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Introduction

• Welcome. This programme is also sponsored by the Norwegian Ministry of Foreign Affairs.
• As the participants in this programme have shown us, Russian civil servants are extremely well educated, motivated and hard working. Creating new bridges to Norway.

• The Russian economy is rocketing, and living standards have improved for two-thirds of all Russians in the last decade. Largely due to the value created by young business managers, such as you.
• Macro-management by politicians simply will not work unless micro-management by managers and public officials runs like clockwork. The interplay between the public authorities and the private sector is essential to the productivity and efficiency of any economy.
• This is what the Presidential Initiative Programme is all about. And this is why Norway was the first country to train both business managers and civil servants under this programme.
• It seems we did the right thing. This model is now being applied to the programme as a whole.
• Most important, we will adapt the programme to include the main focus of our bilateral relations right now – energy.

Energy and the environment

• Energy is key. Energy and foreign policy.
• We want the energy partnership to boost community development on both sides of the border. This will require both public and private partnerships across the border. Companies to work together.
• The opening of the Barents Sea for petroleum production marks the beginning of a new era – a new era for petroleum production and a new era in energy relations between Norway and Russia.
• The Government is committed to the strategic energy partnership between Norway and Russia in the Barents Sea. The presidential programme will therefore focus on petroleum and marine resource management in the future.
• Next year, Norway will start to export liquefied natural gas (LNG) to the US from the Snøhvit field. A few years later, the huge Shtokman gas field on the Russian shelf is due to come onstream – hopefully with Norwegian companies as Gazprom’s partners.
• This means that new gas markets are opening up for Norway and Russia. New opportunities are arising for the northern parts of Norway and Russia.
• Russian welders are already working on the Snøhvit LNG plant outside Hammerfest and on the Ormen Lange development at Aukra. Hydro, Statoil and INTSOK are working with regional authorities and companies in Murmansk and Archangelsk oblasts.
• Norway has always followed the principle that petroleum production should not harm the marine environment. If the first petroleum projects in the Barents Sea fail to meet environmental standards, further development will be difficult, both commercially and politically. We know this, Russia knows this, and the market knows this.
• Environmental standards may at first sight seem to be a financial burden. But in fact, they trigger the development of ever safer and more cost-effective technologies. Norway and Russia have everything to gain by working together to set the highest possible safety and environmental standards for activities in the Barents Sea. One ecosystem.
• Norway is taking a number of steps to meet this challenge. In April we launched an integrated management plan for the Norwegian part of the Barents Sea. Aim to establish an ecosystem-based management regime the Barents Sea-Lofoten area.
• Safety at sea will be of paramount importance when huge volumes of oil are transported through Arctic waters. We will work with the International Maritime Organisation and Russia – and other countries involved – to ensure safe transport along our vulnerable coast. Safe transport one of the most challenging issues.
• But we also have to be prepared for the worst. Accidents do happen, despite precautions. The new joint vessel traffic management system will be an essential in ensuring maritime safety, so will cooperation on search and rescue operations.
• Lack of a clear boundary in the sea.

The High North. Norway and Russia

• Russia is our most important partner in the north, and the High North is the most important issue on our bilateral agenda. [Norway and Russia have lived peaceful together, for 1 000 years, not been in war against each other]. Increase in border crossings (Finnmark), from 3000 in the early 1990s to more than 100 000 people today.
• The energy issue is almost putting all other issues and dimensions aside, including the traditional security (military) issue.
• We hope to reach a common understanding with Russia that developing the High North involves much more than awarding licences to drill and drawing up legislation. It requires a shift in both civil and industrial focus from south to north.
• Changing perspectives and direction is not always easy. [I remember: When at the Naval Academy in Norway in the 1980s, during the Cold War, watching out for Soviet submarines].
• In order to help the process, the Norwegian Government is currently developing a political strategy for the High North. This involves all the ministries, the northern counties, and the business sector and research communities.
• The strategy will be a tool for coordinating and integrating the development of new energy fields, resource management and cooperation with Russia. It will provide a basis for building up strong communities, establishing ecosystem-based environmental management, and developing a world class research community.
• We have also established High North dialogues with other partners, such as the US, Canada, the Nordic countries and Germany.
• But government strategies are only tools. What are our long-term expectations of the High North?
• • We expect Norway to develop cutting-edge knowledge of the High North.
  • There are more than 30 higher education and research institutions in Northwestern Russia and North Norway. They will play an important role.
  • We expect local businesses to become key suppliers, not only to local construction of petroleum installations, but also to the petroleum industry as a whole. Again this will only be possible if Norway and Russia pool their resources.
  • We expect the High North to be become an economic engine in Northern Europe, attracting people, capital, expertise and skills. Improvements to infrastructure, better transport capacity, and community development will be needed.
  • People in Northern Norway are hard working and enthusiastic. So they are already at it, developing private-public partnerships in Hammerfest, Kirkenes and other towns. They are establishing networks that reach far into Russia, to the communities and businesses you represent. People-to-people.
  • We are not starting from scratch. In 1993 Foreign Minister Thorvald Stoltenberg renewed our foreign policy by engaging regional authorities and organisations in a new multilateral effort to rebuild the ties that were broken by the Cold War. Since then the Barents region has become an international model for cross-border cooperation.

The fisheries

• In February I met members of the Russian fishing community in Murmansk. [Don’t think they ever had met with a member of the Norwegian Government before.] Many of them felt that they were treated unfairly by the Norwegian authorities, and that being inspected also meant being suspected.
• However, we had fruitful discussions, and I felt that we reached a better understanding of the need to take action against those stealing from our common food store.
• The Barents cooperation is about reviving the lively trade the area enjoyed in the past, while exploiting the riches of the Arctic waters in a sustainable manner. The fisheries are still an essential basis for maintaining permanent settlements in the north and a cornerstone of both our economies.
• Therefore, it is most alarming that the greatest threat to the fisheries turns out to be not oil production, but the fishing industry itself. We have reason to believe that fish worth one billion kroner are caught illegally in the Barents Sea every year. Several countries seem to be involved. An international issue.
• Over the years Norway and Russia have taken great pains to develop a regulatory regime to safeguard stocks. Although this is a sensitive area of great strategic importance, Norway and Russia have always managed to agree on sound management of these resources.
• We must continue to do so. Together we must maintain a firm and predictable control regime. We must take immediate action when the rules are broken. We must also ensure that we proceed in a fair and proper manner.
• We will continue to talk directly with the fishing industry itself, we will talk to third countries that import illegal catches, and we will continue to urge the Russian authorities to take action along with us.

A few more words on trade and economy

• In 2005 bilateral trade between Norway and Russia increased by 30 per cent, and our exports to Russia rose by more than 60 per cent. Fish and seafood accounted for most of the increase.
• However, in January 2006, Russian veterinary authorities banned imports of Norwegian fresh fish. This put an immediate stop to one of our main exports.
• Food security is of international importance, and should not be taken lightly. However, there are trade rules to be respected. The situation is now being resolved, and Russian authorities are inspecting and licensing each salmon farm. We will continue to work with our Russian partners to have the ban lifted on general terms. Scientists worked well together to resolve the issue. A test of our good bilateral relationship.
• Norwegian investors continue to regard Russia as an emerging market that offers huge opportunities. Altogether more than USD 600 million has been invested in telecommunications, food production, fertilisers and media, to mention just a few fields. However: We hope that serious Russian investors will also show an interest in Norway.
• Problem of rising level of corruption in Russia. The need for predictability and accountability.
• While our trade balance is satisfactory, we would like to see greater diversity. Trade in raw materials is still dominating the picture. What will it take for us to diversify and increase investments in each others’ countries? I believe four things are necessary:
• • Predictable rules of trade. This can most easily be ensured when we are both WTO members.
  • Better understanding in Norway of the dynamics of Russia’s economy. This will increase confidence in Russian investors and traders.
  • Stable democratic development and increased welfare in Russia. This will give people more time for going about their business.
  • Industrial and scientific innovation in both countries. Our close co-operation with Russia on education and research should be committed precisely to creating the best possible conditions for internationalisation and innovation in business.

• If we manage to coordinate the extensive networks between institutions in Norway and Russia, and keep focus on projects related to the Bologna process, this will have a positive long term effect on both economies.
• Which brings me to:

Culture and people-to-people relations

• Bilateral relations are based on mutual trust and economic co-operation.
• During the Cold War, Norwegians and Russians developed people-to-people relations, including in the arts and the sports.
• Cultural exchange was the natural starting point for normalising relations across our northern border 15 years ago.
• It therefore seems most appropriate that Ibsen Year 2006 coincides with the development of our new strategy for cooperation in the High North.
• Greater symbiosis should be developed between people-to-people contacts and business and government cooperation.
• Independent networks have also spread to other fields of cooperation, and we are now starting to see the outline of a “normal” European border region.
• 10 per cent of the population in Kirkenes is Russian. Kirkenes is our bridge to Russia. Many Norwegians travel to Murmansk to repair their teeth and their cars. And joint Norwegian-Russian enterprises, ranging from shops to shipyards, are now the rule not the exception. Russian trawlers being repaired in Kirkenes (Kimek). We would like to see a railway built from Kirkenes to Murmansk.
• Our border region has more resources, natural and human, than any other region in Europe. There is no reason why it should not become the most innovative and productive region as well. And one of the best places to live.
• However, this is not something I, or any other politician, can decide or command. We can provide a suitable framework, but it is up to you, the civil servants, businessmen and individuals, from Bodø to St Petersburg to rise to the challenge, and exploit the new opportunities.
• I know many of you are doing so. The Norwegian Government will seek to provide you with even better incentives in the future.
• When you return home after the seminar, engage with your local administration and small businesses, with federal government and big business, so that Norwegian-Russian relations become as close as for example the Nordic countries’ relations are today: something we take for granted, like being members of the same family.
• My ambition: Our relations with Russia are the most active, extensive and expanding of all our relations with other countries – this is very positive. You are the backbone of these relations. People-to-people contacts are the driving force. For example, there are 700 Russians students at Norwegian universities. How many cooperation projects could this lead to?

Thank you.