Norway is known for becoming one of the richest countries in the world after it discovered and started using its large oil deposits. Since the price for “black gold” is falling, the interview with the Ambassador of Norway to Ukraine Jon Elvedal FREDRIKSEN started with the question on how this global price drop affects the country’s economy and what it is associated there with.
“LIFE AFTER OIL”
“The press and politicians in Norway view the decrease of prices as market downturn. But we knew it would happen sooner or later and believed that the recent high oil prices were not there forever. Another thing is that it will seriously affect our economy.”
And it is affecting it now, the Norwegian krone exchange rate dropped by 20 percent.
“Precisely. And this is quite serious for our economy. I cannot say there is a crisis in Norway, since our economy is strong enough and is not based purely on oil and gas, but on other industries as well. But of course, we do not conceal the fact that this situation has activated discussions in Norway on how we are to live after oil.”
In a Bloomberg article it is called “an emergency” and your Prime Minister Erna Solberg is quoted as saying: “We are going to remain an oil country, but we need to create a new version of Norway, because the version we have been living for the past 35 years, becomes outdated.”
“I think the situation we are observing now will have a serious impact on innovations in other industries, marine in particular, second largest after the oil one. Everyone understands that there is a great potential of technological development.”
In other words, you are talking about innovation economics?
“Yes, innovation economics has always been a part of our agenda. According to the OECD data, one of the main advantages of Norwegian economy in the past few years has been an ability to promptly shift to a new development. This lets us think that our economy is stable. That is why there is no feeling of crisis in Norway now, even though it would be dishonest to say that the drop in oil prices does not affect our economy and cannot affect the well-being of Norwegians with time.”
“WE PLAN TO INCREASE AID TO UKRAINE TO NEARLY 300 MILLION KRONES IN 2015”
Since oil revenues will decrease, and they make up 20 percent of the total budget revenue, a question arises: will this affect the volumes of international programs?
“As of now, it will not. I haven’t heard that such discussions were present at the parliament. I want to say that a consensus exists in our parliament for many years, according to which Norway has to allocate 1 percent of its GDP to help poor countries. Nothing has changed so far, and Ukraine is one of the recipients of Norwegian aid.”
Can you say what exactly aid our country has received or will receive?
“We have been constantly increasing the amount. Until 2013, we allocated about 40 million Norwegian krones (5.9 million dollars) for various projects in Ukraine annually. In 2014, after Maidan, we increased this aid to 200 million Norwegian krones (29.5 million dollars). And in 2015, we plan to increase aid to Ukraine to almost 300 million krones (44.2 million dollars). By the way, this does not include humanitarian aid, which will be supplied additionally.”
“UKRAINIAN MARKET HAS ALWAYS BEEN COMPLICATED FOR INVESTORS”
When commenting on the situation in Donbas, your prime minister said in an interview to a Ukrainian periodical, which was printed on November 21: “It is hard to understand Russia’s real intentions.” And can you say now whether Norway understood Russia’s real intentions?
“Our government has stated many times that Russia bears great responsibility for the situation in eastern Ukraine. Of course, the annexation of Crimea is a violation of international law for us. We joined all of the EU’s sanctions against Russia because of the annexation of Crimea.
“Russia applied retaliatory sanctions against Norway, which have affected a lot of enterprises that did business in Russia, and virtually stopped the supply of Norwegian seafood. Prior to that, Russia has been the largest market for Norwegian fish.”
And perhaps, fish is now transported to Russia through Belarus?
“It is true, the export of our fish to Belarus increased significantly. But you need to ask Belarus, where it is transported next.
“I can also say that our exporters are intensely observing Ukrainian market. We have always exported quite a lot of fish to Ukraine. Your country has ranked 9th in this respect. And as for pelagic fish, it has been the third largest market for us. But now opportunities to increase export to Ukrainian market appeared. We understand this should not be a unilateral process. That is why during our prime minister’s visit we agreed that we would invite representatives of Ukraine’s agricultural branch to Norway, so they could receive an opportunity to supply their goods to the Norwegian market.”
Are any specific goods implied?
“Our agricultural market is rather complex. There are quite high duty ‘walls’ around our market. But there are opportunities which, as we see, are not used by Ukrainian exporters. And we are ready to assist them here.
“It applies to a rather wide range of vegetables, fruit, grains, oil and so on. Our Ministry of Fisheries is interested in creating framework conditions for developing the fishing industry in Ukraine jointly with the Ukrainian government. I hope this will allow to attract investments. They should start with creating framework conditions.”
Do you see willingness on Ukraine’s part to create them?
“There is willingness. But I will frankly say that the Ukrainian market has always been complicated for Norwegian investors and is no less complicated in the given situation. However, political risk is one thing, and the general risk is related to a situation when it is hard to obtain credits in order to make investments. And there is the main issue: corruption, which has always tarnished Ukraine’s reputation. I think everyone understands there is a desire to change that now, but we are waiting for it, as well as for specific results.”
ON RE-EXPORT OF FISH AND IMPORT OF LIQUEFIED GAS
Your predecessor Olav Berstad wrote an article for us, saying that Ukraine could use Norwegian fish as gas, by purchasing it and processing at Ukrainian enterprises, and then, respectively, exporting ready goods to other countries. Do you see any interest from Ukraine in this opportunity to make money?
“I think that such an idea should be developed further, because in the current situation we also see that Norwegian fish is exported to China. It is processed there and sent back to European markets. Why shouldn’t Ukrainian enterprises, which will receive Norwegian investments in time, use the opportunities of processing Norwegian fish with its further export to Europe? Moreover, the agreement between Ukraine and the EU increases opportunities for re-export.”
Last year, agreements on supplies of Norwegian gas to Ukraine through Slovakia were reached by Ukraine and Norway. How are they being implemented?
“Indeed, Norway’s Statoil agreed with Naftohaz that they have to supply up to 0.5 billion cubic meters of gas per month during half a year. The flow is coming. This is a purely commercial offer between the two companies. And I think this is an example of Ukraine receiving gas or other energy resources on commercial terms, without political terms and supplier’s demands.”
Is Norway interested in researching and extracting energy resources near Zmiiny Island?
“I know that there have been Norwegian enterprises before that started viewing opportunities of oil and gas extraction on the Black Sea shelf. All this must be reviewed after the annexation of Crimea. There are contacts between Norwegian and Ukrainian enterprises on supplies of liquefied gas via the Black Sea. Also, both parties are interested in repeating the Odesa project, which was implemented in Lithuania last year. I think it is commercially viable, yet it depends not on Norway, but on the possibility of shipping liquefied gas through the Bosporus.”
“UKRAINE NEEDS AN OPPORTUNITY TO PASS OBJECTIVE INFORMATION TO THE GLOBAL COMMUNITY”
Everyone saw the multimillion unity march with the participation of almost half a hundred of world leaders in Paris, where 17 people died as a result of individual terrorist attacks. And 5,000 people have died since the beginning of Russia’s aggression in eastern Ukraine. However, the EU countries did not show a similar reaction (I mean such marches etc.) to that. What is the explanation for such different reactions, considering the fact that our country has become an object of attacks by a terrorist state?
“Terrorism, which is related to extremist Islam, has long been a hot topic in all European states. I think this is the reason for such a response. And these terrorists attacked the press, the freedom of speech. This is a very symbolic terrorist attack. I think that such reaction shows how the population in Western countries positions their attitude towards the freedom of speech. They think in the following way: I believe that my newspaper should write what it wants, print whatever cartoons it wants. That is why such terrorism is a specific threat for Europeans.
“As for the events in your country. Reaction in Europe in general is related to the fact that for many the conflict in Ukraine is unclear. And information about this conflict in Europe has been incomplete. Of course, there were a lot of messages during the spring and summer, especially at the end of August, but it has grown quieter since then.
“I see that the Norwegian press constantly informs that four to five thousand people have died in the conflict. It also says that shootings take place constantly, despite the ceasefire agreement. And these messages are repeated every week in Norwegian newspapers. But still, for many Europeans, including Norwegians, Ukraine in considered to be mentally remote, and France is much closer in this sense. The conflict in Ukraine deserves greater attention.”
Will this be promoted by the creation of a special European Russian-speaking TV channel, which was immediately opposed by Russia, which said it is a violation of the freedom of speech?
“I do not see a direct connection here. I think that such a channel will be created if there is available funding. I think that Ukraine needs an opportunity to pass objective information to the global community through such a channel. It is not about counter-propaganda, because propaganda should not be the response to propaganda. Objective information should be the answer, and what should be better done in Ukraine must also be covered. Only this will help your country.”
