2. október 1995
Minister for Foreign Affairs and External Trade
at a Meeting of Honorary Consuls of Iceland, Reykjavik
Ladies and Gentlemen,
I would like to begin this short introduction by welcoming you to Iceland, to the Fourth Conference of Honorary Consuls of Iceland. I would also like to thank all of you for the interest and zeal which you have displayed by travelling from near and far to attend this conference. To me it is a sign of the importance and dedication which you attach to your tasks as Honorary Consuls of Iceland. You are our extended foreign service in your home countries and in many places you are the only Icelandic representation. Your service is invaluable for Iceland.
The situation in world affairs has changed significantly since we convened the last Consular Conference in 1986. One can see these changes being reflected in the foreign policy of Iceland but also in the changes that are now taking place in Icelandic commerce and industry. We want to convey to you both the practicalities resulting from these changes and the dynamism to be found in the Icelandic business community of today. Therefore we have chosen to present to you a program that is dedicated to trade, tourism and foreign investment in Iceland.
Ladies and Gentlemen,
First I would like to use this opportunity to give you a short overview of the main aspects of Icelandic foreign policy.
I have always given the co-operation between the Nordic countries Iceland, Denmark, Norway, Sweden and Finland a high priority. I have participated in the work of the Nordic Council as a minister and a member of Parliament. The Nordic countries have over the years forged a close relationship in political, social and cultural matters. Many Icelandic Honorary Consuls are familiar with the joint presentation of Nordic culture through exhibitions and various programmes in their own countries. In spite of the differences with regard to membership in a few international organizations, the Nordic countries have largely been in agreement with regard to basic questions on international affairs and we share common values. Lately, some doubts have been expressed about the future of Nordic co-operation, especially with the accession of Finland and Sweden to the European Union and the earlier membership of Denmark. The Nordic Governments have consulted on the ways and means to continue this important co-operation and the Government of Iceland has actively participated in this process. There is no doubt in my mind that all Nordic countries benefit from this co-operation.
The Nordic co-operation has also aquired a new dimension with increasing co-operation around the Baltic Sea and in the Arctic Region.
The Baltic Sea Council gives an opportunity for an intensive dialogue on political and economic issues among its members. It is of great importance for the Baltic countries, Poland and Russia and has a role to play in the integration of these former communist ruled countries into western structures. Through the Council the Nordic countries will forge closer ties to the neighbouring regions of Russia.
There is increasing interest in large scale exploitation of the resources of the Arctic and therefore a pressing need for the rational management of these resources. Various steps have been taken to increase the confidence and co-operation among nations of the area. The most important was the establishment of the Barents Council in 1993 by the five Nordic countries and Russia. The main focus is on co-operation in economic, technological and scientific issues as well as infrastructure.
In March of next year several countries with interests in the Arctic plan to establish a special Arctic Council, an intergovernmental forum for consultation and cooperation on Arctic issues. These number the five Nordic States, Canada, Russia, and the United States. The enhancing of environmental security of the Arctic states and people will be among the main objectives of the Council.
The Icelandic Government has stated that Membership of the European Union is not on the agenda and it aims to strengthen Iceland}s relations with the European Union on the basis of the Agreement on the European Economic Area. We maintain that the EEA Agreement secures Iceland}s vital economic and political interests. We will follow closely developments within the Union during the coming years and promote actively Icelandic interests in dialouge with the EU member states. This of course means that the developments leading up to the Intergovernmental Conference of the Union as well as the outcome of that event are of great importance to Iceland. It should be kept in mind that around 65 percent of Icelandic exports go to the European Economic Area market. Political complications in Europe can therefore have serious and direct economic effects in Iceland. Many Icelanders feel that membership of the European Union would go against national interests due in large part to the so-called common fishery policy which is totally unacceptable for Iceland.
Through the the Bilateral Defence Agreement with the United States and our membership of NATO we have succeeded in both securing our interests and contributed to common security and defence in the North Atlantic. The transatlantic link will continue to be the crucial component to European security. Since the end of the cold war organisations in the Euro-Atlantic area have been working on new security architecture to be established within the framework of the Organization for the Security and Cooperation in Europe. The backbone of this new achitecture will be NATO. It has successfully transformed itself to meet the new challenges, as proven by the North Atlantic Cooperation Council and Partnership for Peace and lately by opening itself to new member states. Three years ago we became associate members of the West European Union in order to have better possibilities to raise our security concern. Foreign affairs and security matters will play an important role at the Intergovernmental Conference of the European Union.
Through the United Nations Iceland has been an active participant in global politics and a contributor to many issues of vital interest to all mankind. The United Nations have sought to prevent and resolve conflicts and they have responded to security threats in the Balkans through the instrument of NATO. Signalling its willingness to shoulder new burdens, Iceland participated for the first time directly in United Nations peace-keeping with a team of doctors and nurses working in Bosnia-Herzegovina in 1994.
For the last sixteen years Iceland has contributed to the United Nations University by conducting a geothermal training programme for scientists from the developing countries. About 200 people from these countries have participated in six month courses in the utilization of geothermal energy in Iceland. These people are well aware of the level of know-how and the expertise that Icelanders have aquired in this field and have proven themselves to be valuable contacs for Iceland.
The entry into force of the UN Convention on the Law of the Sea in November 1994 marks a high point in a long process, in which Iceland has taken an active part. In recent years it has become increasingly clear that the extension of the economic zone by coastal states has resulted in mounting pressure being put on fisheries resources outside the Exclusive Economic Zone. In response, Iceland took an active part within the UN to negotiate a binding convention, based on the UN Convention of the Law of the Sea, to protect and manage straddling and highly migratory fish stocks.
Marine living resources can make an important contribution to food security in a world faced with rapid population growth. Such resources provide food and livelihood to millions of people and, if sustainably used, offer increased potential to meet nutritional and social needs, particularly in the developing countries. Clearly, the ability to satisfy global demand for food from the sea in the coming years will depend to no small extent on the adoption of responsible fisheries conservation and management policies.
It is a fundamental Icelandic policy that all marine resources should be harvested in a sustainable manner. This includes marine mammals. We have to treat the ecosystem of the oceans as a whole. Taking out one species for sentimental reasons is not constructive environmental policy. It can indeed be highly harmful. Iceland ceased commercial whaling ten years ago and has not conducted scientific whaling since 1989. Nevertheless, we are monitoring closely developments within the International Whaling Commission and taking part in regional consultations. We hope that scientific evidence and common sense will prevail in this issue, which is of vital interest to Iceland.
Ladies and Gentlemen,
One can safely say that our foreign policy is firmly rooted in the institutions that have served our interests so well in the past.
But let us now turn to the business at hand. For the Fourth Consular Conference we have chosen as topics three main themes, foreign trade, foreign investments and tourism. I think it its only proper at this juncture to quote the leader of Iceland}s fight for indenpendence, Mr. Jón Sigurðsson, who wrote before the turn of the last century, and I quote: "Freedom comes mostly from within a person, but the freedom which touches society as a whole is commerce, freedom can therefore not exist without commerce.", unquote.
Jón Sigurðsson realized that the bleakest moments in the history of this country came after our forefathers ceased sailing and trading in distant countries.
As you well know the mainstay of the Icelandic economy has been the fisheries sector from which the bulk of export earnings have been derived. It has been a long sought after goal of Icelandic politicians to seek ways to diversify the economy in order to broaden the base as much as possible. The fisheries sector in Iceland has suffered setbacks in recent years owing to drastic cuts in fishquotas, primarily the codstock. Other countries and areas have suffered because of the reduction in the fisheries worldwide. The impact of this reduction has been lessened in part due to higher prices for fisheries products on the world market. This sector has also suffered from a very common industrial malady, that is, over-investment, both on sea and land. The limits of economic growth based on domestic fisheries may have been reached.
The Icelandic fisheries sector has shown admirable adaptability when going through rough patches at home or abroad. Icelandic fishing vessels have ventured outside the 200 mile Exclusive Economic Zone to supplement their catchquotas and the two largest sales organizations Icelandic Freezing Plants Corporation and Iceland Seafood International Ltd. have, along with other companies in that field, tried to adapt to changing times.
One can say that we have reached a turning point in the development of the Icelandic fisheries. Companies have in recent years been merging and therefore growing bigger and financially stronger. As a result they are more competitive internationally. The companies in this sector have been looking into investments abroad in the fishing, processing and marketing. Investments have, for example, been channeled to diverse locations such as Namibia, Kamchatka in Russia and Rostock in Germany.
Honorary Consuls who have either participated in commercial activities with Icelandic companies or had the opportunity to assist them in their business endevours are now asked to look at the whole picture, so to say, from a different perspective. Icelandic companies would welcome wholeheartedly indications of possible business ventures, be it either, in cooperation with, or investments in, foreign companies involved in the fisheries sector. The Icelandic sales organizations are constantly on the lookout for new species of fish or additions to those species already sold through their marketing systems. This is where the greatest potential for economic growth in this sector is to be found.
While Icelandic fisheries have been trying to adapt to changing times the Icelandic tourist industry has been experiencing the best of times. Professionals in this sector are pleased with developments so far. Tourists are now spending more money which has more than compensated for the slight slowdown in the yearly increase of visitors that the tourist industry has been experiencing. Tourism in Iceland is now in second place only to the fishing industry as the main source of foreign currency. The growth in this sector has in recent years been phenomenal. More and more people make their livelihood from tourism, either the whole year or supplement their income during the peak tourist season as is the fact in many farmsteads in rural Iceland. It is a fact that the infrastructure needed for staying competitive in this field is steadily being improved.
One of the aims of the tourist industry is to extend the tourist season as much as possible. This will be done among other things by promoting incentive tours, conference locations and the fact, of course, that Iceland is an unspoiled and unpolluted country. The Honorary Consuls are often the first contact with Iceland. It is therefore of great importance that they be kept up-to-date with the trends affecting this industry. I call upon the Icelandic tourism industry to establish firm contacts with these friends of Iceland in order to make them better equipped to promote Iceland as the destination for the tourist of today.
In recent years Iceland has lagged behind other European countries in attracting foreign investors. We have of course had our successes but they have been few and far between. It has been said that Icelanders have a hunters mentality. That mentality dictates that one should go out by oneself and bag the biggest game alone. In the pursuit of foreign investments the people and institutions working in this field must pull together. That is the surest way to guarantee success. When a foreign investor is scouting a location he not only mesures the actual site were his proposed factory will be built, he measures the country where he is going to invest his money. If the factory site is a swamp he will not build and if the politics of the country are fractured or unstable he will not invest.
Iceland is one of the most attractive investment locations in the Northern Hemisphere. We have a well educated bilingual workforce, we have low energy prices and we have a clean unpolluted environment. We have a sound economy and one of the lowest inflation rate in Europe as well as a stable political climate.
When we are talking about foreign investment we are not only referring to aluminium smelters or ferro-silicon plants. The Icelandic economy is small and an investment of any size will have more overall impact here than in bigger countries. The proposed enlargement of the ISAL aluminium smelter will, by itself, put Iceland on par with other countries in Europe.
It is in the field of foreign direct investments that the Honorary Consuls of Iceland can have a great influence. We welcome investments in Iceland be they big or small.
Ladies and Gentlemen,
The coalition government of which I am a member has in its policy statement put special emphasis on external trade. We intend to follow through both in word and deed.
In August of this year I had the honour of accompanying our President, Madam Vigdís Finnbogadóttir, on a state visit to China. I have felt that it is important to use an opportunity such as this to promote Icelandic business interests. It was the first time in the history of our Foreign Service that a Foreign Minister is in charge of a business delegation with interests in a specific foreign market. We had meetings with Chinese Government Ministers, Mayors of major cities, company representatives and held special Icelandic-Chinese trade seminars. I was very proud to represent the Icelandic business community in this far away country.
In the fields of computer technology and high-tech machinery for industry Iceland has resources that have all the possibilities of increasing considerably their share in Icelandic exports. That was confirmed during the trip to China.
We have always been quick to adopt new technologies and in some fields we have been very successful. This applies to the so-called information superhighway where we hold one of our numerous per capita records. No other country has as many Internet connections as Iceland, by a wide margin, and Icelandic companies have tried to exploit this emerging market in many areas.
From health care management software to computer virus exterminators, from data base systems to advanced computer graphics, Icelandic companies have found clients. For example IBM, Microsoft and Apple have seen reason to buy products from Icelandic software houses.
Icelandic software and consulting companies have used advanced computer communications through the worlds first all digital telephone system to communicate with their foreign clients. For these specialized companies this all but eliminates the disadvantage caused by distance from other countries.
The high-technology products and services have revolutionized some aspects of traditional industries and the knowledge and experience have been useful stepping stones for export products. The high-tech machinery developed for the fishing industry is case in point. Specialized machinery in this field has enabled the fishing industry to incease productivity greatly. In some fields we are world leaders.
In various fields the foundations for the future are being laid. Icelandic farmers have been striving for international recognition in the field of organic farming. There is a growing world market for organic farm products which Icelandic farmers are eager to exploit. Icelandic farmers have an edge on farm producers in other countries because of the very limited use of chemicals and pesticides in Icelandic farming.
There are of course a number of other fields that deserve to be mentioned but have been left out because of the limited time I have at my disposal.
Dear Honorary Consuls,
The next Consular Conference will be held at the beginning of a new millennium, a new century. I do not posses a crystal ball but I do know that a society that wants to prosper has to adapt itself to changing circumstances. If the fisheries sector cannot be relied upon to sustain economic growth in the future then other sectors of the econonmy have to shoulder that burden.
As Minister for Foreign Affairs and External Trade I see the promotion of Icelandic trade interests abroad as one of my main tasks. The Icelandic Foreign Service and its Honorary Consuls will play a leading role in this respect. I consider it a collective task of those induviduals that represent Icelandic interests abroad to promote Icelandic business interests and investments.
The Icelandic business community attaches great importance to your presence here today. I hope that the trade exhibition will not only give you a practical overview of Icelandic business today but will offer you valuable information for your future work as well.
Many people have put long hours into the preparation of this conference and I would like to use this opportunity to thank those present including the Trade Council of Iceland and the Iceland Tourist Bureau for their valuable contribution.
Finally, I would like to extend to you, the Honorary Consuls, my sincere gratitude for the devotion to Iceland that you have shown with your attendance here today. I feel sure that you will continue your good work in the future for the benefit of Iceland and all Icelanders.