government always argued at the OEEC Council of Ministers that quota liberalisation
occurred too rapidly, the terms of payments in the EPU were too hard, while
also deploring the transition to convertibility. However, it always defended the
OEEC co-operation schemes in any domestic political debate. Within the government
itself the impact that investment needs had on the country's foreign commercial
policy was stated more precisely. When discussing the problems that would
arise from convertibility, Arne Skaug, then ambassador to the OEEC and later minister
of Trade, argued that
“in the future the Norwegian economy will depend on, de facto if not de jure, Norway
participating in a greater economic unit. Others rather than ourselves must do
the savings and provide the capital formation we need to develop our industries”. 33
In the following section I will show that support for an OEEC-wide industrial free
trade area in 1957-58, as well as EFTA membership in 1960, was a logical consequence
of the export-oriented growth policy, which also led to interest in the EEC.
In accordance with the compromise made in 1935, the trade union movement
and industrial organisations supported export-led growth as a modernisation strategy.
Industry was to be made competitive, and through incomes policy the governments
sought to moderate wages to respond to variations in international-market
conditions. Wage moderation would be exchanged for investments. Gross investments
would normally lie at above thirty per cent of the GNP and be subjected to
planning. The interest rate was kept artificially low to stimulate the demand for pri-
33. Riksarkivet, Oslo [National Archives] (henceforth RA), Privatarkiv Knut Getz Wold [Private archive
of Knut Getz Wold], box 169, Note on convertibility by Arne Skaug, 14 October 1953.