Opening statement

(1. Introduction)

Your Excellencies, Ladies and Gentlemen,

It is a great pleasure for me to address this seminar on trade and investment, and I am pleased to do so in the presence of so many distinguished representatives from both the business communities and the authorities of our two countries.

I would like to use this opportunity to brief you quickly on the current economic situation in Norway and on some of the main priorities in our industrial and trade policy, before turning to the bilateral relations between Norway and South Africa.

(2. Norway's economy.)

Looking at the big picture, Norway is in a fortunate position. We have no foreign debt, our currency is stable, and we have a comfortable surplus in our national budget. The inflation rate is around 2%, unemployment is around 4%, and the interest rate is around 5%. Almost all economic indicators point in the right direction.

Norway is blessed with abundant natural resources. The exploitation of these natural resources has led to technological advances in a number of areas where Norwegian companies are considered to be among the world leaders. Today, applied information technology and telecommunications are Norway's fastest growing business sectors.

Being a small country, openness to international trade has been crucial for the development of our economy and for securing our prosperity. Norway now exports nearly half the goods and services we produce, and we import nearly half of what we consume. With less than one thousandth of the world's population, we control around 1 per cent of world trade and 10 per cent of the world's ocean going fleet, and Norway ranks as the world's second largest oil exporter.

The fact that Norway's economy is in good shape does not mean, however, that our future is free of any challenges. Far from it. Let me mention some of the most important issues we are facing in our industrial and trade policy.

3. Industrial policy issues.)

Due to our dependency on income from the petroleum sector, we need to strengthen our land-based economy. We know that our petroleum resources will run dry one day. We have to prepare for that day by giving the other sectors of our economy a chance to develop and prosper.

A very important part of our strategy is to focus on small and medium-sized companies. They represent the bedrock of our economy. They are of vital importance in terms of employment, and in terms of maintaining the viability of rural districts and regions. We are therefore working to develop measures that will make it easier to establish and to run businesses, for instance by reducing bureaucratic paperwork.

A major challenge is related to the increasing globalisation of the world economy. Small and medium-sized companies have, however, limited capabilities of meeting this challenge. The Government can lend them support by offering information and advice, and by stimulating the creation of networks and alliances. And we can ensure that adequate financial instruments are in place.

Another challenge is related to the rapid technological changes taking place. The ability to adapt to new challenges and to be in the technological forefront will probably be more decisive than ever before. Those businesses and countries that are able to meet these challenges will be the winners of the future. Norway wants to be among these winners.

In order to meet this objective, the Norwegian government seeks to stimulate the process of innovation in companies, for instance by encouraging co-operation with the universities and the research community. By strengthening our educational system and by funding research and development, we want to keep Norway at the vanguard of technological development in the coming decades.

4. Trade policy issues)

As a small nation, we have to pursue an active trade policy aimed at gaining access to important markets and securing a system of equal and fair conditions for international trade.

As a member of the European Economic Area, Norway is fully integrated in the European internal market. Since the EU countries account for around three-quarters of Norway's foreign trade, full access is of vital importance. Currently, we are facing three main challenges in this context:

• The European Union has recently decided to start negotiations with six new countries in Central and Eastern Europe. As Norway is not a member of the EU, we will have to follow this process closely in order to prevent any negative effects for Norwegian interests.
• The date for the establishment of the European Economic and Monetary Union (EMU) is getting closer. We need to carefully analyze the effects this may have for Norway and take the appropriate actions.
• The EU is working on a plan of action for the internal market. Norway will have to follow this closely to make sure that Norwegian companies will benefit from any improvements in the internal market through the EEA agreement.

Similarly, the World Trade Organisation is of vital importance to Norway because it provides a multilateral framework ensuring that the same rules apply for all countries - whether big or small. The Norwegian Government hopes that the upcoming Ministerial Conference in the WTO in May will adopt a working plan that could ease the beginning of a new round of negotiations starting in 1999/2000.

A new round should not just further improve market access for goods and strengthen the multilateral trading system, since Norway gives high priority to the issue of extending the General Agreement on Trade in Services to include shipping, as well.

New issues, such as trade and the environment, should also be taken into account. Any agreement in this area should both promote the possibility of implementing national and international environmental policies, and at the same time avoid new trade barriers as a result of environmental concerns being exploited for protectionist purposes.

(5. Bilateral economic relations)

Having conveyed to you some information about the current economic situation in Norway and shared with you some of the main issues in our industrial and trade policy, let me turn to trade relations between South Africa and Norway.

There has been a positive and fairly rapid development of trade between Norway and South Africa over the last few years. Norway's exports cover a broad range of products, with machines, chemical products and fish being the most important. We import from South Africa almost three times what we export, but your exports are mainly concentrated in one area - mineral ores - while your exports of other products like fruits, vegetables and wine are more modest in volume.

One might say that the total trade figures are not too impressive. But taking into account that our economic relations are so "young", there is no reason to be disappointed. In addition, one should take into account that the trade statistics do not include trade in services or other forms of commercial cooperation like investments. For instance, Norway's income from shipping services in South Africa is estimated at around twice the value of our exports.

What is probably the most important fact is the broad range of Norwegian companies involved in South Africa. Today we estimate that some 150 Norwegian companies are active in the South African market in one way or another. Most of them are engaged through agents or local representatives, while around twenty companies have established a physical presence in South Africa through their own offices or through joint ventures. Their activities cover areas like the chemical, metal and building industries, as well as energy, telecommunications, shipping and fish processing.

In short, we see a considerable interest from the Norwegian business community for increased involvement in South Africa. There's no better proof of this statement than a look at the size of the business delegation accompanying us. South Africa's assets, such as infrastructure, banking and financial systems, investment regulation and political stability make the South African market attractive.

It should also be duly noted that there are no major problems in our bilateral economic relations. Both Governments are eager to do their utmost to stimulate closer commercial co-operation.

Let me add that we see South Africa as a potential hub for Norwegian activities in the whole region of Southern Africa. The Norwegian Trade Council has, with the support of the Ministry of Trade and Industry, launched a plan of action for Southern Africa. Through this plan, which includes targeted market studies and information activities, we aim to identify market opportunities and to stimulate the Norwegian business community's interest in doing business in Southern Africa.

(6.Conclusion)

This seminar takes place in the context of a new era in our bilateral relations. Much has already been achieved in terms of developing trade and other forms of economic cooperation. This gives reason for hopes for the future. We need to build upon what has been achieved by supporting already existing business relations, as well as to stimulate the establishment of new business relations.

It is my hope and wish that this trade and investment seminar will result in both parties getting to know each other better, and that it may contribute positively to the strengthening of our economic relations, which will be to the benefit of the welfare and prosperity of the people in both Norway and South Africa.

Thank you for your attention.