H.E. MR MARTTI AHTISAARI,

PRESIDENT OF THE REPUBLIC OF FINLAND

IN ABU DHABI; March 12, 1996

I would like to express my warm thanks to His Highness, President Sheikh Zayed bin Sultan Al-Nahyan for this opportunity to make an official visit to the United Arab Emirates. It gives me and my delegation an excellent possibility to see and marvel the results of a fast development in all fields in the Emirates. The desert has been made to flourish in a very short time. My best congratulations for this achievement.

During this visit, which is the first official visit of a Nordic Head of State to the Arabian Gulf Cooperation Council countries, we have noted that the United Arab Emirates is a model for balanced development and a model of a state creating stability in the Arabian Gulf region.

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 In Finland the traditional forest industry has been replaced by metal and engineering as the largest industrial sector.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.

Yesterday two important agreements were signed between our two countries. An Agreement on the Reciprocal Protection of Investments and an Agreement on the Avoidance of Double Taxation. They will secure and enhance investments in our countries. Also 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 intothe 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. Our experience from the first 14 months of membership has been very positive. There has not been any major surprises and in all essential respects our expectations have been met.

By joining the EU 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 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 full picture of the importance of the United Arab Emirates to our trade flows. The United Arab Emirates is the gateway for our products to the whole Gulf region - and even beyond. Our trade exchange is now rising to a totally new level, due to four LNG-vessels ordered by Abu Dhabi Oil Company from Kvaerner Masa-Yards, Finland. The first ship has already been delivered and the rest will follow by the summer 1997. We hope that this cooperation continues also in the future.

Several other Finnish enterprises have established their offices in the United Arab Emirates and, as the matter of fact, the largest Finnish business conglomeration in the Arabian Gulf region is here. Finnish tourists have also found the United Arab Emirates and the number of annual visits is approaching 10.000. This is facilitated by FINNAIR nonstop flights, which take you in six hours from Helsinki to Dubai.

I thank the Chamber of Commerce of Abu Dhabi for organizing this event. I trust that it will assist in creating a contact network which will benefit both sides.

Thank you.