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Ministry for Foreign Affairs

Small Island Developing States

Dr. Gunnar Pálsson, Ambassador-designate of Iceland to Mauritius attends on behalf of the Icelandic Foreign Ministry the conference “Doing Business 2009, Small Islands Developing States, Report Launch Workshop”. The conference is organized by the World Bank and the government of Mauritius and held at Port Louis, Mauritius 11-13 of November 2008. The World Bank report on the Business environment of Small Islands Developing States was presented. The Icelandic Foreign Ministry financially supported the making of the report as a part of the “Small Island Growth Initiative”, Iceland´s development cooperation policy with Small Island Developing States (SIDS).

Following is the Ambassador´s address at the opening of the conference.








Vice-Prime Minister Sithanen, distinguish guest, ladies and gentlemen,

Allow me to thank our host, the Government of Mauritius, and the World Bank for their generous hospitality in organizing this timely event – and for doing so in such spectacular surroundings.

I am indeed honoured to have the chance to highlight briefly why the Government of Iceland attaches such importance to the Doing Business 2009 Small Island Developing States (SIDS) Report. But let me first use this opportunity to compliment our host, already one of the world’s most business-friendly countries, for showing the way through the application of Doing Business indicators in its ongoing reform effort.

A few years ago, some discerning colleagues at the Icelandic Foreign Ministry discovered that a number of countries, including our own, were not included in the Doing Business Report. They also found that the number of Small Island Developing States among the countries listed was disproportionately limited. To remedy this shortcoming, the Government of Iceland decided to earmark funds in the amount of 700.000 USD to extend the Report to twenty more Small Island Developing States.

At the time, the Doing Business Report had already established it self as a reputed and authoritative publication, highlighting through benchmarking, the ease of doing business in individual countries. The Report was seen to provide an objective context allowing laymen and professionals alike to compare government regulations that enhanced – or, as the case may be, constrained - business activity in some 178 countries.

Iceland’s decision to finance a special publication of the Doing Business Report last year, called Doing Business in SIDS, was, in our view, a logical next step. The Doing Business in 2008 SIDS Report, the first of its kind, was presented on 26 March 2008 in Bridgetown, Barbados, at a High-Level Roundtable on International Cooperation for Sustainable Development in Caribbean SIDS. The response to the report was highly encouraging and I would like to express my Government’s deep appreciation to the World Bank Doing Business team for taking matters in hand and developing the concept even further. Iceland’s interest in supporting a special SIDS publication has been part of a broader effort by my Government to strengthen development cooperation with fellow island states. In the past few years, Iceland’s development policy has increasingly given precedence to SIDS, as evidenced by our Island Growth Initiative and SIDS Fund.

The justification need not be looked for far afield. As a fellow small island nation, Iceland is endowed with similar features and shares many of the same challenges as the SIDS. These include small populations, limited resources, remoteness, susceptibility to natural disasters, vulnerability to external shocks, disproportional dependence on international trade, high transportation and communication cost as well as limited opportunity for creating economies of scale. As Iceland’s Foreign Minister, Ingibjörg Sólrún Gísladóttir, observed in Bridgetown earlier this year: (Quote) ‘As small states we have much in common, and much to gain by working together.’

It is my sincere hope that the Doing Business in SIDS Report will help us address some of these unique, but at the same time common challenges. The report should have considerable potential as a catalyst of reform and may prove to be a useful tool for overcoming regulatory obstacles, as well as in reducing cost of doing business in SIDS.

Finally, I would be remiss if I did not briefly touch upon the ongoing global financial storm which could have – and may already be having – severe repercussions for small island states. As you are no doubt aware, Iceland was among the first states to be seriously hit, as the country’s main commercial banks, accounting for around 85% of its banking system, collapsed. However, my point in mentioning this rather inauspicious state of affairs is not so much to solicit commiseration as to point out that the recent turmoil in world financial markets may also holds lessons for small island states. As they tend by their very nature to be more vulnerable to the vagaries of the global financial system, small island states are usually more dependent on international cooperation. From this point of view also, the timing of Doing Business in SIDS would seem to be particularly apt.

In a recent speech, the President of Iceland, Mr. Ólafur Ragnar Grímsson, referred to the theme of small states and the international financial crises when he observed: (Quote) ‘While small nations certainly need to tackle a variety of problems, they also have many important assets. In the current global financial hurricane, Iceland and others have been reminded...... that when a hurricane passes over the ocean towards powerful mainlands it usually first crosses small islands where the destruction can be substantial. However, experience also shows that small states, due to their flexibility and the closely knit networks of cooperation which characterize their societies, can recover surprisingly quickly.’(Unquote)

On this optimistic note I would like to conclude and wish you every success with Doing Business in 2009.

Thank you.


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