First let me congratulate the City of Gdynia to the organizing of this important Forum and to the dedication of part of it to Scandinavia. I would like to give you an idea of how strong bilateral economic ties are between Poland and Sweden, how quickly they are developing and how great the future potential is.
But let me begin with the obvious – that our overall relations are not only excellent but have long traditions. I think that the broad Swedish support for democracy in Poland in the 70's and 80's is still well remembered, also in Gdynia and Gdansk, as well as Swedish political and economic support for Poland's way back to integration in Europe from the early 90's and onwards. At present there are some 70-80.000 Swedish citizens of Polish origin living in Sweden, well-established and respected for their contributions to Swedish society and economy – and to our bilateral relations of course.
Before I go into the details of our economic cooperation, I would like to say something more general about Sweden as a country on the Baltic Sea, and as a member of the Baltic Sea Region.
As I think you probably know, a new Swedish government is being formed these days on the basis of a new majority in the recent elections. It's a safe bet that it will not mean any major changes in foreign policy. The emphasis traditionally given to the Baltic Sea area will certainly remain.
This year Sweden is holding the presidency of the Council of the Baltic Sea States. At the summit in Reykjavik in June, the Swedish Prime Göran Persson recalled that at the very first summit ten years ago he presented a vision that the Baltic Sea region should emerge as the fasted growing area in Europe. That looked like a very long shot at the time. But today our region is indeed one of the most dynamic areas of the continent. Given what has happened in the past 10 years, the action program adopted by the region's chambers of commerce – to triple trade in the next ten years – does not look unrealistic at all.
Let me make one more observation on an important regional issue, namely the environment of the Baltic Sea. The fact is that the condition of the Baltic Sea is even worse than we previously thought. Its ecosystem now seems stuck in a new and negative state of equilibrium that might be very difficult to reverse. This issue is very high on our list of national priorities, and it concerns directly all those who live around the Baltic Sea, including Poland.
The many potential hazards to the ecology of the Baltic Sea are also the reason why any new large-scale project, for example the proposed North European Gas Pipeline, has to be examined on the basis of a careful and transparent environmental impact assessment. The project raises several issues of serious concern which need to be fully clarified. As for trying to restore the health of the Baltic Sea; a new HELCOM Action Plan is being prepared. Among other things, key features will be a more sustainable agriculture with a balanced fertilization, as well as effective waste-water treatment not only in all cities but also from all houses and farms not connected to urban systems.
Mr. Chairman, these remarks may seem somewhat away from the main theme for this conference - but they are not. For the frequent flyer between Poland and Sweden it is difficult to forget the images of algae blooming over the large tracts of the open sea. The obvious link is that over the longer term we cannot develop a prosperous economy that endangers our most important natural resource in the region.
Another link is also important – and more inspiring: by setting high environmental rules and requirements, we put pressure on research and on industry to develop cutting edge technology that increases our global competitiveness. In Sweden we have seen this over and over again: environmental regulations that in the short term could be seen as an economic burden on companies are also the driving force towards developing better and cleaner technologies, later demanded on the world market. In the long run, that pressure makes companies stronger and more competitive.
This dynamic interplay between regulation on the one hand and creativity and innovation on the other can create a virtuous circle that leads both to better environment and to more sustainable growth.
So: open, demanding, smart and innovative. That is the perspective from which I would now like to approach our bilateral economic ties.
A few basic facts: the Swedish economy is growing at around 4,5 per cent this year. It's not quite a Polish rate, but it is very impressive among the old EU members. Inflation is low – 1,8 per cent. How you measure unemployment has been a bone of contention in the recent elections, and figures vary between 6 and 10 per cent, some even say more. To increase employment, especially among younger people, will be the real test of the new government.
The Swedish economy is very open. When I went to school, we learnt that half of our industrial production was exported. Today exports represent almost half of the whole Swedish GDP! As a matter of fact, the development of Swedish exports have been extraordinary over a fifteen-year period, from the crisis in the early nineties, when they represented only 27 per cent of GDP to this year with around 50 per cent. A picture of this development would look like this. (Slide 1).
You can see the very strong development from 1995 and especially the strong growth of service exports. Now if you are unkind, you might ask whether the share of exports has grown so dramatically because overall economic growth has been sluggish. So maybe I should add that between 1995 and 2005 economic growth was 2,8 per cent in real terms.
Also Swedish-Polish trade has developed dynamically during the last decades, especially since the end of the 1990's and particularly after Poland's accession to the EU, as you can see from this slide:
Slide 2 – Development of Swedish-Polish trade since 1990 The increase was some 90 per cent in five years, from about 20 billion crowns in 2000 to 38 billion crowns from in 2005. And the trend is rising: based on the figures for the first six months, the growth of trade in both directions will be even stronger in 2006.
Slide 3 – Content of Sweden's import from Poland So, if we look closer at Sweden's imports from Poland, we find that they consist primarily of the following products: - Automotive parts - Machinery and equipment - Telecom equipment - Furniture Many of these products come from Swedish companies in Poland – thing like transport and telecom equipment etc.
Slide 4 – Content of Sweden's export to PolandAnd, if we take a closer look at Sweden's exports to Poland, we find that it consists primarily of the following products: - Machinery and equipment - Transport equipment - Chemicals - Paper - Iron and steel
Slide 5 - Trade in the Baltic Sea area in 2004 Now I shall show you a quite interesting picture, which among other things shows how underdeveloped our trade still is with Poland, if you compare it with what could be termed a 'normal' trade pattern. Compare the trade flows between Sweden and Denmark for example with the trade flow between Sweden and Poland. - Each yellow circle represents the total trade of a country.- The burgundy triangle represents that country's trade in the Baltic Sea area. - The pink arrow represents trade flow between two countries.
As you can see, Sweden trades with its neighbours like the other Scandinavian countries. Traditionally, Sweden also trades a lot with big countries like for example Germany, as you can see on the map, but also with Great Britain, the US or France.
When it comes to trade between Poland and Sweden, the flow is still quite small, as you can see, and a lot remains to be done… - But prospects are good! Poland has both of the two characteristics that create a good trading partner for Sweden. Firstly, it is a neighbour like the Scandinavian countries. And, secondly, Poland is a big country like Germany and Great Britain. And with Polish comparative advantages and growth prospects, it is difficult to see why this flow should not continue to be 'normalized' quite quickly.
Slide 6 – Swedish investment in Poland Now turning to the investment by Swedish companies in Poland: according to available statistics, they amount to about 3.7 billion USD since 1990, which puts Sweden as number seven among foreign investors in Poland. But the real figure is probably higher, since many of the investments that we Swedes consider to be Swedish - like for example ABB and IKEA -are presented as 'international' in the statistics.
Almost all big Swedish companies are present in Poland. Apart from those I mentioned, which we find all over Poland, we have: - Volvo in Wroclaw and Scania in Slupsk. - Electrolux has several plants in the South and South West of Poland. - Vattenfall has made huge investments in Warsaw and Gliwice. - Skanska and NCC are building roads all over Poland. - Bonnier is the owner of Puls Biznesu and Superexpres. - Ericsson is a big player on the telecom market, as is Tele 2- Nordea is a bank that is obviously Nordic but also Swedish and most Swedish banks are here.
I could go on naming companies, but I have to stop somewhere. Altogether there are between 700 and 800 Swedish companies, big and small, in Poland. There is a Swedish Business Club as part of the Scandinavian-Polish Chamber of Commerce in Warsaw as well as an official Trade Council, and there is also a Swedish-Polish Chamber of Commerce in in the Three-City area. All in all, more than 100 000 Poles are working in these companies, all over the country.
So I am convinced that Poland and Sweden can gain a lot from increased co operation - for example in the environmental field. Sweden has always had strong visions in this area. As I mentioned earlier, demanding regulations have resulted in a great number of successful companies, companies that have produced advanced, smart solutions, often small-scale and always cost-effective.
By way of illustration, let me end by giving you three examples of companies who are right now offering new solutions in Poland. Not surprisingly, they are from the environment and energy sectors. Much of Poland's energy production is generated from fossil fuels covered by EU directives like the Large Combustion Plants Directive. These plants now have to be up-graded to reduce emissions. A Swedish company called Mobotech, which is present here at the Forum, has developed a highly innovative technology which deals with the problem at the source, by reducing unwanted and harmful pollutants in the furnace - where the actual combustion occurs, instead of cleaning unwanted emissions after the combustion process. This solution is up to 75-80 percent cheaper than conventional techniques. And since the cost of up-grading Poland's more than 500 furnaces with conventional technique could be around or above 2,5 billion euros, this solution could save an awful lot of money. A second example comes from local or regional heating. Many Polish furnaces have a weakness in that they are limited as to the choice of fuel. In Chojnice, near the Tucholsky Park, the Swedish company Rindipol has built a new furnace for heating that can be fuelled with almost everything or anything that you can find in the nearby forests or on the nearby fields. So the fuel does not come in pipes from the Ukraine or from the bottom of the Baltic Sea, but from what the local farmers and forest owners produce. Building an oven or a furnace doesn't sound complicated or hi-tech, but making it into a system that operates easily and is reliable and cost-effective requires smart and advanced solutions. And it does work, in Poland as well as in Sweden. Next in line are two more furnaces in Kolobrzeg and Hajnówka.
A third example comes from Northern Poland, not far from here. The Swedish company Scania has unrivalled experience and expertise in this field. Since 1990 some 600 Scania ethanol buses have been delivered to Swedish cities, most of them to Stockholm, where there has been a remarkable environmental improvement during this period. The Scania engines have for several generations been ahead of rising EU regulatory demands. In about one month from now, the first Polish ethanol driven Scania bus will start running in nearby Slupsk, and of course, it has been produced by the local Scania factory in Slupsk.
Mr. Chairman,I hope that you forgive me for having made a bit of publicity for the kind of contributions that I think Swedish companies are good at making to the quantum economic leap that Poland is about to make in the coming years. I could mention many others, but time does not allow that.From what I have said I think it is obvious that trade and investment between the Nordic countries and Poland will continue to show strong growth, to the benefit of all involved. As Sweden's representative here, I know that I speak for the whole of my country, when I say that we wish Poland every success in this historically unique development period. Thank you.