H.E. MR MARTTI AHTISAARI,

PRESIDENT OF THE REPUBLIC OF FINLAND

IN KUWAIT CITY; March 10, 1996

I am pleased to present my greetings to the Chamber of Commerce of Kuwait through Mr Ole Norrback, Minister for European Affairs and Foreign Trade.

In Finland we would be happy to exchange the sunshine and warmth of Kuwait for our ice and snow. This would form an excellent basis for a continuous trade. Unfortunately it is difficult to arrange.

Relations between Finland and Kuwait have always been excellent. As we both are rather small nations on the global scale, it is usually easy for us to find a common interest in many questions. This solidarity among small nations was demonstrated also during the Iraqi occupation of Kuwait. Within the UN system we did our utmost to get justice for the Kuwaiti people. This work was realized in particular through our representation in the Security Council and in the Sanctions Committee.

I want to take this opportunity to confirm that we will remain loyal to the policy guidelines which were set at that time. The criteria for lifting sanctions are clearly spelled out in the relevant Security Council resolutions. Iraq must meet all its obligations before sanctions can be lifted. And here I want to underline the word "all".

The sanctions are not a means to punish Iraq or change its government. They are a means to make Iraq comply with the international obligations it incurred as a result of its war of aggression against Kuwait. It is clear that the sanctions have caused widespread human suffering in Iraq. But this is because the Iraqi leadership has willed it so. We have provided them a way to overcome this problem. For more than four years a UN mechanism for selling Iraqi oil for food and medicines for the Iraqi people has been on offer to the Iraqi leadership. Let us hope that the Iraqi leadership will now finally accept the offer in the interests of the Iraqi people.

Our economic relations have developed favourably. According to the trade statistics, those sectors, where Finland has internationally highly respected know-how, have succeeded well in the Kuwaiti market, where competition is very hard. Finnish enterprises have in particular contributed to the development of the infrastructure of Kuwait. They have for example constructed roads and embellished Kuwait City through the planning of many monumental buildings and areas, like the Ministry of Foreign Affairs and Safat Square. While users of the infrastructure do not often recognize the Finnish role in its construction, the Kuwaitis certainly are familiar with Finnish high technology. For example Finnish mobile phones are used every day to transmit enormous amounts of important information.

A special field for Finnish-Kuwaiti cooperation has been civil defence. During more than ten years experts have met under the Civil Defence Cooperation Accord. Their latest meeting took place in Helsinki last November. Further cooperation was agreed upon concerning inter alia training of experts and safety engineers in the oil and petrochemical industry and training of volunteers in fire fighting, first-aid and rescue.

I have brought with me an important industrial 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, tele- communications 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.

Later today an exhibition of Finnish industrial design will be opened in Kuwait. It shows how designers have affected our everyday life by producing beautiful utensils. Nowadays one can find in many Kuwaiti homes Finnish furniture and items of interior decoration.

During this state visit a notable new step in our economic relations has been taken. An Agreement on the Protection of Investments was signed today to secure and enhance investments in our two countries. An Agreement on the Avoidance of Double Taxation will also soon be ready for signing. An Agreement on Economic and Technological Cooperation exists since 1980. 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 substantiallyincreased. 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 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. We shall participate actively, for example, in the development of the cooperation with the 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 Kuwait.

While we on this occasion are concentrating on economic questions, it is worthwhile to remember that there have been contacts between Finland and Kuwait in many other fields, too. The oldest historical proofs of Finns' relations with Arabs are from 2000 years ago. Arabic gold coins of that era have been found in Inari Lake in Finnish Lapland.

Scientific research on the Middle East began in Finland, in the University of Turku, as long ago as the 17th century. Later, in 1840's, a Finnish orientalist, August Wallin, gained an international reputation for his travels in the Arabian Peninsula. He was the first European to write a scientific study on that region.

The latest example of the diversification of our relations is given by sports. Next week there will be in Kuwait a soccer match between our national teams. On this occasion I would like to invite you all to attend the match.

I want to thank the Chamber of Commerce of Kuwait for organizing this event, and wish you every success in your important work.