N Dlamini Zuma on meeting with Iceland Foreign Minister V
Sverrisdottir

27 February 2007

Minister Dlamini Zuma:

It is a great pleasure for me to welcome my colleague from Iceland, Minister
Sverrisdottir whom I have had the honour and privilege of knowing for some time
and we are very happy to welcome her here to South Africa since this is her
first visit to South Africa and indeed to Africa. She has also just visited
Uganda. We hope her stay and that of her delegation in South Africa will be a
very fruitful one.

We also welcome the fact that Iceland has just opened its Embassy in South
Africa. That is a very welcome development. We have had very constructive
discussions with the Minister on a whole range of issues, our own bilateral
relations at a political level which are very good. Our historical relations
are also very good. During the apartheid days Iceland was one of the countries
that supported our struggle. We are now looking at improving our co-operation
in terms of business and other areas. The Minister is here with a big business
delegation.

We also spoke about our regions particularly the African continent and
various areas of co-operation in conflict resolution. We also spoke about South
Africa itself, what we are doing. Iceland is a small country with big
achievements, it has moved from being one of the poorest countries in Europe to
being amongst the richest with a very high standard of living. There is much
that South Africa can learn from Iceland.

I will now allow the Minister to provide a few more details on what was
discussed but we have had very wide-ranging fruitful discussions including
Iceland's co-operation with other countries in Africa.

Minister Sverrisdottir:

I am very happy to be here in South Africa and have the opportunity to
witness this country's natural beauty. Minister Dlamini Zuma and myself have
had very fruitful discussions on a number of issues which concern our
countries. We have met twice before, in 2003 when Minister Dlamini Zuma visited
Iceland and again in 2006 on the fringes of the United Nations General
Assembly. I hope we will meet again in Oslo, Norway next month.

I started my visit in Uganda and as the Minister has said, this is my first
visit to Africa. Our Development Aid Agency has been operating in Uganda since
2001. It was very rewarding to see for myself the various projects that Iceland
is supporting in Uganda. The highlight of my visit to South Africa was the
opening of our Embassy in Pretoria last night. I really hope this Embassy will
serve to strengthen the ties between our countries.

In my visit to both Uganda and South Africa, I have been very impressed by
the women I have met. I feel that the power of Africa lies within its women. I
want to add that I am here today with an all-women delegation.

Questions and answers

Question: Minister Sverrisdottir, I have noticed that the balance of trade
is in South Africa's favour and that trade volumes between both countries are
very small. Does this concern you? I also notice that 99% of Iceland's energy
is green, renewable energy, do you foresee any areas of co-operation between
South Africa and Iceland in this regard?

Answer: (Minister Sverrisdottir) I am a bit concerned about the trade
imbalance. I want this to be addressed and I believe this can be done through
the recently concluded South African Customs Union (SACU)-European Free Trade
Association (EFTA) agreement. Iceland has already ratified this agreement
although other countries have not. I hope they will complete the process very
soon so that we can begin implementing this agreement.

Regarding the energy in Iceland, it is true that we only produce green and
renewable energy, hydro and geo-thermal energy. We have an abundance of
resources. We also use geo-thermal energy to heat our homes and water. As you
know, 90% of our homes must be heated. We are in a very special situation
regarding the production of energy. I am very sorry to not know if South Africa
has geo-thermal sources of energy, if there are, we could of course, co-operate
in using this energy.

We have a lot of expertise and specialists in this regard. We have been
co-operating with many countries in this regard, even in Africa. We have a
project in the west of Uganda in this regard. We have much expertise in this
area and seek co-operation with other countries.

Minister Dlamini Zuma: We encourage everybody in SACU and other countries to
ratify the SACU-EFTA Agreement so that indeed, as Minister has said, it will
help to facilitate free trade between our countries. We also hope that the
business delegation that is accompanying Minister Sverrisdottir will meet with
their relevant contacts and work towards narrowing the trade gap.

In terms of geo-thermal resources, we do have some although I am not certain
how much is needed to use as is done in Iceland. We do have in some of the
provinces geo-thermal resources, some hot springs which are not used. Perhaps
we could look at this to determine whether we can have co-operation or not.

Question: Minister Dlamini Zuma, neither of you has mentioned Iceland's
ambitions to join the United Nations Security Council. I wanted to know your
views on this and how Iceland could contribute to the work of the Council.

Answer: Minister Dlamini Zuma: We did speak about this matter although we
did not mention it in our opening remarks. South Africa is quite supportive of
Iceland's intention and is now for the first time in the Security Council. We
will be quite happy to support Iceland.

We hope that Iceland will be able to support some of the African issues in
the Security Council. As you know, 60% of the work of the Security Council is
about Africa. We would like Iceland to be more familiar with African issues and
that is why we spent quite some time on this area.

Question: Minister Sverrisdottir, what is Iceland's view on global
warming?

Answer: We are very concerned about this matter in Iceland. As you know, the
effects of this will be felt more keenly in the North Pole than elsewhere. We
have ratified the Kyoto Agreement. We have received a special mention in the
Agreement because of the use of green, renewable energy that is used in
Iceland. As I have already mentioned, this is the only energy Iceland produces.
Iceland wants to co-operate with any country that seeks assistance in this
regard.

The period 2012�2016 will be very important. We hope that all countries will
participate because it is not enough that only 25% of the countries that
produce emissions have ratified the agreement. We must have countries like the
United States, India and other big countries implement this agreement. This
will be the only way to ensure success.

Question: Minister Sverrisdottir, in which areas is Iceland seeking an
increase in Foreign Direct Investment in South Africa?

Answer: It is not the duty of governments to increase foreign direct
investment in countries. It is the responsibility of governments to create the
frameworks in which such investments can occur. In this regard, we have
finalised the SACU-EFTA Agreement.

We also mentioned the civil air traffic agreement which I think we will be
very happy to finalise as well as a bilateral investment agreement which we do
not have today. These are the possibilities in which governments can co-operate
to encourage business people to invest in other countries

Minister Dlamini Zuma: It is the responsibility of governments to create the
environment in which businesses will be happy to invest. We are going to
negotiate and agreement on the Protection of Investments and an Agreement on
the Avoidance of Double Taxation. We will also discuss the Aviation Agreement
that the Minister is accompanied by a business delegation to South Africa
indicates that there is interest from Iceland to conduct business activities in
South Africa.

Issued by: Department of Foreign Affairs
27 February 2007