Foreign policy address to the Storting

Check against delivery
Russian version

Mr President,

In foreign policy, as in all policy areas, it is individual issues that attract attention: new settlements in East Jerusalem, the military offensive in southern Afghanistan, earthquakes in Haiti and Chile, disarmament negotiations between the US and Russia, meetings on Arctic cooperation, the forthcoming meeting of the European Council. This list of issues on the foreign policy agenda is a long one.

But overriding the individual issues, there are, at different times, various situations or events that define the “laws of nature” in foreign policy. In the last decade, the terrorist attack against the US on 11 September 2001 stands out as such an event. Challenges relating to national security have dominated foreign and security policy – in terms of both approach and actions – during this period. This will continue to be the case as we now step into a new decade.

Meanwhile, new, powerful forces of change are affecting many policy areas including foreign policy: increasingly we are witnessing rapid changes in living conditions and a fight for resources due to climate change, the effects of the global economic crisis, and the emergence of what we used to call “major developing countries” as key actors in an increasingly globalised world economy.

Mr President,

Over the last year we have seen how the financial crisis has hit the real economy. It has reached global proportions, with repercussions in every corner of the world, and is extending, step by step, into every policy area. Now, one year later, we see this continuing to unfold.

But although we see concrete signs of recovery in the world economy, it is clear that the world will not be the same again.

And the financial crisis did not come alone. In 2008, major increases in global food prices seriously affected the world’s poor. The world needs a coordinated international effort to ensure that the production of food – at affordable prices – is increased in the years ahead.

The financial crisis is not killing and maiming like the 9/11 attacks did. The effects are more long-term, more profound, they may affect more countries and more people, and pose challenges to governments far beyond the effects of perceived physical insecurity. The impact of the financial crisis brings to mind the observation of a great philosopher that major change comes stealthily. Today we see clearly that the financial crisis will be a decisive factor in foreign and security policy in this decade. This means that the context – the framework – in which foreign policy matters are dealt with will also be changing.

Mr President, this will be the focus of my address today. It will not be a catalogue of individual issues. The Storting has recently had a debate on the developments in Afghanistan and on interpellations on the High North and human rights issues. And twice a year I give separate addresses on Norway’s relations with Europe.

History has many examples, Mr President, of how economic crises can cause upheaval, war and conflict. The depression between the World Wars and its dramatic consequences are perhaps the most prominent example.

On the other hand, crises can spur necessary change and pave the way for new growth. History has also shown that the lessons learned from a crisis can inspire states to take visionary steps to prevent new crises from developing. Here I am thinking of how the Bretton Woods system was designed precisely to prevent a repetition of what happened in the thirties. And of the way the European community developed, based on the lessons learned from the First and Second World Wars.

It is not so much the crisis itself that is decisive, as the way we deal with it.

Behind the spectacular financial collapses of our time, from Wall Street to Reykjavik, there are more deep-seated imbalances of various kinds. We see financial imbalances between countries with large deficits and those with large surpluses – with the US as a prime example of the former and China of the latter – and imbalances between rich and poor countries. We see an imbalance between the amount of greenhouse gases emitted and what our planet can withstand. And we see a political imbalance between increasingly global markets – due to deregulation and new technologies – and political ability to act, which is still predominantly limited to the individual states.

International cooperation proved decisive for weathering the storms of autumn 2008. The International Monetary Fund (IMF) gained new relevance. The G20 – a forum for finance ministers and central bank governors from 19 of the world’s largest economies together with representatives of the EU – gradually came to take centre stage.

However, the first line of defence was organised by the US and other countries that were affected early on. In the days and weeks following the collapse of Lehman Brothers on 15 September 2008, they launched massive measures to protect the financial system and rescue critical financial institutions. At the G20 meeting in London in April 2009, the major actors decided to coordinate their national policies and agreed on the scale and approach of international measures. They also agreed to provide additional funding for the IMF and other international financial institutions to help member countries that had been particularly severely affected.

In parallel with the most serious financial crisis since the interwar years, we have been seeing a continuous shift in regional and global power and influence. New states are entering the arena due to factors such as population growth, production rates, technological advances or emission levels. They are intent on securing their own development, fighting poverty, addressing climate change, and ensuring that they are listened to, seen and respected. They include China, India, Indonesia, Brazil and South Africa, among others.

As these countries step into the limelight, we see increasingly clearly that established international institutions – created under strong Western influence right after the Second World War – are gradually losing both representativeness and legitimacy.

We are developing a clear picture of the mismatch between the strength of the financial and economic forces of change and the ability of the political institutions to respond to them.

Mr President,

All these threads are interwoven, forming a complex backdrop to the efforts to reform the international system. It is difficult at the best of times for so many actors with such different departure points – political, economic, cultural and religious – to reach agreement. And it is particularly difficult when a large number of governments are at the same time being held accountable at home for the way they are handling the financial crisis and its impact on individuals, families and local communities as jobs and welfare services come under pressure.

For even in this global era, all policies have local effects.

At the start of the crisis, we were afraid that banks could collapse. Now we fear that countries could suffer the same fate.

The political framework for many governments has changed significantly in a very short space of time. Their room for manoeuvre has in some cases been dramatically reduced due to growing deficits, heavy debt burdens, as well as loss of income from tourism and migrant remittances. In many countries, including ones with which Norway has close ties, major gaps can develop between demands, expectations and accustomed standard of living on the one hand, and the state’s ability to deliver on the other. And this can happen fast. National and international political structures that we have perceived as robust and reliable could suddenly prove fragile.

Again, there are lessons to be learned from the thirties. The Great Depression paved the way for authoritarian forms of government, and the creation of scapegoats. It is a paradox that at a time when the world really needs stronger regional and international organisations, individual countries are being forced to look inwards as they grapple with their national crises, and may be unable or even unwilling to build up the international governance structures that are needed. The capacity and will to take on obligations that extend beyond national responsibilities may be significantly reduced.

Norway too is affected by the financial crisis. Our exports have fallen in step with the drop in demand in key markets. The Government is giving priority to keeping the Norwegian economy in order. We are pursuing an active policy to safeguard welfare services and jobs, and to modernise our society. The OECD’s recent evaluation of Norway’s response to the crisis indicates that our measures have been on target and have generally achieved the desired results. The important task for Norway is to maintain this situation, and not least prevent unemployment from rising.

One of the main tracks of our foreign policy should, as before, be to promote an international legal order, with strong, adaptable international organisations that can respond to the imbalances I have referred to and help us to resolve them. The main conclusions of the white paper on Norwegian foreign policy (Report No.15 (2008–2009) to the Storting) – and the Storting’s debate on this – remain valid, namely that Norway should and will take responsibility at international level, and that the strongest possible international legal order is in Norway’s best interests.

Mr President,

I would now like to discuss some different areas that illustrate how the financial crisis has affected both international politics and Norwegian foreign policy.

Firstly, international cooperation.

One of the most important reasons why we have so far managed to prevent the financial crisis from developing into a depression like the one in the thirties is that we have responded with close multilateral cooperation. A range of institutions were already in place, and states were willing to make use of them. Coordinated rescue packages on an unprecedented scale were a key factor in preventing a total collapse of the world economy.

With the help of the World Trade Organization (WTO) multilateral trading system, we have so far also managed to avoid a shift towards greater protectionism. Our global set of rules helped to prevent short-term protectionist actions despite pressure to take such action in many countries. According to the WTO, the world economy is just as open today as it was before the crisis, but we note warnings that individual countries may feel forced to protect themselves against other countries’ rescue packages by increasing trade barriers, particularly of a surreptitious and indirect nature.

It is vital for Norwegian interests to prevent this from happening. Global free trade is crucial for Norwegian interests. The Government will therefore continue to work in all relevant forums to counter increased protectionism.

The question is whether the global spirit of cooperation from 2008/2009 can be maintained now that the most acute phase of the financial crisis has passed. For recovery is uneven. There is disagreement about when the rescue packages should be phased out and austerity measures phased in. Tensions between surplus and deficit countries are becoming more visible. Some countries have not felt the full brunt of the crisis – in social and political terms – before now, with the effects of record-high deficits and record-high debt hitting home at the same time. The deficits have to be reduced and the loans serviced. Altogether this can have major implications for domestic policy. And in the world today, it can have implications for foreign policy, as countries and groups of countries find their room for manoeuvre is diminishing.

According to the IMF, China’s and other Asian countries’ currencies are undervalued. This is helping to keep the prices of their export goods artificially low, and is again affecting export industries in both developed and developing countries.

There is still a lack of progress in the WTO Doha Development Round. There is uncertainty as to whether the US is ready to conclude the negotiations, and a great deal depends on the US and China reaching agreement. It will soon be 10 years since these negotiations started. A good deal has been achieved, but nothing can be counted on until all the issues have been settled.

And until the Doha Round is concluded, it will also be difficult to make progress on other world trade agendas, for example on key issues such as agreements that focus on the environment and the promotion of trade in environmentally friendly goods and services, including climate technologies, as well as workers’ rights and the right to decent work. These agendas are on hold until the Doha Round is concluded.

Norway will do what it can to ensure that these issues are given priority and to facilitate a rapid completion of the Doha round, at the same time as we will maintain our positions in the negotiations.

Secondly, Mr President,

In parallel with and related to the effects of the financial crisis, multilateral cooperation is undergoing change.

The importance of the G20 reflects the shift in global power towards Asia, and China in particular. We are witnessing a significant change in the balance of power in international politics. The shift in power started before the financial crisis erupted, but it has since accelerated and intensified. We are seeing new alliances forming – led by China, India, Brazil, Indonesia, South Africa and others – and new forms of collaboration developing in a range of areas including climate change, development, health and human rights.

The facts, Mr President, are clear: we cannot expect to find international solutions to key issues unless the emerging economies have a place at the table. We saw this at the climate change negotiations in Copenhagen, and we saw it in the run-up to the negotiations in Bali and at the WTO Ministerial Conference in the summer of 2008.

It is in all respects positive that the emerging economies are being included, are being given and are taking responsibility. But we see that this will make it more difficult to reach international agreement. And important questions are being raised about the formal status of a forum like the G20, and the relationship between the G20, the large majority of countries that are not members, and other – formal – institutions, particularly within the UN system.

It is generally positive, including for Norway, that the G20 took action in response to the crisis. But the G20 is a self-appointed group. It has not been elected or appointed; it does not have statutes or rules. The challenges of the financial crisis have dominated the agenda since the G20 countries first met at head of state and government level in November 2008. But we see signs that the G20 forum will provide the informal basis for formal decisions on a wide range of other issues – from climate change to trade, and who knows what other foreign-policy-related areas.

This raises political questions and questions of principle about the legitimacy of such decisions. More than 160 of the world’s countries, including Norway and the other Nordic countries, do not take part. Together with the other Nordic countries, Norway is therefore advocating that the G20 be made more representative, for example through a constituency system, which would not need to increase the number of members. A Nordic voice should have a place in the G20, given the level of Nordic engagement, our role in international cooperation, our combined weight in the world economy and our financial contributions to international financial institutions.

Mr President,

It is the emerging economies – particularly China – that have experienced the fastest recovery, and they are now the growth engine in the world economy. China’s importance in most connections is growing faster than most people could have expected. It is now reported that China’s exports have increased by more than 40% over the last year, and it has overtaken Germany as the world’s largest exporter. China is expected to surpass Japan as the second largest economy in the world, and it may outstrip the US as the world’s largest economy in just 15 years. China has the highest CO2 emissions, not per inhabitant, but as a country. At the same time it is the world’s largest producer of energy from renewable sources.

Today, there is hardly any area where China is not already the largest or next largest player. And it is entering the playing field with far more confidence than was the case just a few years ago. This is of importance for virtually every aspect of international relations.

The growth that China has experienced over the last 30 years has benefited the country’s huge population and deserves recognition. It has reduced degrading poverty and stimulated a significant part of the growth in the world economy.

Today, China’s growth is based more on domestic demand and less on export than before. This makes it easier for it to choose its economic policy strategies without too much consideration of the rest of the world. Previously, it was only the US economy that was strong enough to take such an independent line. But China too is vulnerable, and the Chinese authorities themselves are concerned about its present basis for growth.

Until recently, China preferred to play a less prominent role in international politics. This is now changing, partly due to China’s desire to assert itself, Mr President, and partly due to the natural laws of politics and economics, as vying for positions of power will have consequences, including for international politics. China is stepping into the limelight. China must take responsibility. China must show its hand.

The relationship between the US and China, or the G2 as some call it, will be of great significance. To a certain extent, China’s ascent has been at the cost of the US. But this relationship is a complex one characterised by mutual dependence, and thus mutual vulnerability.

In Africa we see an ambitious China, with its energy agreements and engagements in major infrastructure and food production projects. This is a vivid illustration of a new way of building foreign and development policy alliances. China’s approach to cooperation is different from that of traditional development partners, for example in that it focuses far less on the recipient country’s “internal affairs”, such as human rights.

China is also asserting itself more actively in its neighbouring areas. Energy security and supply lines are issues of growing importance in this region too. Although China is the world’s fifth largest oil producer, its oil consumption has exceeded domestic production since 1993, and it now imports half of the oil it consumes.

For Norway, Mr President, this means that we meet Chinese interests in connection with agendas of mutual concern, such as maritime security and new transport routes. We note China’s rapidly growing engagement in Arctic issues. We have centres of expertise that could cooperate with their Chinese counterparts on developing opportunities in the region. And China is showing an interest in our social model, not least our welfare systems. There is potential for cooperation here. Norway could also be the first European country to enter into a trade agreement with China, and the Government is giving high priority to the completion of this work.

In the light of China’s growing importance in almost all areas, the Government launched a China strategy in 2007. China is increasingly targeting activities towards the Norwegian market, and Norway also has a visible presence in China. The Government has decided that Norway will take part in EXPO 2010 in Shanghai, and this will provide good opportunities for public diplomacy within a wide range of sectors.

In Norway’s relations with India too there has been an increase in contact and activities, with strong growth in trade since 2005. The most important feature of Norway’s engagement is its breadth. It began with business ties, but now we are seeing cooperation involving research institutions, arts communities and a wide range of civil society organisations. It was against this backdrop that the Government launched its India strategy last autumn, and we are now following this up. I recently visited India myself, to take part in a security policy seminar, among other things.

The Government gives priority to increasing our knowledge of the Asian major powers and the shift in global power that has gained momentum with the financial crisis. We are therefore strengthening our diplomatic and consular missions in the region.

At the same time, we will maintain focus on universal principles such as human rights, including freedom of expression. The fact that countries that place less emphasis on these principles are gaining influence must be met with a two-fold response: we should, and we will, continue to develop our relations with these countries, but at the same time we should, and we will, ensure that we do not compromise on universal principles or break international rules. This is also in focus in our work as a member of the UN Human Rights Council. The Storting has been duly informed and has discussed this matter.

Mr President, I would now like to move on to the third area, developments in Europe.

The departure point for Norway is clear: developments in Europe – both political and economic – go right to the heart of our national interests. Europe is our most important export market. A fall in demand hits Norwegian companies and jobs directly. When political and economic difficulties strike European countries, it is our allies, our Nordic neighbours and close partners, we are talking about. And if Europe’s voice – in the form of the EU or in other ways – is weakened, our voice too is weakened in most contexts.

Debt crises are testing the European Union (EU) and not least the Euro cooperation. The financial crisis and the steps taken in response have created even larger budget deficits and additional problems for many of the European countries that already had major budget deficits from before. Excessive debt procedures have now been initiated against two thirds of the EU member states. This means that their budget deficit and/or debt is higher than the criteria set out in the Maastricht Treaty.

In 2009, the EU experienced a drop in gross domestic product (GDP) of around 4%. The Baltic states have been hardest hit, but other countries that are far more important for the international economy – such as Germany, the UK and Italy – have experienced a stronger downturn than the EU average.

The financial crisis has been the first major test for the EU and its common currency. Sharing a common currency while maintaining national sovereignty in terms of fiscal policy means that it is vital to ensure close coordination of economic policy. This is precisely what the criteria for participation in the economic and monetary union were designed to achieve.

The countries in the Eurozone have enjoyed a stable currency and a relatively low interest rate, which has facilitated a high level of investment and consumption in many of them. At the same time, the deficit countries have become less competitive and their debt obligations have increased.

In comparison, Mr President, if a US state gets into difficulties, it will still receive federal funding for health and social security. The EU does not have a similar overarching public sector, and this makes the burdens particularly severe for some countries, particularly those whose currency rate is fixed.

Member states that have not complied with the debt criteria over time are now being monitored closely by the European Commission, the European Central Bank and the other member states. Greece is one of these, and has presented measures to stabilise its economic situation. These measures have led to massive protests, illustrating just how easily a financial crisis can lead to social and, potentially, political unrest. Spain, Portugal, Italy and Ireland are also facing serious political challenges as a result of high or increasing public debt.

It is to be expected that dealing with the financial crisis will occupy much of the EU’s attention in the time ahead. Measures are being developed in Brussels and the EU capitals to stabilise the situation in the short term and facilitate growth in the longer term. The EU will strengthen cooperation on supervision of the finance sector, including the establishment of a body to monitor the stability of the financial system as a whole. Norway may also participate in the new arrangements through the EEA Agreement.

In parallel with the efforts to address the financial crisis, the EU countries are also further developing the Common Foreign and Security Policy and establishing a common foreign service, in accordance with the Treaty of Lisbon. The early stages of this work have not been easy. We have seen clear signs of conflict between an interest in close coordination and a strong European voice on the one hand, and the desire – particularly among the larger EU member states – to pursue an independent foreign policy and take independent action on the other.

All in all, this has created an ambiguous EU profile and reduced the EU’s clout. We saw this in the run-up to the climate negotiations in Copenhagen, and we are seeing it in other areas, such as the EU’s relations with the US, China and Russia.

Mr President,

Some analysts believe that we must be prepared for a new economic reality where developed countries – particularly in Europe – see lower rates of growth and higher unemployment for many years to come. The combined effect of major budget deficits and the need to service large national debts is putting severe pressure on public finances, and above a certain level, this will also slow the rate of growth and make necessary change more difficult. Many countries will have to make cuts, and belts will have to be tightened. But at the same time, there are fears that the “cure” could in turn impede new growth.

At the same time, we should not forget that Europe today has a well-developed network for political cooperation in contrast to the situation in the 1930s, for example. This gives reason to hope that the European countries will join forces rather than turning against each other. And we have seen before that in times of crisis such as this, the EU countries can take important steps forward together, as for example in the 1980s, when the plans for the internal market were developed.

This Europe united by cooperation, which Norway is part of, needs to demonstrate its ability to show solidarity and reduce disparities. We should view our contribution through the EEA and Norway Grants in this light. We will be providing significant funding – more than NOK 15 billion over a new five-year period (i.e. NOK 3 billion a year) – for the new EU member states, under a renewed agreement that was finalised at the very end of 2009.

Projects funded by these grants cover areas ranging from climate change to green growth, culture and private sector development. For example, I could mention here that Norway is now the largest international provider of support for civil society in the new EU member states. The Government makes active use of the opportunities the grant scheme represents for developing our relations with these countries, who are also our new allies in NATO.

And, Mr President, I think it is important to note that in the rough economic landscape today, where many of our closest European partners are undergoing painful changes, the contrasts with Norway can seem extreme. We have kept our economy under control, and unemployment is low. With our large petroleum resources and trade surplus, we are in a unique position compared with the rest of the world.

This gives us a responsibility. During the first phase of the financial crisis, we helped to alleviate the situation in vulnerable neighbouring countries, for example by providing bilateral loans to Latvia and Iceland. We have allocated additional funding to the international financial institutions, and we have maintained the level of our aid funding at more than 1% of gross national income (GNI).

As a surplus country, we must be prepared for increased pressure being put on us, both in the form of requests for support from countries badly affected by the crisis, and in the form of a spotlight on the way we manage our surplus through the Government Pension Fund – Global. This highlights the importance of being a long-term and recognisable player in the international arena, so that our approach to managing our financial resources is not seen as a political tool, but is rather as an element of Norway’s global footprint.

Mr President,

There is a general willingness to help Iceland in its difficult situation, and the Government shares this engagement. Norway and the other Nordic countries are the main lenders to Iceland under the stabilisation programme drawn up by the IMF together with the Icelandic authorities. The first part of the loan package has been disbursed. Following the referendum in Iceland on 6 March on providing a state guarantee for loans from the UK and the Netherlands under the Icesave Loan Agreements, the three countries are preparing for new negotiations. It is vital that they reach agreement. The Icelandic Government has emphasised throughout that it will fulfil its international obligations and follow up its commitments under the stabilisation programme together with the IMF. Norway’s view is that – at this point – this provides a basis for continuing the IMF programme. We will continue to advocate this view vis-à-vis the other countries in our IMF constituency.

Fourthly, Mr President, developments in the US.

2009 was the worst year for the US economy in more than 60 years, with a historically large drop in GDP in a US context, an increase in unemployment, a record budget deficit and high public debt. To illustrate the depth of the crisis, it has been pointed out that the US and the UK have run up a debt equivalent to that accumulated during the Second World War.

The financial crisis and the recession, which started at the end of President Bush’s term, have put massive political pressure on President Obama and his administration. The President faces formidable tasks at home: ensuring continued economic growth, improving the situation on the labour market and reducing the vast budget deficit. In addition he has undertaken to secure health insurance for all and limit the increase in US healthcare costs.

In almost no other country have the links between the impact of the economic crisis on domestic policy and the capacity to pursue an effective foreign policy been more evident. The Obama administration’s efforts to get the healthcare reform passed have been a drain on the President’s political capital, and deliberation on a large number of other matters by Congress has also been delayed.

This, Mr President, is affecting the chances of moving forward on other agendas, for example new climate change legislation, a new WTO agreement and new, important disarmament agreements. The congressional election this autumn is bringing controversial domestic issues even more to the fore.

This could jeopardise political goals that require change and a long-term perspective, for example in the energy sector. International matters that require effort, time and attention in Congress may also be at stake, as they are likely to be weighed against the immediate problems and the economic downturn. Examples include international agreements that need to be ratified by the Senate, such as the Convention on the Law of the Sea, the Comprehensive Nuclear-Test-Ban Treaty and the new Strategic Arms Reduction Treaty (START).

We further observe how the US has been weighed down by its two major military engagements of the past decade, in Afghanistan and Iraq. They have come at a high price, in terms of human lives, money and political capital, compared with all other engagements the US, the global superpower, is involved in.

We should note how this burden is affecting the US position on the international scene. This is a global effect, but we should also keep a close eye on the significance it could have for our strong and firmly established transatlantic relations. These relations are still of great importance to Norwegian security. And this underscores the importance of engaging the US in our High North efforts, and of further developing our relations with the US as regards Arctic cooperation and all the other areas where we play a supplementary and complementary role to the US.

Norway is cooperating closely with the US to move the peace process in the Middle East forward. Here too we are seeing a regional conflict continuing to develop without the traditional centres of power having sufficient clout or opportunity to bring about an alternative outcome. We have seen this demonstrated recently with the conflict over new Israeli settlements in East Jerusalem.

Norway deeply deplores these plans. They are a violation of international law. They are jeopardising the peace process. And, if implemented, they will physically cut off East Jerusalem from a future Palestinian state, thereby making a realistic two-state solution impossible.

At a time when crises are throwing shadows over the landscape – whether financial, environmental or due to food prices – we need engagement in the Middle East on the part of the EU, the US, the UN and other actors, and Norway will continue to contribute to this end. Norway’s engagement and voice in the Middle East is clear and it should be relevant. A new meeting of the Ad Hoc Liaison Committee (AHLC) for assistance to the Palestinians, which is chaired by Norway, is planned in Madrid next month. In fact, the AHLC is now the only broad-based forum where the Israeli and Palestinian parties are part of formal meetings. And it is maintained from several quarters that the AHLC – and the progress it is making – remains one of the very few areas where there are positive developments.

Mr President,

As I have mentioned, the US has been put under increasing strain. Although its dominance is waning, we should nevertheless assume that the US will continue to be the strongest single nation for a long time ahead. In military terms, the US will continue to be the only superpower capable of operating on a global scale. The US regularly demonstrates its ability to achieve technological breakthroughs and revitalise its economy. And US engagement is essential for progress on most international issues: climate change, disarmament, Afghanistan, the Middle East, relations with Russia, NATO cooperation, and strengthening the role of the UN – just to mention a few.

My point is that we must be prepared for the fact that the US is likely to become more inward-looking and to direct more attention to Asia, and thus less to Europe. There may also be a risk of other major powers focusing more on domestic economic problems than on global and regional challenges – for the same reasons, or as a reaction to developments in the US.

This touches on my fifth point, which is about developments in Russia.

Russia was hit hard by the financial crisis and appears vulnerable at present. In 2009, Russia experienced an 8% drop in GDP, compared with growth rates of above 6% during the previous ten years. Direct foreign investments have been sharply reduced. The steep economic decline levelled off after the summer of 2009, but it is widely acknowledged – as President Medvedev has also stated – that the Russian economy needs to be reformed and radically modernised if it is to avoid stagnation in the long run.

We should particularly note that this will require closer integration of the Russian economy into the Western economy. The country is highly dependent on energy and raw materials, and its economy is poorly diversified. Few countries have felt the economic impact of declining energy prices – of oil and particularly of gas – as directly as Russia.

All of this makes Russia a huge unknown in any analysis of the impact of the financial crisis on international politics.

According to the survey Doing Business 2010, Russia ranks as number 120 of 183 countries. At present, 130 Norwegian companies are established in Russia, 40 of them in Murmansk. Framework conditions will have to improve for even more companies to be attracted to Russia and feel sufficiently confident to set up operations there.

However, the Russian market offers great opportunities, as Norwegian enterprises have experienced, and cooperation on innovation, research and technology development is a high priority for Norway. At the same time, investing in Russia is still fraught with considerable risk, including political risk. It is Russia’s responsibility to improve the situation, as the Russian President has pointed out. The Russian Government has set the goal of integrating the country more closely into international economic cooperation, for example through membership of the OECD and the WTO.

At the bilateral level, we can assert that our relations with Russia are generally good. The main features of Norway’s policy vis-à-vis Russia have been, and continue to be, stability and a long-term approach. Today we enjoy the results of nearly 20 years of targeted efforts on the part of Norway to build confidence, cooperate on projects and develop our interface with the country after the collapse of the Soviet Union – particularly in the north, where the environment and nuclear safety are key issues.

At the same time, we are aware of a number of worrying trends in today’s Russia, for example as regards human rights, freedom of expression and a free civil society. These are issues we raise on a regular basis in our talks with Russian leaders.

In other words, we have a broad and important agenda for the Russian President’s state visit to Norway this spring.

My sixth point, Mr President, concerns the future of investments and securing global public goods.

Relevant areas in this context are the eradication of extreme poverty and hunger, measures to improve global health, efforts to improve education, food security and broad-based efforts to fight climate change. We must acknowledge that as more attention shifts to domestic issues and painful spending cuts, there may be less funding for addressing global development challenges.

The financial crisis has led to a decline in industrial production, and thus to a decrease in several individual countries’ greenhouse gas emissions. However, the effects on the real economy and the political effects could mean that global challenges related to climate change are pushed further down on the agenda, both by politicians and by the general public, and that the technological progress needed in order to achieve cleaner transport, energy and industrial production slows down.

We should be cautious about drawing firm conclusions about how the two crises – the financial crisis and climate change – are affecting each other. But once this acute phase of the financial crisis is behind us, we must give priority to achieving growth that is truly sustainable.

Norway will give full attention to this area, precisely because the impacts of climate change may be a lot more dramatic than those of the financial crisis. They may, among other things, raise serious problems regarding control over natural resources, energy policy, distribution and migration.

In the lead-up to the UN Climate Change Conference in Mexico in November–December, Norway is working on the negotiations on measures to reduce deforestation and forest degradation in developing countries and the establishment of an associated funding mechanism, among other matters. Prime Minister Stoltenberg is taking part in a high-level advisory group appointed by the UN Secretary-General and co-chaired by Gordon Brown and Meles Zenawi. The advisory group will follow up the financing pledges made in the Copenhagen Accord, with particular focus on long-term financing. The Prime Minister will also host a high-level conference on deforestation at the end of May this year. It is envisaged that the conference will culminate in a global partnership that can establish a mechanism to mobilise financial resources for the conservation of the world’s tropical forests. In the lead-up to the conference, Norway will also work on adaptation to climate change, and on mechanisms and incentives for carbon capture and storage (CCS) through active lobbying at political level vis-à-vis other countries.

In the short term, Mr President, spending cuts in response to the financial crisis could lead some countries to reduce funding for climate measures and to cut defence and aid budgets. We are now seeing signs that international organisations are experiencing fiercer competition for resources. According to current OECD calculations, donor countries will disburse USD 107 billion in development aid in 2010, compared with the pledges of nearly USD 130 billion made in 2005 as part of what are known as the Gleneagles commitments, i.e. at the G8 meeting. Here Norway is unique – unfortunately, one might add – in having reached the goal of allocating 1% of GNI to aid.

This may have severe consequences for the world’s poor countries, where the lack of a social safety net, combined with increasing food prices, means that people who lose their jobs will have to struggle to survive.

Although a number of other factors, such as trade and investments, are more important than aid for creating growth and development, we must not underestimate the importance of aid for humanitarian relief and the international effort to eradicate poverty. In addition, a reduced commitment among rich countries to the fight against poverty could increase global tension between rich and poor countries.

The global financial crisis has widened the gap between rich and poor. Just in the last year, the number of people suffering from hunger and malnutrition has increased by 100 million, and in 2010 about 64 million more people will fall under the threshold of extreme poverty compared with a year ago. This will impede the efforts to achieve the Millennium Development Goals (MDGs), and in particular the targets on poverty and hunger. The UN High-level Meeting on the MDGs in New York in September will provide an important opportunity to take stock and, if necessary, adjust the course. Norway is particularly concerned to promote a renewed effort on child and maternal health at this meeting, and has started preparations.

Women are likely to be harder hit by the financial crisis than men, although men are also affected directly by growing unemployment. Women make up the lion’s share of employees in textile manufacturing, other export industries and tourism – sectors that are under severe strain.

There is also reason to fear that the financial crisis is putting further pressure on labour rights and the fight for decent work. Norway will do its utmost to keep this issue on the agenda, for example in the ILO and the WTO.

Illicit capital flows, frequently channelled through tax havens, are a significant obstacle to economic and social progress in many developing countries. This has become even more apparent during the financial crisis. Increasing attention is being paid to the problem of tax evasion in countries such as the US, the UK and Germany, and also in the EU, the G20 and the OECD. There is greater willingness in the international community to discuss the detrimental effects of tax evasion and illicit capital flight. We will take advantage of this, and will give priority to this issue in our foreign and development policy.

Mr President,

In the last part of my address, I would like to highlight some specific areas that will play a central role in the time ahead – areas that are not directly affected by the financial crisis, but are indirectly affected due to the general climate created by the crisis.

I will begin with NATO.

NATO is developing a new strategic concept that will shape the policies of the Alliance for many years to come. Since the adoption of the last strategic concept in 1999, NATO’s membership has grown from 16 to 28 members. New issues are in focus. Terrorism is high on the international security policy agenda. NATO has become engaged in Afghanistan, far beyond the North Atlantic area.

One of the key tasks is to identify the main security challenges for NATO in the next decade, and how these should be addressed. In addition to a new strategic concept, proposals for major changes in NATO’s command structure and general organisation will also be developed.

In this work, Mr President, the Government is giving priority to four main issues.

Firstly, NATO’s partnerships. NATO has used these to promote stability and development in Europe. Following the enlargement of the Alliance, there is a need to adapt these partnerships to increase their benefit both to NATO and to its partners. The very fact that NATO’s partner countries are different and are pursuing different interests in their cooperation with the Alliance makes this particularly important.

Secondly, Russia, NATO’s most important partner country. Cooperation in the NATO–Russia Council has had its ups and downs. Norway stresses the importance of building confidence between NATO and Russia. We aim to secure agreement on ambitious goals for practical cooperation and political dialogue with Russia. There will be areas where we disagree. But they should not be allowed to hamper cooperation where this would be to our common benefit.

Thirdly, focus on NATO’s cooperation with other international organisations, particularly the UN and the EU. Afghanistan has shown how important this is. The Government is working to ensure closer cooperation between NATO and other organisations both in the field and at headquarters level.

And fourthly, focus on NATO’s core task. In the Government’s view NATO should maintain focus on its core task, namely collective defence.

Our initiative to encourage NATO to focus more on collective defence and Alliance territory does not seek to divert attention from NATO’s operation in Afghanistan. Norway stands wholeheartedly behind this effort. One of the key reasons for concentrating attention on the Alliance’s territory and its periphery is to strengthen its position as a legitimate and credible security guarantor, both within and outside the organisation. This fundament is a premise for NATO’s operations outside its territory.

The success of the operation in Afghanistan, Mr President, cannot be the only yardstick for determining the function and future of NATO. By participating in ISAF, NATO is doing an important job in Afghanistan. But this effort is just one part of the comprehensive approach that is needed. We cannot assess the importance of NATO for Norway on the basis of overall progress in Afghanistan alone.

The Government regards continued NATO membership as a mainstay of Norway’s security policy. In the light of the debate this winter, I would like to add the following: our focus on NATO’s territory and its periphery – the High North in our case – does not imply that we consider our neighbouring areas to be more vulnerable or threatened than before. Rather we wish to underline that NATO’s core task remains unchanged, i.e. that collective defence forms the basis of the Alliance, that our allies should we aware of the changes that are taking place in our area, just as we should be aware of the current situation in their areas, and that all in all, this is about the indivisibility of security.

Mr President,

The international disarmament agenda has reached an important phase. This is an area the Government gives high priority to. It touches on security, development, the international legal order, international humanitarian law and human rights. These efforts involve inclusive negotiation processes and partnerships between governments, civil society actors, affected parties and various new constellations.

These are important times. And they are times of hope. There are several reasons for this.

The US and Russia are on the verge of concluding a new Strategic Arms Reduction Treaty (START). If it is concluded, it will be the first important agreement on nuclear disarmament in two decades. The 2010 Review Conference of the Parties to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) will be held at UN Headquarters in New York in May. NATO’s new strategic concept is currently being discussed by its members. And, Mr President, the Convention on Cluster Munitions will enter into force on 1 August this year, now that it has been ratified by the required total of 30 states, which was achieved when Burkina Faso and Moldova deposited their ratification instruments with the UN on 16 February.

These are all positive signs in a political minefield.

However, we know that we are facing difficult tasks. We cannot count on Norway’s positions gaining majority support, not at the Review Conference, nor in NATO, nor in specific negotiations. Iran’s and North Korea’s nuclear programmes also pose immediate challenges to the international community. If anything, they have become more serious during the past year. The International Atomic Energy Agency’s most recent report on Iran gives continued cause for concern. Iran has a responsibility to demonstrate that the IAEA’s and the international community’s concern is unfounded. If not, further Security Council sanctions will be inevitable.

The Government has two priorities in its disarmament efforts.

Firstly, we must make sure we make full use of existing opportunities to make real progress on the various disarmament issues. Secondly, we must help to adapt the international architecture for cooperation on disarmament to the challenges of today.

This means that negotiations behind closed doors involving just a few participants can no longer be the rule. Disarmament is a global issue. The negotiation processes must involve all relevant stakeholders, including new state actors, civil society and victims.

It is clear that more and more new actors are interested in acquiring nuclear weapons. At the same time, the general security policy picture is considerably less clear cut than it was during the Cold War. The fear that nuclear weapons could be used – not just as a deterrent, but for acts of terrorism – is not unfounded. And greater proliferation means a greater risk of their being used.

The NPT has the ultimate aim of eliminating all nuclear weapons, and we have not given up on the vision of a world free of nuclear weapons, as President Obama made clear in his Prague speech last year. This ambition builds on the three pillars of the NPT: non-proliferation, disarmament and peaceful use of nuclear technology. Gaining acceptance for new non-proliferation measures will be difficult if the nuclear powers are not perceived as genuinely willing to disarm. It is therefore critical that the two leading nuclear weapon states, the US and Russia, successfully conclude the ongoing negotiations. But at the same time, we will not be able to achieve real and lasting disarmament without a robust non-proliferation regime. And as the use of nuclear power is increasing, this is becoming even more urgent.

At the same time, within NATO, we should seek to promote what I might call an updated view of the role of nuclear weapons. Although NATO is not a disarmament organisation, it is now – 20 years after the fall of the Berlin Wall – appropriate to discuss the Alliance’s deterrence doctrine. An open discussion of how we can best ensure our security can only strengthen NATO’s credibility as a defence alliance. Together with Belgium, Luxembourg, the Netherlands and Germany, Norway has proposed that nuclear weapons should be discussed at the meeting of NATO foreign ministers in Tallinn a month from now.

Mr President,

Norway has been a strong advocate in the international arena for disarmament as regards conventional weapons that cause unacceptable humanitarian harm. Several Members of the Storting have played an important role here.

Through the work it has put into the Mine Ban Convention and the Convention on Cluster Munitions, Norway has helped to set new standards of international humanitarian law. The focus of these conventions is that it is the effect weapons have on the ground that must determine whether they should be allowed or banned. The conventions are of great importance to many people’s lives. They have also bolstered support and respect for international instruments of this kind, and have helped to strengthen the international legal order.

Now our focus is on implementation. The Government is providing additional funding for unexploded ordnance clearance and assistance for victims through humanitarian organisations and the UN system. This year we also hold the presidency of the Mine Ban Convention. Norway is providing support for Laos, the world’s most severely affected country, which will host the first meeting of the States Parties to the Convention on Cluster Munitions in November.

Every day, 2000 people die as a result of armed violence, frequently involving small arms. Millions are left orphaned, homeless or deprived of their future. This is unacceptable from a humanitarian point of view, it is a major obstacle to development, and it is a violation of basic human rights.

Norway and other countries, together with various organisations and civil society actors, are putting this problem on the international agenda. We will put pressure on the international community and individual states to take responsibility for preventing and reducing armed violence by implementing measures and taking on commitments. Together with UNDP Administrator Helen Clark, Norway is arranging an international conference in Oslo in April to establish a framework with a view to securing specific commitments to these efforts.

The aim of preventing and reducing armed violence is also the motivation for the Government’s work to promote an international arms trade treaty. Our goal is an agreement that imposes severe restrictions on such trade. States must make a commitment to ensure that weapons are not used to violate human rights and international humanitarian law. And victims’ right to assistance must be recognised.

We are also, Mr President, considering whether end-user certificates should be required in connection with all arms sales. The Government is exploring the possibility of NATO introducing this as a standard requirement.

Mr President,

I mentioned our neighbouring areas. Finally, I would like to say a few words about what has been the main strategic priority area of the Government’s foreign policy from the start, namely the High North.

We are seeing that the High North is setting a new agenda. Developments in the north – both challenges and opportunities – are attracting the attention not only of our neighbouring states, but also of states further afield, even in Asia. With our focus on maintaining a presence, developing knowledge and engaging in various activities, Norway will continue to play a leading role in cooperation and initiatives in the north. This applies to the area we refer to as the High North – the north of Norway and the northernmost part of Europe – and it applies to the whole Arctic region which is now opening up as a result of climate change and growing interest in its resources and transport routes.

In the light of the main theme of this address – the importance of international cooperation – I would like to discuss certain developments in terms of international law and some aspects of the political development in the north. Here we note several positive trends.

Firstly, there is growing recognition of the fact that the Arctic is not an uninhabited legal vacuum. The land areas surrounding to the Arctic Ocean are integral parts of states, whose rights and obligations cover sea areas and their continental shelves, as is the case for coastal states bordering other sea areas.

The UN Convention on the Law of the Sea provides a solid basis for policy development, and there is no need for a separate treaty. This view is gaining ground. In addition, there are a number of environmental agreements that should be implemented and complied with. The US is the only Arctic coastal state that has not ratified the Convention on the Law of the Sea. Nevertheless it complies with the provisions of the convention when it comes to practical policy, and there are also strong interests that are pushing for US ratification during President Obama’s term in the White House.

The five Arctic coastal states – Canada, Greenland/Denmark, Norway, Russia and the US – will meet in Ottawa next week to continue their talks on issues related to their responsibility in the north. These discussions help to encourage openness on these issues and facilitate international cooperation in this region.

The Convention on the Law of the Sea has clear provisions on issues of jurisdiction, including on the extent of the continental shelf. Last year Norway was the first Arctic coastal state to receive the recommendations of the Commission on the Limits of the Continental Shelf, which determine that our continental shelf stretches to a point far north of Svalbard. This is an important clarification. The bodies of the Storting have been kept informed on this matter.

Secondly, the Arctic Council is the key Arctic cooperation forum. Norway would like to see the Arctic Council strengthen its role as a policy development body for Arctic issues. Following consultation with Denmark and Sweden, the Norwegian Arctic Council chairmanship established a secretariat in Tromsø. This is now serving the Danish chairmanship and will thereafter serve the Swedish chairmanship. Our aim is to establish a permanent secretariat, which would significantly strengthen the organisation, particularly its capacity for disseminating information.

However, so far agreement has not been reached on whether to admit new permanent observers to the Arctic Council. Countries such China and Japan, as well as the European Commission, have signalled their interest. There should be a clear difference between member states and observers, but Norway’s position is that actors such as these could help to strengthen the Arctic Council. Norway also maintains regular contact with China on environmental and climate-related challenges in Arctic, and both China and India have set up research stations in Ny-Ålesund in Svalbard.

I would also like to highlight the importance we attach to cooperation with the other Nordic countries, as is reflected in the follow-up of Thorvald Stoltenberg’s report on Nordic foreign and security policy cooperation, in which the other four countries are actively engaged.

Thirdly, with increasing international focus on the north, we are seeking to ensure that the High North continues to be a region of low tension. Increasing interest in the High North is neither negative, threatening nor necessarily a cause of conflict. We will exercise our sovereignty and authority in the north in a credible and predictable way: not as a response to a perceived military threat on the basis of our “old mindset”, but because increasing activity creates a need for a stronger Norwegian presence, for example a more extensive inspection system, strengthened search and rescue systems, and better maritime monitoring systems.

The armed forces play an important role in safeguarding Norwegian interests in the north, including interests that are primarily civilian. The Government has therefore decided to strengthen our operative capacity, for example through the acquisition of new frigates and by increasing the capacity of the Coast Guard.

Several international forums in addition to the Arctic Council – for example the Barents Cooperation and the Northern Dimension – play an important role. The International Maritime Organization (IMO) is another important forum, and I recently went to London to discuss progress towards the establishment of binding international rules for Arctic shipping. Norway has taken a leading role in this work.

Fourthly, and finally, it was our desire to see the various political perspectives in the north, including those relating to foreign policy, as part of a coherent whole that has spurred the Government to start work on a white paper on our High North policy. According to plan, it will be presented during the current parliamentary period.

So, to sum up, Mr President, the High North is a region we share with a number of other actors, allies and neighbours, and we see that none of the opportunities and challenges in the north can be met by Norway alone.

Similarly – but on quite a different scale – we see how, in area after area, the global financial crisis is having an impact on the foreign policy of individual states and on international cooperation in general. In our world, a problem in any given country can easily become a problem for all countries. “Far away” is hardly meaningful any more in our electronic age, where people, goods, viruses, capital, and words and images travel so freely.

Single issues will continue to capture attention. But we must also focus on the fundamental forces that determine the framework for foreign policy. Because when all is said and done, our security depends on the ability of the world’s states to meet challenges together.