the fund contribute to both curbing the appreciation of the krone and maintaining its stability. at the end of 2005, the market value of the pension fund ’ s portfolio was roughly 73 per cent of gdp. as shown in the chart, the value of the fund is rising rapidly and may continue to do so in the years ahead. the fund is now approaching the nominal value of one year ’ s gdp and may reach two in the course of the next decade. on the other hand, norway, like many other countries, is facing substantial fiscal challenges. financing the large pension payments that will have to be disbursed in the coming years will be very demanding. final remarks to sum up, norway has a market economy and a large government sector. the way in which economic policy is oriented today reflects the knowledge gained and the lessons learned. we know from experience that fiscal policy alone cannot ensure a high level of employment. the structure of the labour market and wage formation are probably of greater importance. the direct regulation of credit, interest rates and capital movements collapsed and was phased out in the 1980s. price regulation no longer plays a role as a macroeconomic instrument. the scope of business policy has become more general. the most important contribution monetary policy can make to sound economic developments in the long term is low and stable inflation. low and stable inflation has contributed to solid growth in the global economy in recent years. thank you for your attention.

have been kind to the norwegian economy. prices for our imported goods are falling in relation to prices for goods we export. norway ’ s terms of trade are improving. the impact of the rise in oil and gas prices is particularly strong, but the terms - of - trade gains for the mainland economy have also been high. one aspect of this is that trade in services with india is increasing. petroleum and luck is, however, not the whole story behind the high per capita income in norway. we have also been successful in seizing the opportunities that have been offered by changing international environments. the foundations for the norwegian welfare state were established some two hundred years back in history. long - term economic developments the napoleonic wars, which tormented europe in the early 19th century, brought some great changes to the face of europe. norway took this opportunity to adopt a constitution and establish a number of central governmental institutions, including a central bank. norway was severely hit by the economic crisis that followed the war, and around 1820 norway ’ s gdp per capita was lower than in many comparable countries. in the second half of the 1820s, a new period of economic expansion started. the upturn gathered momentum from the middle of the century. an event which had a considerable impact on norwegian shipping and economic history took place in 1849 when england repealed all navigation acts regulating the right to transport goods to and from england and its colonies. this new and more competition - friendly trade environment spurred a rapid build - up of the norwegian commercial fleet. norway suddenly became a major exporter of services. as the chart shows, the tonnage of the norwegian commercial fleet increased almost six - fold from 1850 to 1880. by 1880, norway had built up the world ’ s third largest commercial fleet. in the latter part of the 1800s, norway benefited greatly from free trade and free capital movements and became a relatively prosperous country. access to international technology, competence and capital were important when the first industrial base was established in the late 19th century. the banking sector also expanded rapidly in this period. as this chart shows, value added in manufacturing and services became more important and increased as a share of total gdp. employment and value added in agriculture, fisheries etc., on the other hand, declined markedly. by the beginning of the 20th century, the standard of living in norway did not lag behind that of other european countries. this change in industry structure is necessary and lies at the heart of economic development. the second half of the 19th century also represents a golden