Speech to Thai-Norwegian Chamber of Commerce

There are several reasons why it gives me such great pleasure to address the Thai-Norwegian Chamber of Commerce.

First, Thailand is Norway's oldest partner in Asia. Nowhere else in Asia is our bilateral trade expanding more rapidly. Thailand and Bangkok have become home ground for many of Norway's leading companies.

Second, Thailand is not only an important country in itself. It is becoming a stepping stone to other countries in the region. Working with Thai partners, drawing on their extensive experience is an obvious asset to take advantage of.

And third, Thailand is the prime spokesman for political dialogue - between ASEAN countries - between Asia and the US, between Asia and Europe.

The world needs this dialogue between the most dynamic regions.

A few years ago, it was commonplace to state that we were heading towards major trade wars between economic blocks. That did not happen. And those who held that view, and who argued most convincingly in favour of that view, are today equally fervent in spreading the opposite message: We are heading towards globalization, or globalization is here already: Almost anything can be produced anywhere and sold anywhere.

Instead of confrontation - we are rather embarking upon a path of dialogue. We have seen the need - and we are discovering the potential.

We must overcome the period when mechanisms of political dialogue between regions were too weak. In particular there is a lot to gain from stronger dialogue between Europe and Asia - the "missing link" in the new inter-regionalism that is gradually taking shape.

We share an increasing number of common challenges. Norway and Thailand have both taken advantage of the globalization of the world economy. But we also share some of the serious challenges of an integrated world.

The promise of eradication of poverty, the hope and belief that hundreds of millions of people, in particularly in this part of the world, will rise from the shacks and slums, and see a more prosperous future, where their children can become educated and have a better life than their parents - this is the historic chapter we are opening.

Gradually, working conditions and workers rights must be harmonized upwards. With rising income, people will require more than a paycheck. There will be wider social needs. The information revolution will lead to an urge to attain, not only material well-being, but also the other benefits that people enjoy in other regions.

Some practices are already under scrutiny world wide, not least in the light of the Convention on the rights of the Child and numerous ILO conventions. People in my country are particularly concerned with child labour, stealing the childhood from millions, and which must be abolished.

But we are also faced with other gigantic historic management challenges. We live in a world of finite resources. And Europe, a region that has lost much of its forests, important species, and where pollution has taken its toll - knows that growth must be managed, guided and directed so that we may leave for future generations, an earth that will give them at least the same opportunities as we have today.

In the exponentially growing economies of South East Asia, people will ask the following question: How can we strike the right balance between growth and environment. How can we achieve sustainable development?

A lot is happening in Asia that has never happened before. We have never experienced such economic growth, among a comparably large population, living on land and depending on water resources which are already under strain.

Today, air pollution is suffocating many of Asia's cities. I am aware of the problems experienced right here in Bangkok where air pollution is expected to triple between 1991 and 2000. This is not only a problem for the health of the environment but for people, their quality of life and the over all performance of a country's national economy.

What we have experienced in many countries is that the economy is growing faster than what the infrastructure can carry. Here in Bangkok, about 500 new cars take to the road each day - an annual increase of 14 per cent and the region's highest.

A greater number of vehicles means more pollution. And more cars driving on the same number of roads amounts to worse traffic, increased air pollution and loss of economic efficiency. According to the Asian Bank, this region needs an unlikely 40 per cent increase of paved roads by the year 2000 in order to accommodate the expected increase in traffic.

Europe spent centuries to reach its present level of prosperity. In this region, countries jump up the ladder of growth, securing development, modernization and welfare for millions. Life expectancy and the health situation is improving all over the region.

And yet, environmental degradation looms as a threat over all these achievements. We already have evidence to prove that growth rates could have been higher if traffic congestion and pollution were cleared up. New diseases occur. The life span of city dwellers decreases. Some studies even indicate that the average child in an Asian city will lose several IQ points by the age of seven because of exposure to lead.

The next century may well be one of great global environmental crisis, with the main pressures coming in Asia. But it need not be. Asian countries still have the opportunity to make a series of timely decisions before economic growth and performance present them with the bills of overburdening both their countries and their resources.

The future of East Asian countries will be strongly influenced by how well they manage to foresee the risks which, if unchecked, might undermine the gains of the past forty years. Investments in water development, means of mass communication, energy, sanitation, - they can be made in time. Success will largely depend on the political and administrative ability to find the right balance between freedom of market forces and sufficient forward-looking public management.

Countries in Asia can still learn by experience and avoid the many mistakes made in industrialized countries. Growth at the expense of the environment did not begin here in this region. It is we in the West who first have developed at the expense of the environment. London still holds the record for the world's worst killer smog, a distinction achieved in 1952. But many cities in developing countries have been running close. Today, Beijing has become one of the world's most polluted capitals, with air 35 times dirtier than London's.

Previously, we were used to think that environmental damage was regionally limited. That is no longer the case. We are in this together. Just as it ignores national borders, air pollution doesn't discriminate between rich and poor.

And even more so - the burning of fossil fuels has consequences beyond the regions - it effects the whole global climate, threatening to disrupt natural balances upon which human activities are based. The course of development which the populous countries of Asia takes, will have a decisive impact on life on earth. Coal-fired growth in China may have devastating effect on the global climate, making no difference between people living in Beijing, Bangkok or Oslo.

We are all faced with the challenge of sustainable development as defined by the "World Commission on Environment and Development" - to meet the needs and aspirations of the present generation without compromising the ability of future generations to meet their needs.

At the same time we in industrialized countries cannot and should not ask developing and middle-income countries to hold back on their quest for growth and prosperity. We cannot say, sorry, we filled up the waste-basket - there is no more room for you to develop.

What we can say, and what we do say is this: We have made experiences. Some of them cost us dearly, and we are stuck with the huge costs of cleaning up past mistakes. Do not copy the worst of our past.

We offer our cooperation. Tap our bank of experience. Use our technology. Leap-frog past the most polluting stages of development. Learn from our legislative experience. Prove that sustainable development is possible.

To see to it that the quality of growth means a sustainable development requires that democracy works - that the necessary decisions can be made for the long-term good. In a modern economy there are needs which are not articulated by market forces alone. These are public needs, defined by people and their political representatives.

A growing economy needs regulatory checks and balances that can guide economic operators on a sustainable path. Some years ago, governments all over Europe engaged in a strategy for reducing the use of leaded fuel. We did that by imposing extra taxes on this fuel, making un-leaded fuel relatively cheaper. This policy worked. Today, leaded fuel is nearly absent from our petrol stations and air quality has improved significantly.

Jakarta has recently introduced lead-free fuel. But the price mechanisms work the other way around - the lead free fuel is 50 per cent more expensive than the leaded kind. This will hardly work. We need to use the market mechanisms. The right economic incentives are vital.

Using taxes and levies may be costly - and unpopular. But we must look at the long-term effects. What are the economic consequences of caring for a growing number of young and old sickened by air pollution? What is the impact on the competitiveness of the economy? What is the impact on investors with a long-term perspective?

We have enough evidence to state that rising environmental costs one day - and it may come soon - may outweigh the benefits of unchecked economic growth. We already see the consequences on children's mental and physical health. That is the most persuasive warning signal because no resource is more vital than the human brain.

We need public policies and regulations to guide the market mechanisms. And we need innovative companies that can unleash the technological breakthroughs that we need to move towards sustainability.

I appreciate the opportunity provided by this meeting in the Thai Norwegian Chamber of Commerce to further deepen contacts between our business communities. What does Norway have to offer? And what have we to gain? In spite of the differences between us, it is remarkable how well we fit together.

Both countries have responsibility for management of marine and coastal resources. We are both oil-producing countries and face the environmental challenges associated with this industry.

The Norwegian companies represented here today are the finest in the field of environmental technology and all of them are meeting the world's most stringent environmental requirements in their own home market.

Oil and gas, environmental technology, ship's equipment, hydropower and information technology - these are the priority sectors of our own Asia plan. These sectors are given priority because the companies concerned have a strong industrial base in Norway and because they have a successful track record on the international market.

We offer a variety of products, services and experience. Statoil, a world leading petroleum company, is already operating on the Thai continental shelf. Norsk Hydro, the world's first fertilizer producer, has been selling fertilizer to Thailand for many years - their Viking Ship logo is as well known on the Thai countryside as in Norway. Norconsult is involved in major telephone expansion planning. The monitoring buoys of OCEANOR, known as the Sea Watch Thailand project, secures first class monitoring of Thai waters, giving a major contribution to sound management of marine resources.

These companies - together with a number of others present here today - are ready to expand their activities in Thailand. I am certain that our experience will contribute to the effort of our Thai partners to strike the right balance so that growth will be in harmony with nature and humanity.

That is the challenge into the next century - to secure a development pattern that is sustainable. And we all depend on a successful outcome of this effort - because we are all in the same boat.