Foreign Affairs Address to the Althing

Foreign Affairs Address to the Althing, March 31, 1998
Mr. Halldór Ásgrímsson, Minister for Foreign Affairs and External Trade of Iceland
Unofficial Translation


The Foreign Service

In my address to the Althing just under a year ago, I reported that a study had been initiated on ways to reinforce the Foreign Service in order to make it as capable as possible in fulfilling its role in a changed world. A committee I appointed for this purpose has now completed its task and issued a report which will mark a turning point in the work of the Service.

The reason for the study was the increased globalisation taking place in recent years, in politics, trade and culture. The interest in strengthening the Foreign Service, expressed by all political parties as well as the commercial community has greatly encouraged this work. At the same time, this interest bears witness to the general recognition of Iceland's changed position in the world. Developments, not only in our neighbouring countries but on distant continents, now have an impact on living conditions and social progress in Iceland. It is of vital importance for Iceland, therefore, to secure its interests in a more complex, and in many ways more difficult international environment, which at the same time offers more diverse opportunities, where united, technically advanced and well-educated nations can establish footholds regardless of distances.

The Foreign Service plays a key role in this work, and indeed its tasks have expanded tremendously in recent years. Its facilities and staff, however, are still geared to the conditions that reigned in foreign affairs a decade ago. Radical changes are needed. I have submitted the recommendations of the committee to the Cabinet, and its opinion has been made public.

In brief, the committee emphasises the need for Iceland to maintain a strong Foreign Service in order to preserve Iceland's interests. The Departments of the Ministry in Iceland will be reinforced in order to ensure solid policymaking, careful working procedures and in order to assume new responsibilities. More staff will be hired, equipment will be modernised, co-operation between ministries will be improved, projects prioritized and the Overseas Business Services developed still further.
It is also recommended that the preservation of interests abroad be reinforced through the establishment of new embassies in Japan and Canada and through the establishment of a permanent delegation at the Organisation for Security and Co-operation in Europe in Vienna, which at the same time would be an embassy for Austria and its neighbouring countries. More support for honorary consuls is also recommended.

It is clear that these changes will entail considerable increases in expenditures, not less than ISK 300 million if all the recommendations are implemented. This represents a 25% increase in appropriations to the Foreign Service.

It is important to consider these matters with an open mind, and understand that this is an investment for the future. The cost of the embassies may appear high, but it is money well spent and will generate revenues for the economy. The cost of the entire Foreign Service is still less than 2% of total State expenditures, of which half represents costs of the Ministry and the embassies. The time is past when it was sufficient simply to monitor events in our closest proximity. The new times demand that we devote more effort to preserving our national interests abroad. The nations of the world are more interdependent, and the interaction of unrelated issues has increased.

Security and Defence

The first debate on a parliamentary resolution on the ratification of three Protocols to the North Atlantic Treaty, on the membership of Poland, the Czech Republic and Hungary, took place a short time ago. There is overwhelming support for welcoming the three states. The Cold War is over, and its close has transformed Europe. The goal now is an undivided continent and security for all nations. The enlargement of NATO underlines a new way of thinking consistent with the positive changes that have taken place. The present security architecture of Europe is a complex and interactive system of numerous international organisations. It is not based on two opposite poles as before. These international organisations work separately or together, depending on the task at hand. The best example of this is in Bosnia, where these organisations complement one another.

There will be no permanent security in Europe without the participation of Russia, the largest and most populous country of the continent. Russia is a full partner in most of the organisations forming the new security architecture, and is involved in co-operation with the organisations of which it is not a party. Russia and NATO are engaged in complex and close co-operation in the Permanent Joint Council (PJC), and they are working together on the peace implementation in Bosnia. Finally, NATO has recognised Russia's concern regarding the enlargement of NATO by making a unilateral declaration stating that it has neither the need nor any plans for permanent stationing of troops or nuclear weapons in new Member States.

Icelanders have emphasised closer ties with Russia, both on a bilateral and multilateral basis. Co-operation of this kind promotes mutual trust and relationships between nations and individuals. Several agreements between Iceland and Russia are in preparation. They include an agreement on investment, an agreement on co-operation in fisheries, air transport agreement and a double-taxation agreement. It is my sincere hope that these agreements will be concluded soon.

Over the past few weeks and months, our attention has once again been drawn to the conflict and uncertainty on the Balkan Peninsula. The actions of Serbian police forces in the villages of the Kosovo area have aroused fear and apprehension of a new wave of conflicts in Europe. The dangers are obvious: there has been instability in Albania, a large Albanian minority resides in the former Yugoslavian Republic of Macedonia, and close by there is Bosnia-Herzegovina with its delicate and fragile peace.

I have placed great emphasis on Iceland's support for the decisions of the Contact Group on Kosovo. It is important to send a clear message to the Serbian government that the international community will not tolerate ethnic cleansing. It is also important to reaffirm to the leaders of the Albanian-speaking part of Kosovo the international support for their demands for autonomy. The international community has adopted the position that Kosovo should be granted autonomy within the Federal Republic of Yugoslavia and I believe this to be a feasible solution.

The international reaction to the recent events in Kosovo brings to mind Bosnia and the reactions of the superpowers to the conflict there and in Croatia. The expensive lesson learnt from the international dissent regarding that area has taught us that international solidarity and co-operation is the only way to approach a solution to the problems of the Balkans. All the chief international organisations, such as the United Nations, NATO, OSCE, the European Union and the International Monetary Fund have participated in the peace implementation. The individual nations of the world have also contributed, and Iceland has joined them through various health-sector projects and through our participation in the NATO peacekeeping forces and international police forces of the United Nations. A specially appointed representative of the United Nations is in charge of the peace implementation and co-ordinates the activities of international organisations and individual states.

The Organisation for Security and Co-operation in Europe

The Organisation for Security and Co-operation in Europe plays an extensive role in the security architecture of the continent. This applies both to the field of confidence-building measures in the military area and to the reinforcement of human rights, to name only some elements of its activities. All the European States, as well as Canada and the United States, are members, but unfortunately Iceland has not yet been able to establish permanent participation in Vienna.

The Council of Europe
The Council of Europe in Strasbourg is engaged in active efforts regarding the promotion and preservation of human rights. The activities of the Council are directed at promoting stability and security in the Member States by entrenching democratic ways of government and reinforcing the fundamental rule of law. It is clear that through its preventive work, the Council performs an important role in the new security architecture of Europe.

The Member States of the Council have grown considerably in number following the end of the Cold War, and their number is now forty. Many of the new Member States were characterised by undemocratic methods of government and were unfamiliar with the principles of the modern state governed by the rule of law. The Council has therefore assisted these states in various ways to ensure human rights and secure democratic forms of government.

In order to ensure the continued credibility of the Council of Europe, all its Member States must uphold the commitments undertaken on admission. In this respect, all the states must enjoy equal treatment. The enlargement of the Council must not lead to lowered standards in this area, as respect for human rights is an inalienable element of ensuring security and stability in Europe. In the next few years, still more emphasis will be placed on the surveillance aspect, and the Parliamentary Assembly of the Council of Europe will have an important role to play in that regard.

The Council of Europe does not hesitate to address politically sensitive issues if they concern the principles of law and goals that the organisation is charged with preserving and promoting. Earlier this month, for instance, Croatia was requested to explain the words of the President of Croatia at the meeting of the Committee of Ministers, where his controversial statement was regarded as inconsistent with the commitments of Croatia as a Member State of the Council. I had the opportunity to discuss this matter with the Foreign Minister of Croatia during my trip to Zagreb.

Next year will mark the fiftieth anniversary of the founding of the Council of Europe. Iceland will then, for the first time, assume the Chairmanship of the Committee of Ministers. This entails representation of the Council vis-à-vis other international organisations such as the OSCE, EU, NATO and UN. The Chairmanship of the Council of Europe is a great responsibility and will call for initiative on the part of Iceland and heavy workload. The permanent mission of Iceland in Strasbourg has been enlarged in preparation for this task.

The Baltic Council, Barents Council and Arctic Council

In the area of regional co-operation, Iceland's contribution has consisted of participation in the Baltic Council. We have also participated in regional co-operation within the Barents Council, which is concerned mainly with preventive measures against pollution and with economic development in North-western Russia. Trade relations with this region have increased in recent years, especially in the area of fisheries. It is clear that success here is in Iceland}s interests.

In February, an agreement was reached within the Arctic Council on rules of procedure in the work of the Council in its efforts toward sustainable development. The main purpose of the Council is to promote the sustainable utilisation of natural resources, a healthy environment and biological diversity. It is therefore in the interests of Iceland for the Arctic Council to become, as soon as possible, a forum where the Member States can join forces to ensure at the same time sustainable utilisation of natural resources and normal environmental protection.

The Defence Co-operation

As regards Iceland's defence, i.e. our co-operation with the United States, our contribution to our own defences, and our security co-operation with allies and partners, it is clear that the main task ahead is the review of Iceland's defence policy in the long term, on which work is now in progress. The main goal here will be to ensure the future defence of the country on the basis of our membership of NATO and our bilateral defence treaty with the United States.

At the same time, we need to define what we intend to contribute to the common security of the Member States of NATO and its partners. This will involve considering participation in exercises such as Co-operative Safeguard 97, which was held here in Iceland last summer, and participation in direct peace efforts or relief projects, as we have already done in Bosnia.

Relations with the European Union

Iceland now holds the Chairmanship of EFTA and of EEA/EFTA for the first part of this year, and thereby assumes a leadership role in the implementation of the EEA Agreement during this period. The implementation of the Agreement is going well. The Agreement on the Economic Area has undeniably proven beneficial for Iceland. We enjoy the economic and political benefits, and we can influence the progress of various matters beyond the influence of countries which are not members. The main goal of the European Union is to ensure peace and stability in Europe, and through our participation in the EEA we contribute to that process.

The political consultation within the framework of the EEA gives us an opportunity to present our views to the European Union and we can be parties to the position of the Union in important affairs.

If we look at the two main future projects of the European Union, i.e. its enlargement and the establishment of the European Monetary Union, these will undeniably have an effect on Iceland. The enlargement of the Union is of direct interest to us, as the EEA Agreement assumes that new EU Member States will also be members of the European Economic Area.

It is virtually certain that the Monetary Union will be implemented next year with the participation of more states than originally anticipated. The common currency will inevitably affect the economies and trade of other countries, including Iceland. We already hear voices in the Icelandic trade sector stating the necessity of linking the Icelandic króna firmly to the new common currency in order to reduce the costs of Icelandic enterprises resulting, among other things, from currency transfers and fluctuations in currency rates. Late last year, the Government appointed a consultative committee to assess the effects of the Economic and Monetary Union on the Icelandic economy.

Extensive review of the Schengen co-operation is now under way in the wake of the decision of the EU Intergovernmental Conference in Amsterdam. The Amsterdam Treaty contains provisions to the effect that the association of Norway and Iceland in the Schengen cooperation should be based on the agreement between Iceland and Norway and the Schengen States from 1996. The Icelandic Government is of the opinion that the Schengen co-operation has been successful. It ensures both our continued participation in the Nordic Passport Union, while at the same time laying a foundation for extensive police and judicial co-operation. Our continued willingness to participate is clear: however, it is obvious that in order for the co-operation to take place, the full participation of Iceland and Norway must be secured and based on international law as before. It is still not clear whether an acceptable solution can be found, but in the light of progress so far, there is hope that a favourable solution will be found in this important matter.

Relations between the EFTA States and Countries Outside the EU

In recent years, the EFTA States have concluded free-trade agreements with thirteen states and adopted declarations on cooperation with seven states. Negotiations are ongoing on free trade with Cyprus, the Palestinian Authority and Tunisia, and negotiations are starting with the Jordan. Preparations are also in progress for a decleration on cooperation of the EFTA states with the Gulf Cooperation Council.

Free-trade talks with Canada represent a milestone in the activities of EFTA and they represent the most important task of EFTA since negotiations on the European Economic Area were concluded. The free-trade talks will be the most important topic of discussion at the Ministerial meeting of EFTA in Reykjavík in June. The events that lead to the free-trade talks between the EFTA States and Canada were brief. Under the EFTA Chairmanship of Iceland, this matter has taken precedence. The first meeting will take place next May and is being prepared internally by a working group of six ministries.

Nordic Co-operation

Active participation by Iceland in Nordic co-operation is, as before, an important aspect of Icelandic foreign policy. My report on the work of the Nordic Ministerial Committee was discussed here on March 19th. The main pillar and essence of the Nordic co-operation is the inner co-operation of the Nordic States. This involves diverse co-operation which takes place not only between governments and parliaments but also between virtually all non-governmental organisations in the Nordic countries. The Nordic countries co-operate closely on issues relating to the European Union and the European Economic Area. The membership of Finland and Sweden in the EU does not appear to have reduced their participation and efforts in the Nordic co-operation, and the ideas of the Finnish Government on a "Nordic Dimension" in the work of the European Union are positive and enjoy our full support. All Icelandic embassies and permanent committees are involved in Nordic consultation, virtually on a daily basis. This is invaluable in an understaffed Foreign Service.

The World Trade Organisation

Next May will mark the fiftieth anniversary of the establishment of the multilateral trading system. The second ministerial meeting of the World Trade Organisation (WTO) will be held in Geneva at about the same time to plan the future activities of the Organisation in a new century.

Parallel to the political upheaval, the international trade environment has undergone a transformation in recent years, and with the increased liberalisation of trade, the world has in effect become a single market area. The World Trade Organisation will lead this unification process and thereby mould the trade system of the coming century. Its role is not only to promote increased liberalisation in international trade but to ensure adherence to current principles, whether in the area of goods, services or intellectual property rights.

The World Trade Organisation will launch new negotiations on trade in services and agriculture before the turn of the century. It is too early to say whether new tariff talks in the field of trade in goods will follow so soon after the conclusion of the Uruguay round of discussions, but support is growing for this idea. Iceland has aligned itself with those nations who favour a more extensive scope for the discussions at the turn of the century than presently visualised, and new discussions on tariff reductions on goods is a minimum requirement in this respect.

Overseas Business Services

In just over six months of operation of the Overseas Business Services the need for such a service has become increasingly obvious. Enterprises are increasingly turning to the Foreign Ministry with requests for assistance in the area of trade. These are not only large and medium-sized enterprises, but also smaller enterprises. These developments are in line with the increased globalisation of Icelandic enterprises. All the Icelandic embassies provide market assistance and services to enterprises. During the term of the current Government, a policy has been adopted of using visits abroad by ministers and officials in the interests of the economy whenever possible. A visit to Poland this year is currently in preparation, as well as visits to Thailand and Malaysia next year. In all these visits, the delegations will be joined by representatives of Icelandic enterprises and interest groups. It is the unanimous opinion of the representatives of the Icelandic economy which have participated in such visits that they are an important contribution to opening new markets and establish new footholds in our traditional markets.

The upheavals in the Asian economies a few months ago came as a surprise after the rapid progress which had taken place there. Japan had for some time been coping with stagnation ? but the weak infrastructure of the economies of Indonesia, South Korea and other Far Eastern countries led to a sudden and serious economic depression. The measures taken by the International Monetary Fund and other international organisations have already had some effect. The opinion is widespread that a balance will be reached in the economies and financial markets of Asia in a relatively short time. It is probable, on the other hand, that the social consequences of the depression will last for many years. Unemployment, for instance, has grown tremendously, and the prices of consumer goods have gone up. It is important for governments across the world and international organisations to learn their lesson from the economic developments of the last few months in Asia so that similar events can be avoided in other parts of the world in the future.

The United Nations

This year, the United Nations will commemorate the fiftieth anniversary of the signing of the Declaration on Human Rights in 1948, which has been the guiding light in all struggles for the preservation of human rights ever since. Human rights are an inseparable aspect of all international politics, and not the internal affair of individual nations. Human rights are international and universal and it is the responsibility of the international community to ensure that they are respected.

The 54th Session of the Commission on Human Rights is now beeing held in Geneva. Iceland is an observer, and will as before co-sponsor numerous resolutions on the state of human rights across the world, as well as the human rights of various vulnerable social groups. Iceland does not accept violations of human rights in the name of religion, tradition or culture. In this context, the work of numerous Icelanders within non-governmental organisations deserves to be noted. The co-operation of public authorities and these organisations should be promoted.

It is important for Iceland to participate in the efforts of all nations to solve the enormous global problems confronting mankind. In the Economic and Social Council, of which Iceland is a member, we have drawn attention to the importance of sensible utilisation of marine resources, prevention of pollution of the sea and the importance of the sea for the food security of the world. Iceland has stressed the importance of new and renewable sources of energy, the importance of market forces in development co-operation and the fact that human rights are an inalienable aspect of all the activities of the United Nations. The Economic and Social Council is also an important forum for discussions on health, education and the prevention of crime and drug abuse.

The decade now drawing to a close has been dedicated to the struggle against drug abuse. The time is long overdue for the nations of the world to arrive at a consensus on realistic measures to limit the production, distribution and use of illegal substances. For this purpose, a special session of the General Assembly will be held on the subject of the prevention of drug abuse.

The Year of the Ocean

The United Nations have devoted the current year to the sea, which attests to the importance attached to the marine biosphere and the utilisation of its resources in the activities of the Organisation. A committee has been appointed to discuss Iceland's role in the Year of the Ocean, and the Government has issued a statement on the occasion. The Year of the Ocean provides us with an opportunity to draw the attention of the world to Iceland's environmentally sound marine products and thereby pave the road for Icelandic export companies. Bearing these interests in mind, Iceland will participate in the World Fair in Lisbon, which will be dedicated to the oceans. In addition, it has been decided that a United Nations Commission on Sustainable Development will address the matters of the sea next year and every effort will be made to make Iceland's voice heard in that forum.

Natural resources have for a long time been among the most important issues of Iceland's Foreign Service. Recently, the decision was made to reinforce its work in this field, and a new Department for natural resources will be established at the Ministry for Foreign Affairs. The task of the office will be to support negotiations with foreign countries on the utilisation of natural resources and participation in various agreements and international co-operation on natural resources and environmental issues.

Although every year is the year of the ocean for Iceland, it is important to make use of every available opportunity to promote sensible and reasonable discussion in international fora on the sustainable utilisation of the living resources of the sea. It is a matter of undeniable concern how broad statements and doomsday predictions on overexploited fish stocks and threats to the environment resulting from pollution characterise international discussions on fisheries. Fortunately, Icelandic waters remain among the least polluted in the world, and much attention is given to our success in the field of fisheries management. International agreements on fisheries, especially in the case of fish stocks utilised by Iceland and other nations, are now, as before, among the main tasks of the Foreign Service. Negotiations on our cod fisheries in the Barents Sea have not yet returned results, although constant work is in progress on achieving solutions. Better results have been obtained in reaching an agreement on the control of fishing from the Norwegian-Icelandic herring stock. An agreement of four coastal nations, Iceland, the Faeroe Islands, Norway and Russia, as well as the European Union, was reached last October. At the same time, good results have been obtained regarding work on regional fish stocks.

Around mid-December of last year, preliminary negotiations were begun between Greenland, Iceland and Norway on the organisation of capelin fisheries in the economic jurisdictions of the three countries. The denunciation of the Capelin Agreement at the end of October means that no agreement will be in effect at the end of the current capelin season on April 30th if a new agreement has not been reached. At the end of February, the parties submitted their principal claims. Iceland's principal claim is for its real share to be better ensured than under the current agreement, and at the same time that the parties negotiate access to each other's jurisdictions through bilateral agreements and that the arrangement of surveillance and information matters are better ensured in the new agreement.

It is Iceland's unwavering policy that all the living resources of the sea should be utilised in a sustainable manner. This includes whales and seals, as marine mammals play an important role in the biosphere of the sea around Iceland. Pursuant to the resolution adopted by the Government in May last year, where the policy of the Government to resume whaling is reiterated, negotiations have taken place with various states. Special attention has been given to the question of whether the change in attitude to whaling which has been in evidence in the International Whaling Commission could lead to a review of the Icelandic position on membership of the Commission. It appears that we are somewhat short of the goal, but Icelandic authorities will continue to monitor developments and assess the situation.

The affairs of the sea and the utilisation of its living resources is one of the main subjects of the Convention on Biological Diversity to which Iceland became a party in 1994. A working group has been appointed to monitor, among other things, affairs concerning the sea in that forum. A study is also being conducted of Iceland's possible participation in the Convention on International Trade in Endangered Species of Wild Fauna and Flora, CITES, as there are various signs of a increased understanding of the views advocating sensible and sustainable utilisation of resources in that forum than before. It is important to monitor this matter carefully.

Negotiations on Climatic Change

Discussions in the forum of the United Nations on limiting the emission of greenhouse gasses into the atmosphere are an example of how the utilisation of resources and environmental protection are intertwined, with direct consequences for the Icelandic economy. The negotiations on climatic change are significant for Iceland in two ways. First, there is great uncertainty about the consequences of the greenhouse effect for the Arctic Region, and second, Iceland's possibilities for limiting the emission of greenhouse gasses is more limited than those of other industrial nations.

Although much is unclear regarding the effects of greenhouse gasses on the global climate, we cannot turn a blind eye to the risks which could be posed by these effects. It is therefore important to limit emissions of these gasses in the world, and the agreement reached at the Kyoto Conference to this effect gives cause for satisfaction. The Kyoto Protocol assumes that the total annual emissions by industrial states in 2008-2012 will be reduced by just over 5% compared to 1990.

Measures were taken in this country to utilise geothermal energy for space heating instead of fossil fuels prior to the base year of 1990. Had these measures not been taken, the release of greenhouse gasses in Iceland would have been about 40% greater in 1990, or close to the average of the OECD states. All electricity needs and about 98% of the requirements for space heating are now met by using hydropower and geothermal energy. Thus, Iceland has achieved maximum results in reducing emissions in precisely the area where other nations intend to achieve most of their results in the coming years.

Our possibilities for reducing emissions from transport, fisheries and industrial processes are insubstantial at this time, as in those areas we are largely dependent on international technological advances. It is important for Iceland to keep a close eye on such advances and participate actively in international co-operation in this area.

The provisions of the Kyoto Protocol on emissions limits take some account of Iceland's special position. However, the Protocol falls short of our needs, and is therefore unacceptable in its present form. However, there is further recognition of our special position in a decision of the Conference of the Parties to the effect that the position of those states should be adressed where single projects can have a substantial proportional effect on the total emission of gasses. This provision is suitable to the situation in Iceland. To give an example of what a single project can do to increase total emissions in our small economy, one 180,000 ton aluminium plant will increase total emissions by 12-13%. In most other countries the effect would be negligible.

At the next Conference of the Parties, which will be held in Buenos Aires next November, Iceland will emphasise the implementation of the abovementioned decision. The result must have the effect of allowing us to continue to use our clean and renewable sources of energy. Any other result would be in direct contradiction of the ultimate goal of the Framework Convention on Climate Change, and Agenda 21 on sustainable development which emphasises the increased use of renewable energy sources. It is also important to reach an acceptable conclusion regarding consideration of the binding of carbons through revegetation of degraded land.

Iceland wishes to participate actively in the Framework Convention and the Kyoto Protocol to the Convention, and hopefully the implementation of the decision mentioned above will make this possible. This will not become clear, however, until after the Conference of the Parties in Buenos Aires, at the earliest. It is clear, however, that we need to take further measures in Iceland to limit the emission of greenhouse gasses. Work needs to be done on a progressive plan of action which covers releases from all activities in the country as well as binding through vegetation. This we must do regardless of whether we can become a party to the protocol or not.

Development Aid

It is well known that the Government of Iceland has decided to increase substantially its contributions to bilateral development co-operation through the Icelandic International Development Agency, ICEIDA. Signs of this will be evident next year in the activities of the Agency, which is currently involved in projects in four African countries, Namibia, Malawi, Mozambique and the Cape Verde Islands. Efforts will be directed at increased projects in the health and education sectors, especially in Malawi and Mozambique. Special emphasis will be placed on aid to women, as assisting women has proven to result in multiple returns to society. Iceland has very positive experience of women's projects in Namibia and the Cape Verde Islands. Work will continue on fisheries projects in Malawi, Mozambique and Namibia. An official visit to some of the partner states in Southern Africa is in preparation.

Parallel to the strengthening of bilateral development co-operation, it is important to reinforce our participation in multilateral development work. In the past few months, attempts have been made to strengthen Iceland's position within the Food and Agriculture Organisation of the United Nations, FAO, and last year a permanent representative to the Organisation was appointed for the first time, residing in Paris. Various ideas are being discussed regarding increased co-operation with the United Nations Development Programme, UNDP, in order to make full use of opportunities to introduce Icelandic technical expertise.

The United Nations University Fisheries Programme has taken up operations. Close co-operation will be maintained between the Fisheries Programme, the Marine Research Institute, the University of Akureyri and the University of Iceland, and the first students will begin their studies next autumn. The school will be operated in a similar way as the United Nations Geothermal Training Programme.

The Foreign Ministry has now been responsible for the affairs of the World Bank for one and a half years. The World Bank is the largest development agency in the world, and provides loans, technical aid and consultancy in all areas of economic and social development. Increased economic growth is one of the main premises for progress in any country, and education and health care are examples of important areas where the World Bank makes substantial contributions to development.

In this context, Iceland's contribution to the reconstruction in Bosnia-Herzegovina also deserves mention. Here, Icelandic and Bosnian authorities have joined forces regarding the health sector with the support of the World Bank. Two projects are involved. The first involves assistance to war victims who have lost limbs below the knee and the second involves continuing education of physicians and nurses in the area of paediatrics, gynecology and maternal care. Both projects are based on Icelandic technical expertise, but the World Bank provides assistance in the monitoring and implementation of the projects. During my recent visit to Bosnia, I saw the result of the work which has already been achieved in the field of prosthetics.

Iceland has also supported the International Development Association to the same extent as other states. The IDA is the organ of the World Bank which provides aid to the poorest of the developing countries. Results from the Association's activities are growing, and it is a special pleasure to note that human resource development is now one of the keywords in its operations.

The co-operation of the Nordic countries within the World Bank is very close, and by taking a co-ordinated position, their influence within the bank is greater than the combined force of their vote. The views of the Nordic countries have been gaining increasing support in recent years, and the Bank therefore enjoys their solid support. An Icelandic Minister now, for the first time, has a seat on the Development Committee of the World Bank. This committee plays an important role and establishes the policy of the Bank in development affairs at any given time. Iceland holds the Chair on behalf of the Nordic and Baltic States, and in addition, Iceland will act as spokesman for the Nordic Countries at the annual meeting of the World Bank this autumn.

Mr. Speaker
Few countries in the world are as dependent on international relations as Iceland, and one of the most important premises for decent living conditions in this country is to pay due attention to foreign trade. As I said at the outset, the Foreign Service plays a key role in the effort to reinforce our position to the best of our ability in the global competition. This is pure preservation of interests, which has a direct impact on our entire population. It is my hope, therefore, that the debate today will reflect an understanding of the importance of foreign affairs.