H.E. MR MARTTI AHTISAARI,

PRESIDENT OF THE REPUBLIC OF FINLAND

IN DUBAI; March 13, 1996

I would like to express my thanks to His Highness Sheikh Maktoum Al-Maktoum for this opportunity to make an official visit to Dubai, a flourishing Emirate. This visit gives me and my delegation an excellent possibility to see and marvel the results of a very fast development in all fields in the Emirates.

First impressions are often said to be decisive. I agree with this. Finland, so proud of the uniqueness of her nature, has found here in the United Arab Emirates a real oasis with warmhearted friends and hosts. The United Arab Emirates is a model for a balanced development and a model of a state creating stability in the Arabian Gulf region.

This Round Table event has been arranged to give both sides an opportunity present new views on the further enhancement of cooperation. I hope that these presentations and personal contacts will enable us to see new possibilities in a changed world, where the technological development and the globalization of markets have created new rules for economic activities.

I have brought with me an important industrial and economic delegation. Practically all main export clusters are represented here. In Finland the traditional forest industry has been replaced by metal and engineering as the largest industrial sector. This includes mining and metallurgy, energy, telecommunications and shipbuilding. The electronics industry is currently the fastest growing manufacturing sector in Finland. Industrial automation, transportation, telecommunications, consumer electronics and health care are the main sub-areas in the manufacture of systems and equipment. Rapid advances in our industrial know-how are reflected in our exports of high-tech products, which currently exceed corresponding imports. Over half of our industrial output is exported.

During my official visit to the United Arab Emirates a notable new step in our official economic relations has been taken. Two important agreements were signed. One was the Agreement on the Reciprocal Protection of Investments, which will secure and enhance investments in our two countries. The other was the Agreement on the Avoidance of Double Taxation. There exists also an Agreement on Economic, Industrial and Technical Cooperation, since 1982. These agreements provide a solid basis for our common economic affairs. The excellent political relations between our two countries have been concretized in the form of a treaty network.

Moreover the general business climate for investment in Finland is favourable. Practically all restrictions on foreign ownership have been abolished. Foreign citizens can freely invest in shares of Finnish companies, and purchase real estate in Finland. Foreign ownership of banks and insurance companies has been liberalized as well. A special office, called Invest in Finland Bureau, has been established to assist foreign companies in settling down in Finland.

Finland's geo-economic weight has during recent years substantially increased. Finland now lies at the heart of a new dynamic market area. In addition to the traditional Scandinavian markets to the west of Finland, consisting of Sweden, Norway and Denmark, almost totally unexploited markets have emerged in the immediate vicinity of Finland; to the east Northwest Russia and to the south the Baltic countries. In other words, Finland has now become the centre of - what we call - the New Northern European Marketplace consisting of more than 70 million consumers. Our long-standing integration into other Nordic economies, as well as our experience and connections with Russia and Baltic countries make Finland an ideal seat for companies operating in these markets.

Finland became a member of the European Union at the beginning of 1995. It was our greatest political decision since the Second World War. We Finns are a thoroughly European nation. For centuries, we have interacted with both West and East. Our democracy, legal system and culture are anchored in the Nordic tradition. Our economic system has always been based on a market economy, private ownership and the entrepreneurial spirit. Against this background, it was only natural that Finland wanted to join the Union that represents the same values.

The Finnish experience from the first 14 months of membership has been very positive. There have not been any major surprises and in all essential respects our expectations have been met. It is still too early to assess the long term effects on our economy, but it can be already stated now that some prices of consumer goods have declined and foreign investments in Finland have increased. An adjustment process in various sectors of the Finnish economy is still going on. It is particularly painful in the agricultural sector, but had to be faced sooner or later. By joining the EU Finland has assumed not only the rights but also the obligations of a member. In the trade policy field competence has, to an essential extent, been transferred from Helsinki to Brussels. At the same time Finland has become a Party to the existing arrangements between the EU and third countries or their organizations. As you know, we shall participate actively in the development of the cooperation with the Arabian Gulf Cooperation Council in the framework of the EU/GCC agreement of 1988.

Finland fully shares the view of the Union that the key word in describing EU-GCC energy, trade and investment relations is interdependence. Furthermore, we are convinced that for both the EU and the GCC, a free trade relationship would provide their economic operators a permanent framework for developing cross-investments, vertical integration and industrial alliances. I hope that further steps in this respect will be taken in the April Ministerial meeting in Luxemburg.

I want to underline, however, that membership of the EU does not replace our bilateral relations with third countries. It complements them by giving us new and useful instruments, also in our relations with the United Arab Emirates.

Turning back to our bilateral trade exchange, which has during recent years been around the level of USD 70 million, I note that this figure does not give the full picture of the importance of the United Arab Emirates in general and Dubai in particular to our trade flows. Dubai is the gateway for our products to the whole Gulf region - and even beyond.

There are about 900 international enterprises in the Jebel Ali Free Zone. Among them some of the largest Finnish companies have established their offices, not to talk about the Finnish business presence in Dubai itself. The new Middle-East Headquarters of our national oil company, NESTE, was officially opened yesterday here in Dubai. In fact the largest Finnish business conglomeration in the Arabian Gulf region is in the United Arab Emirates.

Not only our enterprises and products have found Dubai. Dubai is also a gateway to Finns themselves. The value of tourism industry is not negligible when the number of Finnish tourists annually visiting Dubai is approaching 10.000. Also tourism and other visits from the United Arab Emirates to Finland are steadily increasing. This is facilitated by direct flights of the Finnish national air carrier, Finnair, from Helsinki to Dubai. Helsinki is six hours flight time away from Dubai, closer than for example Paris or London.

I thank the Chamber of Commerce of Dubai for organizing this event and trust that this will give new impetus for creating a contact network, which will benefit both sides. We in Finland as well as our Embassy and Trade Centre will stay at your disposal.

Thank you.