Ræða ráðherra í tilefni EFTA Business Workshop (á ensku)
Halldór Ásgrímsson
Minister for Foreign Affairs
Iceland
EFTA Consultative Committee
Business Workshop
Ladies and gentlemen.
Let me start by saying that it is both welcome and entirely appropriate that the 40 years of EFTA are celebrated with a workshop, organised by the Consultative Committee, the representatives of the social partners. Because that is what EFTA is all about; toiling for the social partners; the economic operators, the companies and the people working in them.
This Workshop is also typical of EFTA - in that it is looking forward. As highly developed technologically advanced countries, all four EFTA states are in a very good position to be at the forefront of the new economy. We all have populations which are participating energetically in the new information age - per capita internet access in Iceland is among the highest in the world, and the same is true of all the EFTA countries.
In fact I should say that the new economy is of more importance to a small, geographically isolated country like Iceland than to a large, continental economy like, say, Germany. For us, the major barriers to economic expansion have not primarily been artificial tariffs at borders with neighbouring countries.
Think about the problems which a country like Iceland has faced in the past when trying to expand and diversify economically. Our domestic market is very small. We are thousands of kilometres away from other markets. Our workforce is also small and we simply do not have the manpower for large-scale labour-intensive industries, except on a very limited and well-planned basis. Furthermore, there has generally not been the investment capital necessary to support major new enterprises.
The capacity of the new technologies to transport information at low cost has already had a fundamental effect on our economy and can be expected to continue. In the 1930s a three minute transatlantic phone call cost more than 300 dollars in today's prices. Today it costs about 20 cents. And of course speed and capacity have increased astronomically. We can now send and access almost unlimited information around the world at low cost, and can thus participate as if we were part of much larger markets.
The real price of computer processing power has also fallen - by 99.999% over the past three decades. Just as the invention of steam power revolutionised physical productivity and made mass production possible, it is clear that IT expands intellectual productivity. This is another factor that means that the small size of our population becomes less significant compared to others.
This combines with the ability to exchange large quantities of information at low cost. We have a need, like many European countries, for increased programming capacity. To solve this problem, several of our software companies have set up in India to use the considerable programming skills of that country. The concepts are Icelandic - the work can be carried out in India, the product sold all over the world.
But not everything depends directly on IT. Globalisation of the economy, which to a large extent goes hand-in-hand with the new economy, has also had a fundamental effect on Iceland. We now have ships built in China, with Icelandic know-how and technology on board. We simply do not have the manpower at home to do the labour intensive work. In a certain sense we are importing virtual labour.
As to capital, the capital markets of Iceland have taken off in the past 10 years, and are now run on rules which match those of the EU and other major economies. The increasing freedom to move and invest capital anywhere in the world has given Icelanders more freedom to invest outwardly, a freedom which they have used increasingly both in the fisheries sector and elsewhere. It has also given Icelandic companies access to large sums of money to finance enterprises here - one good example is DeCode Genetics, which is represented here today. Decode has been able to attract millions of dollars of investment from international companies to finance its genetic research.
What is the job of governments and politicians in this context? Among other things, it is our job to ensure that the internal and external legal frameworks are available to ensure that the advantages of technology can be reaped to the full, and that these advantages extend to as many people as possible. You cannot have an effective game unless you have effective rules and all play by those rules. Again this is more important for small countries, which cannot throw their weight around.
Most of all it is the task of our governments to make it possible for our nations to be full partners in globalisation. Globalisation that brings us and the rest of the world economic growth, more freedom, better access to technological progress, to information, education, democracy and human rights. Globalisation that makes us better able to fight pollution, poverty, crime and to work for peace. Like every powerful force, globalisation also has its dark sides. It is also the responsibility of governments and politicians to maximise the benefits and minimise the negative aspects.
Our participation in globalisation is through multilateral agreements like EFTA, EEA, the WTO and the OECD and agreements on free trade and investments.
We have clear ideas on how globalisation should develop for the benefit of all. We can best influence its course through participation with like-minded countries in larger structures.
At the outset I referred to the 40th anniversary of EFTA. EFTA has proven itself to be an adaptable and flexible organisation able to address the issues of the day - it is already proving an important instrument for our participation in globalisation. As to the new economy, I am also very confident that the individual members of EFTA are well placed to reap the benefits of information technology.