I have written a lot about the need for pension reform in Venezuela, imagine how I feel when I read about the problems facing Norway, which has been contributing to an investment fund since 1996 and the fund now has US$ 165 billion split 60%/40% between fixed income and equity investmentd. Compared to this, the Alaska Permanent Fund “only” has US$ 29 billion. Now, there are only 4.5 million Norwegians versus 25 million Venezuelans, with my country’s population growing much faster.
Norway’s problem is that next year oil production will start going down and the pension fund may run out of money. So, they are considering extending the retirement age to 67 from the current 62. As I noted before, in Venezuela people retire after 25 or thirty years of service, implying that many retirees are in their late forties and early fifties. This in a country with no investment fund, declining oil production and a large population.
Venezuela did set up an investment fund in the 70’s, which had US$ 20 billion in its hayday, and was quickly used up in the 80’s as oil prices dropped. A new Macroeconomic Stabilization Fund (FIEM) was started in the last year of the second Caldera administration reaching US$ 6.3 billion and most of those funds were used up in 2002. Thus, we clearly have not had the required discipline to even sustain such a fund in time.
How I envy Norway’s problem.
3:04:02 PM 
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