Ladies and gentlemen,

It is a great pleasure to be able to address you here today and launch the panel discussion ahead of us. The issues under examination here are of very major concern to inhabitants of Arctic regions – not least us in Iceland. Arctic issues are of direct and self-evident significance for Iceland and the Icelandic government strongly emphasises positive co-operation with the country's neighbouring states in this region.

In recent decades, Arctic issues have steadily moved to the foreground, as the significance of the region has become ever clearer to the international community. This is primarily due to information on the technological and economic feasibility of developing the rich oil and gas resources of the Arctic.  Extensive geopolitical debate is focused on the changes which are now occurring in northern regions as a result of climate change and melting of the polar ice cap. There are numerous indications that these changes are proceeding more rapidly than previously assumed and are most likely inescapable.

The impact of climate changes, both positive and negative, on the lives of Arctic peoples is steadily growing. The business environment will change, with new opportunities opening up while others disappear. Global warming and changing environmental conditions impact the marine biosphere, altering species' migration patterns and possibly resulting in relocation of local fish stocks.

These changes also bring a variety of risks, of which we must be conscious. Expanding exploration and utilisation of Arctic oil and gas resources, minerals and fishing stocks, together with increased vessel traffic, can threaten the environmental security of the region. Here all Arctic nations have common interests at stake.

Current technology makes it possible to utilise resources which were previously inaccessible. But we must not define “resources” in a narrow sense. The ecosystem, biodiversity, and human settlement and culture in the Arctic are also resources. Protection may sometimes comprise the best utilisation and resource exploitation must not be decided upon solely from traditional perspectives. The ideology of sustainable development must be applied, in order to prevent over-exploitation, with a view to the interests of future generations. It is important to maintain an environmental, social and economic balance which will ensure welfare rather than short-term profit. Resource utilisation in the region must not disrupt the lifestyle and cultural balance of indigenous peoples who have made their homes in these regions for thousands of years.

Climate change does not only create risks, but also new possibilities. In the not-so-distant future, the Arctic may well prove to be a region of opportunities. Some experts are of the opinion that the Arctic Ocean could even be ice-free in late summer within a decade and that it might be relatively easy for vessels designed to sail through ice to navigate in the region.

If these forecasts prove correct, we could witness a major upswing in the Arctic when new northern sailing routes open up, connecting the older industrialised nations of the North Atlantic to rapidly growing economies in the Far East. This could reduce the sailing time from Central Europe to Asia by over 40% and from Norway to the US West Coast by around 30%.

Improved access to Arctic nature also increases possibilities in tourism. Interest in natural life and communities in the Arctic is growing and has boosted the number of travellers in regions which until very recently were well off the beaten path. The travel industry can provide a strong stimulus where business and industry lack diversity, creating the basis for service industries which serve local residents as well as tourists. The high cost and infrequency of air travel in the Arctic, however, definitely impedes the growth of the travel industry. There are few direct connections between Arctic destinations, which is clearly an obstacle to many people wishing to do business in the region.

Recent years have witnessed a strong increase in cruise ships sailing in Arctic regions. It is a cause for concern, however, that many of these vessels are not outfitted for sailing in ice and may not be equipped to deal with possible mishaps. While these new opportunities should be used to good advantage, it is important to ensure that travel in the Arctic is environmentally sound and complies with specific rules. The objective is to protect the vulnerable natural environment of the Arctic while at the same time ensuring the safety of travellers.

The Arctic appears clearly to be rich in both oil and gas  resources. They are, however, not unlimited – eventually these energy supplies will be exhausted. Even if the best available technologies for extraction are applied, such undertakings are not without risk, as the latest example from the Bay of Mexico shows only too clearly. Failure to comply with strictest environmental requirements there will have horrific consequences for people and the environment. The Arctic includes some of the world's largest fishing grounds, which we definitely wish to maintain in perpetuity, long after the oil and gas reserves are exhausted, and this also requires a strategy of sustainable development.

It is worth bearing in mind that the Arctic is also rich in renewable resources, including forests, wind power, geothermal and hydropower, as well as containing much of the world's reserves of fresh water. Renewable resources can be harnessed efficiently to provide support for economic development in the region. Iceland has a long and positive experience of this, as 80% of all energy used in Iceland comes from renewable sources. Icelanders only use fossil fuels for transportation and the fishing fleet.

Few regions have welcomed Internet communications as warmly as the sparsely settled Arctic. In today's global information society, effective Internet communications make all the difference. All Arctic states therefore emphasise the development of a high-speed fibre-optic network throughout the region. The Arctic Portal demonstrates clearly how the Internet can link together residents in the region, providing a general forum for Internet communication and information dissemination on the current situation and changes in the Arctic. The importance of robust Internet links for the entire business environment in the Arctic goes without saying.

Ladies and gentlemen,

Like other Arctic nations, it is to Iceland´s direct advantage to ensure that natural resources in the region are utilised sustainably and that extraction of fossil fuels and other large-scale industrial development does not destroy the sensitive terrestrial and marine environments, including rich fishing banks. We must not forget that although various states and federations of states may participate in developing a strategy for the Arctic, the prime concern is to enable the region's indigenous peoples to maintain their cultural traditions and right to self-determination, while at the same time benefiting from industrial development and new technologies. These are the concerns Iceland will emphasise wherever and whenever Arctic issues are up for discussion.