Norway in Asia. The Norwegian economy in transition – possibilities and challenges

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Minister,
Ambassadors,
Distinguished guests,
Ladies and gentlemen,

I would like to begin by thanking the Norwegian Business Association in India for inviting me to be here today. What a pleasure it is to meet you all in Gurgaon – a hotspot for Indian business life.

I have been told that this was just a small town 25 years ago. Since then it has become a symbol of India's transformation – a roaring city of skyscrapers, and home to nearly half the Fortune 500 companies. There is also a strong presence of Norwegian companies, which reminds us of the close ties between Norway and India.

Last year, I had the privilege of taking part in India's first state visit to Norway – the visit of President Pranab Mukherjee, together with a large business delegation. This was the culmination of growing ties between our countries over a ten-year period, during which trade doubled and Norwegian investments in India increased eightfold.

With 1.2 billion people and the world's third-largest economy,[1] India's recent growth and development has been one of the most significant achievements of our times. At the global level, recovery is moderate and uneven. And in many countries, growth is weak. Millions of people are affected. India, however, is a bright spot in terms of growth.

Despite the size of the Indian economy, it is only Norway's eighth most important trading partner in Asia. The potential for growth in our bilateral relations is therefore vast.

Norway's expertise and innovative technology in sectors such as energy, maritime and ICT has much to offer countries like India. We believe our technological base could provide a 'lubricant' for India's continued economic growth, and the Norwegian Government wishes to do its part to facilitate closer cooperation.

A key factor for realising our bilateral potential is the free trade agreement between Efta and India. Negotiations have been on hold since before India's parliamentary elections last spring. One of my main messages during this visit is that Norway wish to conclude the negotiations, and sign the agreement as soon as possible. I am confident that this will be of benefit for both the Efta states and India.

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Norwegian companies in the Asian market

Today more than 500 Norwegian-controlled companies are present in the Asian region. The main sectors are fisheries, hydropower, maritime and oil. These sectors have also been the backbone of Norway's wealth creation for decades, and even centuries.

More recent, but no less important, is the presence of Norwegian ICT and telecom companies in Asia. This is an area with enormous potential for growth – not least in India.

We also hope to increase our investments in infrastructure in Asia. The need for such investments in Asia is estimated to be more than USD 8 trillion. Norway has contributed to infrastructure development for many years through the Asian Development Bank and the World Bank. In addition Norway, along with India and more than 55 other countries, has recently sent a letter of intent with a view to becoming one of the founding members of the new Chinese Infrastructure Bank, the AIIB.

We are glad to share our expertise with Asian countries. Knowledge sharing can be beneficial both for Asia's development and growth, and for the Norwegian companies concerned, especially as we are now living in what is termed the 'Asian century'.

This summit is a good opportunity to build on the experiences of Norwegian businesses in the Asian markets and examine the challenges and opportunities.

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Steps to strengthen the relations

Growth in Asia has without a doubt affected Norwegian exports. Trade, investments and the number of Norwegian companies in Asia have increased rapidly over the last ten years. But we must remember that this growth had a modest starting point.

I believe there is considerable potential not only for our trade with India, but also for our trade with Asia as a whole. The Norwegian Government is therefore taking steps to strengthen Asian–Norwegian relations and further increase trade and investments.

This very week, the Norwegian Prime Minister, Erna Solberg, is meeting representatives of several Norwegian companies in Indonesia and Vietnam to discuss opportunities for increased business cooperation.

The purpose of our trade policy is – obviously – to increase the access of Norwegian companies to foreign markets. And we also aim to attract more foreign business and investment to Norway. We do this through a variety of measures.

Our most important foreign market is the European. Norway is not a member of the EU, but we are fully integrated in the EU's internal market through the EEA-agreement. This agreement ensures the free movement of goods, services, capital and persons within the EEA-area, which includes the EU and Norway, Iceland and Lichtenstein.

But we also aim to increase our trade with countries outside Europe, and negotiate trade agreements with non-EU partners, and make a substantial effort to eliminate discrimination against the export of goods and services in general. Through Efta, we now have free trade agreements with Singapore, South Korea and Hong Kong. We are currently negotiating agreements with Indonesia, Vietnam, Malaysia, the Philippines and, as I mentioned earlier, with India.

We also signed a Joint Statement on the Asean–Norway Partnership last year. This is intended to provide a foundation for broad cooperation, including political and economic cooperation.

We will also continue to monitor our export and guarantee schemes closely. We will make sure that we provide a competitive level of government export financing, which is especially crucial for our maritime and offshore export industries as these are currently facing challenging times.

Innovation Norway is strengthening its presence in emerging markets. With nine offices spread over Asia, Innovation Norway is actively promoting Norwegian business development in this region.

Economic diplomacy is a priority for the Government, and Norwegian embassies and consulates have put business promotion, trade and investment higher up on the agenda than ever before. This is very much the case for our embassy in New Delhi and Ambassador Eivind Homme. Promoting Norway internationally as a magnet for investment and talent has also become an integral part of our Foreign Service's work.

And last but not least, we must not forget the importance of occasions such as this, where Norwegian businesses and representatives from the public sector come together to explore possibilities and challenges in new markets.

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The Norwegian economy and transition

Norway is a small and open economy. This means that our expertise and specialised products have to compete in foreign markets, and global competition is not getting any easier. This means that we can never stop improving ourselves.

The Norwegian economy needs more building blocks in its foundation. Our prosperity and future growth are dependent on Norwegian companies continuing to be successful abroad, and on our ability to promote Norway as an attractive location for investment, education and research and development.

Globally, the recent decline in oil prices has not gone unnoticed.

For Norway, where oil and offshore-related products and services are the most important exports, it has certainly been a wake-up call.

Let there be no doubt: our offshore activities and industry will continue to play a vital part in the Norwegian economy for decades to come. But at the same time, we need to face the fact that the relative contribution of oil to our economy has passed its peak. This means that we must make a transition in our economy and embrace exciting new opportunities. We need to prepare for a low emission society and Norway's economy will need to be knowledge based, with an educated labour force and leading research and innovation communities at its core.

Developments in the global economy in recent years have shown how just quickly things can change. But while the decline in oil prices will have consequences for our economy, I wish to stress that this is not a crisis.

Our offshore industry is already adapting to new times – as it has many times before. I recently read an interesting report[2] on 26 offshore-related technologies that are being applied to other areas such as medicine, finance, electrical cars, aquaculture and exploring Mars. These are great examples of the way existing technologies can find new uses and new markets.

In addition, we see that the gap in the Norwegian economy between the offshore-related and mainland industries is slowly decreasing. Economic growth in our most important trade partners, helped by a weaker Norwegian currency, is providing opportunities for other export industries.

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The governments efforts for transition

In this new economic climate we need policies that will strengthen existing – and bring forward new – competitive sectors. We have therefore emphasised in our policy platform the need to increase our competiveness – and we are clear about how to do it.

We have two main objectives:

• We have to make it easier and less expensive to do business in Norway.
• And we need to help our business sector to become more innovative.

Our four main focus areas are:

• Lowering taxes. This reduces the cost of doing business in Norway.
• Building and improving roads and railways. We need to transport people and goods quicker. [My colleague, the Minister of Fisheries, often says: 'No one is in such a rush as a dead salmon.']
• Introducing smarter regulations – and cutting red tape. Companies should be able to spend less time filling out forms, and more time producing goods and services.
• And last, but not least, investing in knowledge and innovation. This is important in the education system – as well as in our public support systems.

Increased research and innovation in key strategic areas for the Norwegian economy is a top priority for the current Government. Science diplomacy is an integral part of the Foreign Service's work, with the aim of increased international cooperation in research and development. The mobility of students and researchers between Norway and Asia is an important factor here.

India is one of Norway's 10 priority countries for bilateral R&D cooperation. According to a bibliometric survey, Norway and India produced 904 scientific articles together during the period 2003–2012. India is a very interesting country for the knowledge-intensive Norwegian industry and a highly relevant partner in many areas of research.

ICT, nanotechnology and biotechnology in the field of medical research are among the areas that will be given priority in Norway's research cooperation with India. Furthermore, the Research Council of Norway is interested in increased cooperation on innovation-driven research in the maritime, oil and gas, marine, ICT, bioeconomy, and energy and environment sectors.

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Ladies and gentlemen,

The economic centre of gravity has shifted from the North and West, to the South and East. Norwegian companies are keen to take part in new and emerging markets, particularly in Asia. Seeing all of you here today proves this point.

Let me assure you that we will do all that we can to ease access to these markets, and provide a good foundation for you to compete.

I wish you a successful summit, and look forward to see you again tomorrow.

Thank you.

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[1] Merk: India er 3. størst når BNP er justert for kjøpekraftsparitet ifølge 2014-tall fra Verdensbanken. Justerer man ikke for kjøpekraft er India 10. størst, også ifølge VB-tall.

[2] Menon for Norsk Olje og Gass