Prime Minister, Your Excellencies, ladies and gentlemen,

It is a great pleasure for me to address this business seminar here in Maputo. I am pleased to see that so many distinguished representatives from the business communities and the authorities of our two countries are present. I take it as a sign that there are interesting business opportunities to be explored between Mozambiquan and Norwegian companies.

A vast geographical distance is separating Mozambique and Norway. There are major differences between us in history and cultural heritage. Yet, Norway enjoys a close and friendly relationship with Mozambique. Globalisation has worked to bring us even closer together also in economic terms. A thriving economic relationship between Norway and Mozambique will be an important contribution to the success of the various forms of cooperation that already exist between our two countries.

(Trade policy issues)

Before I turn to our bilateral commercial relations, I wish to address some important aspects of the multilateral framework, within which we are operating. In particular, I would like to point to a central multilateral issue relevant to both our countries: Predictability in international trade.

The World Trade Organisation provides a multilateral framework that ensures that the same rules apply for all countries - large or small. It thus contributes to stability and predictability in international trade. The WTO ministerial conference in Seattle did not reach agreement on the launch of a new round of broad trade negotiations. This is deeply regrettable. We still believe that the early launch of broad multilateral trade negotiations under the auspices of the WTO will result in a further strengthening and broadening of the WTO rules, and in further trade liberalization. It will thereby serve the interests of all members of the WTO.

Even though a number of developing countries have experienced a considerable improvement in their standard of living during the past 15 years, the wealth gap between the developed countries and many developing countries, especially the least developed countries, is widening. One of the main issues in the context of a new round is safeguarding the interests of developing countries. The WTO must strengthen its internal cohesion. WTO members must make a concerted effort to ensure that developing countries, and particularly the leased developed countries, be better integrated into the world trading system on just terms.

We look forward to a dialogue with Mozambique and other WTO members on these issues in the months ahead. One of our major challenges in the months to come will be to adjust the working procedures in the WTO to ensure that all stakeholders, and not least the developing countries, have a fair say in the negotiations.

(Bilateral economic relations)

Let me now turn to trade and development relations between Mozambique and Norway. Norwegian companies have been active in Mozambique for many years. They are involved in the energy sector, within transportation, communications and many other sectors.

During the last decade, Norwegian companies have been involved in many infrastructural development projects in your country. These range from the reconstruction of the port in Beira to the construction of transmission lines and hydropower stations in various parts of Mozambique. Training and competence building have been an essential part of these projects.

Business contacts between Mozambique and Norway have developed fairly rapidly in the last few years. Our trade figures are not too impressive, but considering that our economic relations are so new, there is no reason to be disappointed. The fact is that through development cooperation, many Norwegian companies have had the opportunity to get acquainted with the country and the people of Mozambique. Around 20 Norwegian business representatives took part in the FACIM exhibition last year. I am pleased to note that almost 50 Norwegian business people are accompanying me to Mozambique, and are participating in this seminar today.

(Strategy for Norwegian support to private sector development in developing countries)

Given the importance of productive sector development, my government took the initiative a year ago to launch a new strategy for Norway's participation in private sector development in the South.

The strategy is based on the needs of the developing countries themselves. Its aim is to establish a basis for cooperation on the developing countries' own terms. Stimulation of long-term investments that generate jobs in developing countries will be given priority. Considerable emphasis is also placed on improving the institutional framework and business environment in developing countries.

The strategy establishes principles and guidelines for Norwegian support for private sector development in developing countries. It emphasizes measures to:

improve national framework conditions, promote investment in developing countries, make active use of the Norwegian knowledge base, including the expertise of Norwegian companies, reinforce support of small and medium-sized enterprises, increase the use of local procurement, as opposed to tied aid, promote Norwegian trade with developing countries, and strengthen South-South trade.

Mozambique, Uganda and Sri Lanka were invited to work with us as pilot countries for the implementation of the strategy.

Why did we choose to invite Mozambique as a pilot country? To put it in short, we see Mozambique as one of the most exiting countries and one of the most promising markets in Southern Africa today. The transition to democracy has been impressive. You have launced a string of ambitious economic reforms. Your privatisation program is probably the most successful in Africa to date. Your 10 per cent economic growth is most impressive, even more so since you have also reached single-digit inflation. In short, (and although you still have a long way to go), Mozambique has already won its place as one of Africa’s development successes.

Norwegian cooperation with Mozambique in private sector development will initially focus on strengthening the general conditions and environment within which the private sector operates. This will mean support for the development of basic infrastructure like power lines and roads, and for strengthening the capacity of strategic public and private institutions. These activities will have a positive effect on the development of the local private sector and will attract foreign investment. For the current year, 10 million US dollars have been allocated for pilot activities within the strategy.

In this context, how can Norwegian companies contribute to a growing Mozambican private sector?

Firstly, Norwegian companies can provide advanced technological and economic know-how, especially in some sectors like hydropower, transport, communications, and also forestry, shipping and water supply.

Secondly, a large number of Norwegian companies have experience from working in Africa, not least from the development field. This has increased their knowledge of the region and their understanding of the importance of integrating training into project development.

Last but not least, Norwegian companies bring with them management policies and traditions, securing labour rights and participation in the workplace. This is a tradition we think is important to share with our partners in development.

Moreover, I would like to emphasise that building partnerships between private and public actors is a pivotal issue on the Government’s agenda for strengthening the private sector in Africa. In implementing our strategy it is crucial to work closely with Norwegian commerce and industry. The dialogue between Norwegian development cooperation authorities and the Norwegian business community should therefore be strengthened. This dialogue is also essential in order to accommodate the necessary instruments and incentives for the business community to invest in a country like Mozambique.

(Investments)

Investment in developing countries is an area where cooperation with Norwegian industry is of particular interest.

The developing countries, including Mozambique, clearly state a wish for foreign investments. They are positive to involvement by serious foreign investors. But experience shows that the bottleneck lies not only in the investment potential in the developing countries. There are also limitations to the willingness of foreign investors to gamble on something they consider to be too risky. We need to encourage and motivate investors to invest in developing countries. In this respect, the issue of risk reduction is essential.

In response to the need for risk reduction, we decided a few years ago to set up an investment fund for developing countries, NORFUND. The Fund was set up as a limited liability company. All the capital, which today amounts to about USD 66.2 million, is provided by the Norwegian Government. This is expected to increase to some USD 200 million in the next few years. NORFUND generally pursues two investment strategies: direct investment and involvement in local investment funds. Both strategies are designed to stimulate profitable commercial development in developing countries.

Last year NORFUND joined forces with the Mozambican investment company MINCO. Their activities have only just started, but one investment project is now ready to be signed. This project is linked to the Grupo Madal, and I look forward to participating in the signing of this contract later today. This is a significant event as it is the first direct Norwegian investment on a commercial basis in Mozambique. I am confident that we shall see more of such partnerships in the future.

(Conclusion)

In conclusion, I wish to say that Norway has stood by Mozambique since independence. We still do. We want to be part of your future development endeavours – assist you where we may be of help, support you where we have something to offer, and do business where opportunities arise.

Ladies and Gentlemen. I thank you for your attention.