Safeguarding the Interests of Iceland in a Changing World

Lecture by Foreign Minister, Halldór Ásgrímsson, at the Diplomatic Academy of the Ministry of Foreign Affairs, Moscow, 2 November 2001


Excellencies, Ladies and Gentlemen,

It is an honour to address such a distinguished audience, and no light task since many of you are greater experts in international affairs than I can ever hope to be. My advantage may lie in a long political experience, as a member of Parliament since 1974 and government for 15 years, and the fact that I will be concentrating my talk on issues concerning a country not too often making it into the headlines.

Allow me, before I continue, to express my gratitude to the Diplomatic Academy and in particular its Rector, Ambassador Yuri Fokin, for the opportunity to speak here today.

INTRODUCTION

I will try to give you an insight into Iceland's current foreign policy, but as so often, to explain the world of today we need to glance back. I will focus my talk on the more important issues, and start with trade and try to explain how a small state like Iceland can play a meaningful role and safeguard its interests in times of globalisation and intensified European integration. Secondly, turning to security, I will first try to give an answer to a question I am frequently asked. Why Iceland has no armed forces of its own and how does Iceland contribute to common European security. Thirdly, I will present you with some personal thoughts on how the 11th of September has changed today's security environment and how the fight against international terrorism presents a possibility for a new departure in Russia-NATO relations.

But before I embark upon the somewhat difficult task to answer these questions, I would like to start with the relations between Russia and Iceland, relations which are on the upswing I'm pleased to note. Russian-Icelandic cooperation in fisheries and the geothermal energy sectors are good examples.

1. HISTORICAL OVERVIEW

Russia and Iceland are very different countries, at least in size and population. However, Russia and Iceland have more in common than people usually realise. Both countries have a rather harsh climate, with long winters. Both are sparsely populated, and both Russians and Icelanders are used to open spaces.

Both countries adopted Christianity almost at the same time, Russia in 988 and Iceland in the year 1000. Both nations are in Europe, but at the same time, in a sense, not part of it.

Although we are a part of the same continent our historical experiences were separate for many centuries, perhaps with one important exception. Some sources maintain that our ancestors, the Vikings, had a hand in the establishment of the original Russian State, Kívskaja Rús.

There is one more feature that our countries share. What I have in mind is the major role that the sea has played in the development of our states, for subsistence in the case of Iceland and primarily for security in the case of Russia.

Russia and Iceland have indeed enjoyed good bilateral relations for a long time. In 2003 Russia and Iceland will celebrate the 60th Anniversary of diplomatic relations. Our relations obviously go much farther back. I think Russia first got interested in Iceland in the early 18th century during the reign of Peter the Great, in the context of wars in Europe. I shall reveal no details but suffice it to say that at that time there was a conspiracy in Copenhagen that had as its aim a Russian takeover of Iceland, Greenland and the Faeroe Islands. For better or worse this cunning plan was exposed with dire consequences for the conspirators.
There was nothing sinister, however, to the first Russian naval visit to Iceland in the summer of 1870 when the warship Varjak (Væringi) of the Imperial Navy visited Reykjavík with Grand Duke Alexei Alexandrovich aboard. I would like to claim, however, that we took the initiative in developing bilateral naval contacts as early as the 18th Century. Then an Icelandic adventurer, Árni Magnússon, served with the Imperial Navy under Catherine the Great. Mr. Magnússon was very fond of Russians. At the risk of offending our long-standing friend and ally Denmark I will reveal that in his memoirs he states that he would rather serve Russia for 10 years than Denmark for five days. And venturing further out on the limb and now at the risk of breaking the unity of the North Atlantic Alliance I will disclose that Mr. Magnusson fought valiantly with Russia against the Turks!

It is interesting to note that Russia opened an Honorary Consulate in Reykjavík as early as 1912, although it ceased to function after the revolution. In this context I would like to mention that a country with a small Foreign Service like Iceland has relied on Honorary Consuls from early on, although we did not reciprocate the Russian move until 1999 by opening a Honorary Consulate in St. Petersburg. Honorary Consulates in Kaliningrad and Murmansk have since been opened.

Diplomatic relations were established during World War II and our Embassy in Moscow is one of five established before Iceland became a republic in 1944. Our first ambassador to Moscow, setting off from London in April 1943, travelled for months via Casablanca, Cairo, Teheran and Baku to reach Moscow and open the embassy, which was, by the way, situated at Hotel National until the end of that decade.

The main objectives of the Embassy were to enhance the understanding of the government of the Soviet Union and win its support for the establishment of a republic in Iceland. The Government of the USSR promptly recognised the Republic when it was declared in 1944. The second main objective was to enhance trade relations. We were then, as well as now, interested in exporting fish products, especially herring, as well as sheep-skin. The main imports to Iceland from the USSR at that time were oil and timber, the latter always a spare resource in my country. Even though we were at the opposite sides of the geopolitical divide during the Cold War, we enjoyed remarkably good bilateral relations. For most of the fifties, sixties, and seventies, the USSR was one of our most important trading partners. Not least due to the fact that when a fishing dispute arose between Iceland and Great Britain in 1952 and Icelandic fish imports were banned into Great Britain the USSR became overnight one of the largest buyer of Icelandic fish. This is well remembered in Iceland. Referring to Iceland a foreign reporter once noted that it was indeed a strange country that hosted American military bases but which cars and fishing fleet were driven by Soviet fuel.

I would like to stress that it is our steadfast aim to increase trade with Russia, hopefully to the level that existed before the USSR was dissolved.

2. FOREIGN POLICY PRIORITIES - SAFEGUARDING THE INTERESTS OF ICELAND IN TIMES OF GLOBALISATION

International cooperation has become an absolute necessity in todays world. Individual states, not least small states, simply cannot on their own overcome the challenges, or enjoy to the full extent the opportunities inherent in the process we know as globalisation. I think it is fair to say that in Iceland a general consensus exists on the main foreign policy priorities: Wide-ranging economic co-operation with the EU within the framework of the European Economic Area (EEA), extensive cooperation with the Nordic countries and active participation in the United Nations as well as numerous other organisations concerned with European and international affairs, such as the OSCE and the Council of Europe. I would also like to add that after the Cold War a widespread consensus has also been achieved in Iceland's NATO membership and our defence co-operation with the United States.

This process has led to a more proactive role of the Ministry for Foreign Affairs and External Trade than used to be the case. Support for the expansion of Icelandic enterprises abroad, enhanced participation in international peacekeeping and increased and more focused development aid.

In my view Iceland stands to benefit from globalisation. In the past we had to surmount many obstacles when we tried to expand and diversify our economy. 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. Furthermore, investment capital to support major new enterprises has been limted. Globalisation, coupled with the phenomenal growth in information technology (often referred to as the new economy), has changed the Icelandic economy to a large extent. Software design, for instance, is a fast growing sector and we have scored a number of successes internationally.

As to capital, the capital markets of Iceland are today operated by 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 abroad, a freedom which they have used increasingly, both in the fisheries sector and elsewhere. It has also given Icelandic companies access to capital to finance enterprises and research.

In the case of Iceland, one of the primary goals of our foreign policy in the context of globalisation is to ensure that the internal and external legal frameworks are in place to ensure that the advantages of technology and the ideas of entrepreneurs can be exploited to the fullest extent. A case in point is the intensive work carried out by the Ministry for Foreign Affairs and other Ministries in managing the European Economic Area Agreement, which gives Iceland full access to the internal market of the European Union and has brought great benefits to Iceland.

There will be no game without rules and the mechanism to ensure that all play by the rules. Again, this is more important for small states as they cannot throw their weight around to achieve their aims. Small states have to practice skilful diplomacy - force or the threat of force and the imposition of economic sanctions are not an option, and political pressure rarely is. The most effective way for a small state to achieve its aims is through the art of convincing, that is, convincing other states of the rightfulness of a particular cause and by appealing to common values and long-term common interests, which are often at stake. I might add that it helps, and often helps a lot, to have powerful allies.

The three so-called cod wars in the fifties, sixties and seventies with Great Britain are well known. We have emerged victorious in these disputes against a power by far stronger for the following reasons: diplomatic manoeuvring, strong legal and moral arguments and by skilfully turning our military weakness into a moral and political strength. Weakness can in certain circumstances be an asset.

The process of globalisation has led us to realise that we have to have proper representation, whether bilaterally or multilaterally. This is why we have in the past few months opened Embassies in Canada and Mozambique, our first in Africa. And I have come to Moscow directly from official visits to China and Japan where I formally opened our Embassy in Tokyo, which will together with our Embassy in Beijing put us in a much stronger position to take advantage of the opportunities that Asia has to offer.

I would however like to concentrate here on Europe, our relations with the European Union and why I have been determined to assess Iceland's position in Europe on a continuous basis. The EU is expanding however and could reach 22 members, even 26, in the not too distant future. In joining the EU new members will also join the EEA Agreement and move into a much closer relationship with Iceland, as well as other EEA/EFTA countries, Norway and Liechtenstein. Individuals and economic operators in these countries will have new rights and obligations that affect us - a Polish worker will no longer have to seek a work permit in Iceland [actually Polish workers are about 1% of our workforce, and make a very valuable contribution to the economy]. A Hungarian bank will have the right to operate in Iceland without any special permission.

I would like to stress that Iceland has never applied for EU membership. Nevertheless, we share the view that the enlargement of the EU will promote political stability and economic growth. We do not believe that the enlargement of the EEA will pose major problems for us. The inclusion of Russia into these European integration structures is in my view both important and necessary. We welcome the results of the recent EU-Russia Summit, which we hope will lead to intensified economic relations between the EU and Russia, which could also be of direct interest to Iceland.

As I have previously mentioned, Iceland has to have stronger representation in multilateral fora to safeguard our interests. It follows that we have to take on larger responsibilities in the international organisations of which we are members. This we have put into practice. On behalf of Iceland, I chaired the Committee of Ministers of the Council of Europe in 1999. Next year Iceland will be willing to assume the chairmanship of the Arctic Council.

I would like to stress that we are an active member of the United Nations. And to underline our increased involvement, Iceland has announced its candidature for the first time for a non-permanent seat on the Security Council of the United Nations for the period 2009-2010. The Nordic countries have endorsed our candidature. It goes without saying that preparations for this huge task have already started.

3. THE NEW SECURITY ENVIRONMENT - A ROLE FOR ICELAND WITHOUT ARMED FORCES

I will now try to answer the second question I posed at the beginning of this lecture: Why has Iceland never established armed forces? After all we could have followed the example of Luxembourg which established armed forces after World War II. Luxembourg has a population of 380.000 whereas Iceland's is 290.000. The easy answer would be that during the Cold War the most likely threat scenarios made it clear that armed resistance would be suicidal because of a the lack of manpower. This answer makes sense but there is more to it. The reasons are not least historical, but I shall condense the facts. First of all, during the Reformation in Iceland (in the latter half of 16th century) the King of Denmark found it prudent to disarm the Icelanders. So, if there ever was a "universal or complete disarmament" (áróðursslagorð Krússjévs á 6. áratugnum) it took place in Iceland in the latter half of the 16th century. We have not borne arms since.

Secondly, the geographical distance from Europe and the lack of wealth and strategic resources did not tempt the great powers to turn their gaze in our direction. It created a sense of security from an outside threat, although in the 17th and 18th centuries a savage pirate raid and a failed coup d'etat by a Danish sailor and adventurer, who declared himself the King of Iceland, caused considerable commotion at that time.

Thirdly, the colonial power, Denmark, was responsible at the time for the defence of Iceland. The First World War did not affect Iceland in any significant manner and when Iceland became a sovereign state in 1918, sharing a king with Denmark, Iceland was declared eternally neutral, and isolationist strains were strong. Iceland did for instance not become a member of the League of Nations nor a founding member of the United Nations.

The futility of neutralism was driven home in May 1940, shortly after Denmark and Norway were occupied by German forces, when British warships appeared off the coast of Iceland and occupation force marched into the capital. It goes without saying that the transgression of Icelandic sovereignty was protested by the Government of Iceland.

I will not go further into the course of events preceding Iceland's final break with neutralism when we became a founding member of NATO in 1949 and later signed a bilateral defence agreement with the US in 1951. Suffice it to say that the overriding reason for this break was a feeling of vulnerability as the Cold War was brewing, although neutralist and sometimes isolationist tendencies remained salient for many decades.

Iceland has until now played a modest role in European, not to mention world security affairs. Being the Foreign Minister of a small nation with no military forces of her own, I am occasionally asked if Iceland is not really a "free rider" in NATO. My answer is no. During the Cold War Iceland provided facilities, that is to say land, to US Forces for the defence of Iceland and the North Atlantic so that the vital trans-Atlantic air and sea lines of communication and transportation could be kept open in the event of a conflict in Europe. Right up to the end of the Cold War this was one of the main bones of contention in Icelandic domestic politics.

In the complex security environment of the Post-Cold-War era Iceland has provided trained medical and law-enforcement personnel to NATO peace-keeping and relief operations in war-torn areas, such as Bosnia Herzegovina and in Yugoslavia's Kosovo province. This role is being strengthened by the establishment of the Icelandic Crisis Response Unit with a reserve pool of up to 100 volunteer experts, such as police officers, health workers, engineers, search-and-rescue experts, for peace-keeping and relief operations. This effort should be seen as a clear sign of our political will to participate directly in promoting security and stability in Europe.

I would like to point out an important fact: Iceland has never had to face man-made disasters resulting from modern warfare. But another kind of threat has constantly been present throughout our history: natural disasters. We have become more adept in fighting them now, but in the course of our history they have repeatedly taken a heavy toll of our population. To take one example; in the 18th century Iceland, lost about a third of her small population following volcanic eruptions that led to famine. The many search and rescue organisations around Iceland, which are mainly voluntary, reflect the perception of threats stemming from forces of nature.

It is therefore no coincidence that one of our main contribution to European Security has been the provision of humanitarian relief workers and civilian experts for crises-management operations.

4. IN THE AFTERMATH OF 11 SEPTEMBER

Ladies and Gentlemen,

I don't recall that I have ever quoted myself, but let me make an exception here today. A few years back speaking to members of the Iceland Defence Force, that is, the American military in Iceland, I concluded on the following note:

How the 21st century will unfold is an open question and there is probably nothing as difficult to live with as uncertainty, but American forward presence and commitment are an important reassurance as we enter the unpredictable 21st century.

On the 11 of September the uncertainty I referred to was replaced by one thought: vulnerability. And as for American forward presence, I had in mind US military presence in Iceland, not Uzbekistan.

Being the Minister responsible for defence I can assure you that the feeling of vulnerability is just as difficult to live with as uncertainty. Bearing in mind what took place in the heart of a superpower, it would be irresponsible of me to elaborate on what a sophisticated terrorist organisation could do to a small state, and reckless to disclose what measures have been taken to prevent that.

Although terrorism has haunted us for a few decades it has not inflicted death and destruction upon us on such a horrific scale as on that dark day in September in the United States. In this context I would like you to know that neither have we have forgotten the victims of the terrorist attacks in Moscow and Volgodonsk in the fall of 1999.

I think we have to admit that we slept on our guard. I think we tended to see this threat as one primarily to be dealt with internally and there has been a certain reluctance to cooperate internationally to fight it.

I will be blunt, this has also been true for many NATO Allies and partners. The threat has been discussed, information shared and the threat acknowledged in the adapted Strategic Concept of the Alliance, but the necessary collective mechanisms have not been developed.

As I have mentioned before uncertainty has been replaced clear and present vulnerability. A new and radical approach to the threat of terrorism is needed, the number of soldiers, aircraft or ships is of course important in that context - but international cooperation based on mutual trust is even more important.

To deal with that effectively requires a comprehensive, long-term approach beyond military reprisals, however necessary the use of force may be. As a global threat, terrorism, including the elimination of its networks and resources, will require long-term international cooperation on an unprecedented scale. The broad coalition led by the US, with the indispensable support of Russia, has created a window of opportunity, an opportunity to bury the ghost of the Cold War that from time to time haunts the relations between NATO and Russia. I think President Putin put it right in the Bundestag last September:

I quote:

"I think we all are to blame for what happened, and first and foremost we, politicians, to whom the ordinary citizens of our nations have entrusted their security. And this happens first and foremost because we have so far failed to recognise the changes that have happened in our world over the past ten years and continue to live in the old system of values: we are talking about partnership, but in reality we have not learned to trust each other."

Unquote.