Banking crisis not a possibility in Iceland now, envoy tells Tribune

India and Sweden will co-host the India-Nordic Summit in Stockholm on Tuesday which will see participation of Narendra Modi and Prime Ministers of all Nordic countries--Denmark, Finland, Iceland, Norway and Sweden.

On the sidelines, Prime Minister Modi will also have separate bilateral meetings with counterparts from Denmark, Finland, Iceland and Norway. Ahead of the summit, Iceland’s Ambassador to India Thorir Ibsen spoke to Smita Sharma about the significance of the summit meeting, the big-ticket items, including climate change cooperation and green and clean technology transfer possibilities multilaterally with the group and bilaterally with Iceland.

The envoy says that shooting the song ‘Gerua’ in the film ‘Dilwale’ in the scenic Icelandic landscapes impacted ties positively and Bollywood productions increased there. Iceland wants a serious reform of the United Nations Security Council with India on the high table. Iceland that suffered a national banking crisis a decade ago also has words of advice for India which finds banking frauds making constant headlines. Accept advice from abroad and punish the guilty, says envoy Ibsen. Here’s the exclusive Interview with The Tribune.

How important is this first India-Nordic summit? What are the takeaways expected?

What is significant about this meeting is that the Indian Prime Minister has taken the initiative to meet all Nordic PMs at the same time. This is a great opportunity for all PMs to meet together for the first as I recall. There has always been a good political, trade and investment relations between Nordic countries and India. But these relations need to be deepened. Trade has to be further increased. Lots of opportunity there in areas of innovation, digital transformation and generating growth and jobs by increasing trade.

What are the big-ticket items on the Summit agenda?

Innovation, growth, jobs and trade is one. Security issues, including contemporary ones that we are dealing with. Third, climate change and empowerment of women.

With Trump’s opposition to the climate change pact, what kind of role do you think India can play on the issue?

India was a key player in conclusion of the summit in Paris. India is a huge economy and huge player internationally. India has been showing leadership with couple of initiatives like the solar alliance. India has announced substantial increase in renewable energy up to 175 GW by 2022. These are substantial contributions from India. On climate change, the Nordic countries and India see eye to eye. We all are strong supporters of Paris Agreement and Nordic countries are champions when it comes to renewable energy. President Trump has never said that he doesn’t want to do anything about climate change. He doesn’t like the Paris Agreement.

But lots of cooperation still takes place between Nordic and European countries and US on climate change-related issues. There are consultations; private sector is working on technology. NGOs are active, not as if the clock has stopped. But we would want the US administration evidently to be more forthcoming on climate change.  

In bilateral talks with Iceland, what is going to be the key area?

This is a bilateral talk taking place in context of the multilateral Nordic summit meet with Indian PM. So not the same as giving bilateral talks in Icleand’s capital. What the PM of Iceland will be emphasising with PM Modi will be increased trade,  geo-thermal and renewable energy, climate change and research and what we can do for cooperation in gender equality and empowerment of women and entrepreneurial sectors.

With India’s special relation with Moscow and DC, will the current state of tensions between US and Europe versus Russia be discussed?

Not so far. You are dealing with a situation that is evolving and changing every minute. This summit was decided a long time before the events taking place now. However, if something happens now Prime Ministers will not be able to ignore what is going on. But nothing for the time being.

Iceland was one of the first countries supporting India’s aspiration for a Security Council seat. How do you view the progress speed?

We have been, like many other countries, disappointed with the process and the pace of reforms of the UN and Security Council. We rely on a strong United Nations and well functioning Security Council. We are of the view that the Security Council must reflect the current historical realities. Our position vis a vis India is based both on friendship because we trust India and also in recognition that in a changed world India should be at the table. Our support for India in UNSC is there. We are engaged in negotiations in New York like all other member states but the resistance does not come from us.

How is Iceland’s financial health today some years after the last major crisis?

Iceland’s financial crisis was an unfortunate situation. All that has been explained and presented in the media. There were culprits that were brought to justice and many bankers are now in jail or in probation. The economy is back, the financial sector has been reformed. You do not reform everything overnight. There are some things we still want to fine-tune. We are now experiencing 4.6 per cent economic growth. We have to be careful to ensure it does not get overheated. But a banking crisis is not a possibility in Iceland now.

With ongoing frauds in public sector banks in India, can it learn something from Iceland’s experience?

Things can happen to economies. Accept advice from abroad. We had a national crisis, we accepted the advice of the IMF because we realised that we needed to have an external view on what went wrong. If we were analysing ourselves it would not be good. You need someone from the outside to tell you what is wrong in the household, then you can move on. Make those responsible accountable.

How have the India-Iceland relations changed in past four years?

I see a significant change. We share values like democracy, human rights, peaceful resolution of conflicts, climate change and work together. But the relationship we are cultivating in Delhi are business and commercial relations. On people-to-people side we have had a 50 per cent yearly increase over the past four years of tourists visiting Iceland. Of the 2 million tourists we receive annually, we now have around 20,000-25000 Indian tourists. We are hoping for a direct flight between India and Iceland soon. Bollywood has been looking towards us favourably. We are having popular productions from India every year considering we are a small nation of 330,000 people. The biggest production was ‘Gerua’, the feature song of ‘Dilwale’ which received 200 million views on YouTube. That has completely transformed relations.

We have tried to work on other business relations. We have two of our biggest companies working in India. One is high-tech company in foot processing industry and the other produces prosthetics and medical equipment. Other companies in areas of medical supplies, biotechnology, healing materials are coming into the market here. The main stumbling block in our commercial relations is the absence of FTA (Free Trade Agreement). Small countries like ours want to make sure that trade is based on rules that are transparent and predictable. Our companies from small countries are always reluctant to do much business with countries you do not have such bilateral agreements with. We are currently negotiating in context of AFTA–the non-EU agreement talks for which started in 2008. We are negotiating parallel to the EU as we are part of the internal market despite not being member of EU. When we complete the talks it will transform our trade relations completely.

What is the green technology that India could gain from Iceland?

We are the biggest geothermal energy producers in the world. Our share of renewable is almost 90 per cent. We heat all our houses with hot water, we produce electricity with it. We have massive knowledge of developing, designing and implementing geothermal projects. Our companies are working in North Africa, Central America and in Asia. Our companies have been building geo-thermal heating facilities for cities in China of up to 350 million people. You drill a hole, get hot water out and lead it like gas to the houses. You can imagine the emissions relief. We have that technology and we want to bring that to India which has geothermal capacity that needs to be studied and developed.

We also have lots of experience in hydro sector. In environmental technologies, we capture carbon emissions coming out from stations or plants and pump them down into sediments into the ground and transform them into rock. That is a technology India might need from us. We also have companies working towards energy savings using IT especially for marines, helping fishing boats and cargo ships to minimise energy consumption. In food processing technology key thing today is not losing resources. There is a huge part of India that consumes meat and fish. So while meat and fish can be cultivated in farms or caught wild but you want to get maximum yield out of every bit of it. We discovered high technology to maximise yields by X-raying every animal going into the machines that cut them hygienically using water and reduces waste which is important for sustainability.