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Nordic diplomacy: promoting Latvian socio-economic development

Eugene Eteris, European Studies Faculty, RSU, BC International Editor, Copenhagen, 04.11.2016.Print version
Contemporary diplomatic services are being split into several “sectors”: economic, cultural, popular, etc. However, as everything in life, diplomacy is subject to modern challenges. The BC looks into four Nordic embassies’ functions in Latvia –Danish, Swedish, Finnish and Norwegian -- to find out how they promote Nordic-Latvian relations and provide assistance to Latvian socio-economic development.

As a general denominator, could suggest, embassies’ roles have not changed sufficiently since the adoption of Vienna Convention on Diplomatic Relations in 1961 (in force since April 1964). Moderate functions’ description adopted more than 60 years ago definitely apply in full to modern diplomacy (see Box 1 below).

 

However, some “adaptive sings” can be depicted through contemporary international relations challenging traditional diplomacy: for example, digital services, reduction in staff (though not in efficiency), increasing commercial, cultural and security functions, to name a few.   


Numerous global and European challenges and socio-economic factors undoubtedly “re-direct” traditional diplomacy instigated by public attention to modern diplomacy as an important factor in international relations around the Baltic Sea Area.   

 

Box 1: Vienna Convention on Diplomatic Relations (extract)

Vienna Convention on Diplomatic Relations describes the functions of a diplomatic mission, inter alia, in protecting in the receiving State the interests of the sending State; negotiating with the Government of the receiving State; promoting friendly relations between the sending State and the receiving State, and developing their economic, cultural and scientific relations. (art. 3)

 

Main ambassadors’ role


According to the Norwegian Ambassador in Latvia, Steinar Egil Hagen strengthening bilateral relations between Latvia and Norway is the main aim of the embassy’s presence. The spheres of activity are mainly spread among the following functions: European and EU issues, regional security, strengthening commercial relations and developing cultural relations as well as people-to-people contacts. “Promoting Nordic-Baltic cooperation is a priority for us all”, he added.   


Danish Ambassador, Hans Brask slightly changes “the accents” underlining four main spheres: political relations between Denmark and Latvia; promoting trade and facilitating investment; public diplomacy (through promotion of Nordic values) and, finally, consular and military assistance. Probably, the Danish embassy work is “more complicated”: it works on behalf of the whole Kingdom, including Greenland and Faroe Islands.  

 

It seems more “practical”, as to embassies’ existence in future, has been the Ambassador of Finland to Latvia, Olli Kantanen (a carrier diplomat in the service since early 1990s and a political science graduate) who said (smiling!): “during past decades some of the EU finance ministers even conducted serious discussion if bilateral embassies between EU member states are still needed? So, of course one can do without, but it’s not something that for example Finland would opt for the countries around the Baltic Sea”. And he added: “here in the embassy we are just a mini-Finnish government in Latvia”. He underlined that ambassador’s functions “rotate” around three priorities: political contacts, business promotion (through “Team Finland”), public diplomacy/cultural cooperation. However, he added, “all three are important: it depends when and how, so-to-say, time tells”. It’s hard to contradict…

 

Ambassador of Sweden to Latvia, Henrik Landerholm sounded both generic (to him “there is no division of influence”) and more precise: political diplomacy -50 per cent, economic and cultural diplomacy -40 per cent, and consular assistance -10 per cent.

 


The Ambassador of Norwegia to Latvia, Steinar Egil Hagen

“Transposing” Nordic image in the Baltics 


The Nordic Embassies (four of them are revealed as Iceland doesn’t have a resident ambassador in Latvia) as “the extension” of corresponding foreign affairs ministries are equipped with the same main aim - promoting the Nordic states’ interest in Latvia. Therefore the embassies facilitate contacts at political level between the Nordic authorities and Latvia, promote interaction and networking among the Nordic and Baltic/Latvian societies; promoting Nordic business interests in Latvia and assisting companies in their connections with the Baltic/Latvian counterparts. 

 

The embassies have been supporting Baltic/Latvian membership in the EU, their adaptation to the EU integration and development, intensifying cooperation among Nordic and Baltic States (e.g. within NB-8 format) and further supporting the development of democracy, human rights and good governance.

 

Nordic embassies assist in language training, development of border control system in accordance with the EU standards, water sewage development and the establishment of the corruption prevention and control systems.


It should also be mentioned that Denmark has in Riga a cultural institute, with which the embassy works very close on cultural exchange, media and people-to-people contacts.

The embassies promote the knowledge of Nordic culture in the Baltics and Latvia and support in numerous ways cultural exchange, information and connections between the civil societies.


Embassies’ consular services can provide citizens of Baltic States/Latvia with advice and  assistance as regards for example, contacts with relevant Nordic authorities.

 

The staff of Nordic embassies in Latvia is rather small: e.g. 1 diplomat and 6 civil servants in Danish embassy (incl. 4 administrative & technical staff, and 2 interns), 2 diplomats and 8 administrative and supporting staff in the Finnish embassy; to 2 diplomats and 6 locally employed staff in the Norwegian, to 6 diplomats and 9 locally hired persons in the Swedish embassy.

 

Economic diplomacy


Norwegian Ambassador, Steinar Egil Hagen underlined that “over the years Norway and Latvia have built strong economic relationships: being both the fifth largest foreign investor and taking part in various Latvian economic sectors’ development”. According to Latvian Central Bank’s data for 2015, Sweden’s FDI in LV accounted for €2,6 bln, while Norwegian was €736 mln, Danish - €600 and Finish - €400 ml.

See statistical database/Latvian Bank: https://statdb.bank.lv/lb/Default.aspx.

 

Norwegian “sectors of interest” include financial services (one of the biggest Latvian banks DnB has Norwegian ownership), real estate, retail/wholesale trade (e.g. ORIGO-chain is Norwegian owned), and several companies producing various other products.

 

Much credit shall be given to the Norwegian and Swedish Chambers of Commerce in Latvia (NCCL and SCCL), added the ambassadors: “the Chambers function as a strong voice on behalf of the Swedish and Norwegian business community”. Therefore in economic diplomacy the NCCL and SCCL are two of the closest cooperation partners for Sweden and Norway.


For the Swedish Embassy, the Business Sweden (the Swedish Trade and Invest Council) office in Riga is also one of the most important cooperation partners.

 

According to the Latvian statistics, Sweden being the largest foreign investor in the country; i.e. Swedish substantial involvement in the Latvian socio-economic development includes: financial sector (e.g. Swedbank and SEB), communication (Telia Company has 49% share in LMT and 49% in Lattelecom), forestry (being the largest foreign investor in forest resources), and retail trade (e.g. RIMI-chain).

 

Besides, about 300-400 SMEs from each of the four Nordic states are already registered in Latvia; for example, there are about 800 companies with Swedish capital registered in Latvia (see: https://www.lursoft.lv/lursoft-statistika/). They all make a substantial share of added value to the country’s economic growth.

 


The Ambassador of Denmark to Latvia, Hans Brask

Box 2: Nordic countries in the EU


Sweden with the largest population among the Nordic countries (over 9 million) is the third-largest country in the EU by territory – 438 574 km2. Gross domestic product - € 444.2 billion.  

Breakdown of Sweden's finances with the EU in 2014:

·         Total EU spending in Sweden: € 1.691 billion, which is about 0,38% of Swedish gross national income (GNI);

·         Total Swedish contribution to the EU budget is about € 3,8 billion (0,86% of its GNI).  

See: http://europa.eu/european-union/about-eu/countries/member-countries/sweden_en

 

Denmark is the smallest Scandinavian state (with the size of about 43 thousand km²) and population of about 5,7 mln (2015). Gross domestic product – about € 266.2 billion.

Breakdown of Denmark's finances with the EU in 2014: 

·         Total EU spending in Denmark: € 1.5 billion, which is 0,57% of Danish gross national income (GNI);

·         Total Danish contribution to the EU budget - € 2, 2 billion (with 0,84% of the EU budget).  

See: http://europa.eu/european-union/about-eu/countries/member-countries/denmark_en

 

Finland is one of the five Nordic countries with 338 440 km2 and population of about 5,5 mln (2015). Gross domestic product (GDP) is about € 207 billion (2015).

Breakdown of Finland’s finances with the EU in 2014:

·         Total EU spending in Finland is about € 1 billion, which is 0,52% of Finnish gross national income (GNI);

·         Total Finnish contribution to the EU budget is about € 1.8 billion (with 0,87% of the EU budget).  

https://europa.eu/european-union/about-eu/countries/member-countries/finland_en.

 

Although Norway is not a member of the EU, they enjoy good and close relations. Country’s area is 385 155 km2, population of about 5,1mln and GDP of $345,2 bln with GDP per capita of over $67 thousand.   http://www.heritage.org/index/country/norway

 

Through the EEA Agreement (entered into force in 1994), the three EEA/EFTA states Norway, Iceland and Liechtenstein are equal partners in the EU internal market, on the same terms as all other EU member states. This includes having access to the internal market’s four freedoms: the free movement of goods, persons, services and capital. Since 2001 Norway is also part of the Schengen Agreement and cooperates with the EU on foreign and security policy issues.

 

In fact, over 80% of Norwegian exports go to the EU, and more than 60% of imports come from EU countries.


The Agreement also covers cooperation in other important areas such as research and development, education, social policy, the environment, consumer protection, tourism and culture. It also enables the three EEA EFTA states to participate in various EU programmes.

More information about the areas in which Norway and the EU cooperate, see on:

www.eu-norway.org.

 

Norway’s financial contribution to the EU is aimed at reduce social and economic disparities in the European Economic Area. Thus, the EEA EFTA States Iceland, Liechtenstein and Norway have contributed to European cohesion efforts through various financial mechanisms. For the period 2014-21, Norway’s annual contribution to 15 beneficiary states through the current EEA and Norway Grants scheme will be €391 mln.

 

Norway participates in a number of EU programmes through provisions in the EEA Agreement or on the basis of bilateral agreements with the EU. The largest are the Horizon 2020, Erasmus+, Galileo and Copernicus. Norway and other EEA partners contribute to the budget of these programmes: for 2014-20, Norway’s average annual commitment is 447 mln.

 

Norway’s cooperation with the EU in the field of justice and home affairs, includes participation in the Schengen cooperation and agreements on cooperation in other areas: the annual financial contribution in 2015 was about 6 mln.

 

In addition, for the period 2014-20, Norway contributes around €25 mln annually for programmes under the European Territorial Cooperation INTERREG.


It has to be mentioned that although Norway’s grants are important and is a great thing but Denmark, Finland and Sweden provide greater helps and assistance through numerous EU structural funds.


The Ambassador of Finland to Latvia, Olli Kantanen

Military diplomacy & security


It seems that after Ukrainian crisis in 2014, European security issues have acquired new dimensions. Diplomatic involvement is seen in numerous spheres dealing, for example with the recent NATO efforts to assist in collective defence planning in the Baltics.  

 

Following a decision at the Wales NATO Summit (September 2014), Allied forces established six NATO Force Integration Units (NFIUs) in the Eastern European states, including three Baltic States – Estonia, Latvia and Lithuania. This NATO’s “readiness action plan” is the biggest reinforcement of Western collective defence since the end of Cold War. Thus, in November 2015, for the first time a permanent NATO Forces Integration Unit headquarters, NFIU has been located in Latvia.    

 

Presently 9 NATO states are represented in the NFIU Latvia, including Norwegian military officers. Norwegian and Latvian armed forces have a long history of cooperation, including close cooperation in Afghanistan. Regarding the Enhanced Forward Presence agreed at the NATO summit in Warsaw, Denmark will participate in Estonia and Norway in Lithuania.


It has to be added, Hans Brask said that Denmark is - and traditionally has been - the most active Baltic partner in terms of defence cooperation and joint exercises (being present in NFIU too).

 

Although two Nordic states, i.e. Finland and Sweden pursue non-alignment policy, at the same time they play an active role in European and Baltic security cooperation.

 

For example, argued ambassador of Finland to Latvia, Olli Kantanen, even while Finland was not a NATO member, the country took part in the so-called NATO Response Force and Partnership for Peace program (in which both Sweden & Finland are members from May 1994), and in the EU Battle-group. Finland and Sweden have also entered “a host-nation support” status allowing assistance from NATO troops in emergency situations.

 

Military “mission” is closely connected to entrepreneurship: for example, recent NFIU’s Riga conference (22.09.2016) analysed NFIU mission’s tasks, ongoing activities and security challenges in the region and the opportunities for cooperation with the business community.


Danish Ambassador to Latvia, Hans Brask reminded that “Danish defence industry could offer a lot to Latvian partners: systems supplies and niche-technology products, sensor and control components, military logistics and mobile ground stations, to name a few”. Headed by the Danish Defence & Security Industries Association (FAD), several other companies take part in defence cooperation: Beatronic Supply, Ebicon, Rohde & Schwarz, SANMilitary, Weibel Scientific, Flatirons, etc.    

 

The European efforts are aimed at closer links between security and business: the June 2016 EU Global Strategy calls for an integrated approach to tackle conflicts and crises and for investing in the resilience of states and societies to the European East.


Norwegian Ambassador Steinar Egil Hagen informed that the Norwegian government is elaborating a White Paper on Norway’s foreign and security policy. The main lines of this policy will remain unchanged, as for example membership in NATO. Nevertheless, the ambassador added, we need to adapt to a rapidly changing world and set the priorities and make some crucial policy choices. Through NATO membership Norway is committed to contributing to the defence of the Baltic States in time of crisis, the military forces have been participating several times in Latvia for joint training and exercises. Norwegian Air Force has participated in air-policing of the Baltic States; Norwegian officers are present in NATO Forces Integration Unit in Riga and Norway will contribute to the NATO enhanced forward presence in Lithuania. Norway has in fact a long history of military cooperation with Latvia dating back to common operations in Afghanistan.

 


The Ambassador of Sweden to Latvia, Henrik Landerholm

Changing roles & perspectives


However unified and stable, diplomatic work is subject to global challenges; one of it is ICT and digitalisation. The Nordic ambassadors are unanimous: it affects their work in many ways; hence, the embassies are widely using facebook- and twitter-networks.  Ambassador of Finland to Latvia, Olli Kantanen mentioned that “it gives additional dimension in our work and the change has been rapid: for example, it was only less than 20 years ago mobile phones and sms-messaging entered diplomacy and made communications easier”.

 

The Norwegian ambassador Steinar Egil Hagen also emphasized that technological developments, ICT and social networks make embassies’ work differently than before. However personal contacts and face-to-face dialogue with key people are still an essential part of ambassadors’ work.

 

Ambassador of Sweden to Latvia, Henrik Landerholm added that “ICT makes our work not only more transparent; when information is storming in, the analytical skills are needed. This is what gives our work additional value”.

 

No doubt, the perspectives are full of additional tasks, competences and obligations...

 

Promoting European values is also becoming an important part of modern diplomacy. As is known, the Union is founded “…on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities”. These values are common to all EU states, in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail (art. 2 TEU). Therefore, the Nordic ambassadors “deliver” on the ways the practical implementation of these values shall occur in the Baltics. 

 

For example, the Baltic States can emulate a number of Nordic states’ positive development: flexicurity, lack of corruption, optimal structural reforms, just to name a few. Besides, still “face-to-face” connections between the Nordic ambassadors and Baltic States representatives are more important (and quicker) than other red-tape facilities.


Then, the “pushing ahead” effect is vital too: e.g. in Rail Baltics project, argued Danish Ambassador, Hans Brask the Baltic States can avoid some inherent obstacles in construction: Denmark has acquired solid experience in cross-countries’ transportation. Suffice it to mention the Danish-Swedish rail-road transport connection.     

 

Ambassador of Finland to Latvia, Olli Kantanen argued that leaving aside all possible changes in the embassies’ work, this “institution will stay. “It is direct cooperation with all the nuances, which is important”, he added.

 

Thus, the main spheres of diplomatic activity will be spread among the following functions: promotion of friendly by-lateral relations (so-called public diplomacy), European issues, security (so-called military diplomacy), commercial relations (commercial diplomacy) and developing cultural relations (cultural diplomacy).

 

 






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