OSLO (Realist English). Norway’s finance minister Jens Stoltenberg has defended the country’s $2tn sovereign wealth fund, the world’s largest, following mounting criticism of its investments in Israeli companies linked to the war in Gaza and West Bank settlements.
In an interview with the Financial Times, Stoltenberg said the fund had faced “dilemmas” but insisted it had struck the “right balance” by selling nearly half of its Israeli holdings earlier this summer. “The system is working. It’s possible to reconcile being a big sovereign wealth fund with ethical guidelines,” said the former NATO secretary-general, who returned to domestic politics this year ahead of parliamentary elections in September.
The fund, built from Norway’s oil and gas revenues and holding stakes in about 1.5% of all listed companies globally, is under pressure from opposition politicians who have called for a complete withdrawal from Israel and even for the resignation of its chief executive Nicolai Tangen. Smaller parties are demanding emergency parliamentary questioning of Stoltenberg, while the main centre-right parties have criticised him but warned against politicising the fund.
Stoltenberg stressed that while the fund is owned by the Norwegian people, it must remain at “arm’s length” from the government. “It is crucial for the fund not to be used as a foreign policy tool,” he said. Former prime minister Erna Solberg, leader of the Conservatives, echoed this view, arguing that the fund’s credibility depends on keeping politics out of investment decisions.
The controversy underscores a deeper dilemma: how democracies with sovereign wealth funds navigate public opinion, foreign policy, and ethical guidelines. A Norwegian official admitted: “You risk upsetting one or the other — and that is why you don’t see many sovereign wealth funds in democracies.”
According to Stoltenberg, the fund rests on three principles: saving only surplus petroleum revenues, investing in a balanced global portfolio, and restricting annual government withdrawals to the expected real return. This year’s transfer amounts to NKr542bn ($53bn), about a quarter of the state budget.
Still, Stoltenberg warned against complacency. “There’s always a danger that we may become complacent and believe the pension fund will save us. That’s not the case,” he said.
