A Conversation With Sweden's Minister for Trade
- Apr. 26 2011 00:00
To hear Sweden's perspective on commerce with the world's biggest country, The Moscow Times met this month with Ewa Bjorling, Sweden's minister for trade. Reporter Alec Luhn interviewed her in Stockholm's Ministry for Foreign Affairs just after Deputy Prime Minister Sergei Ivanov had paid a visit to Stockholm and held a news conference with Bjorling. That was within the framework of the Swedish-Russian Steering Committee, an economic cooperation group for government ministers of the two countries.
As planned, the ministers discussed Swedish efforts to assist Russia with its energy modernization and energy efficiency. Also during the visit, RIA-Novosti reported, Ivanov said European tourists arriving in Russia via a new ferry service — running between Stockholm and St. Petersburg and launched April 4 — can stay in Russia without a visa for 72 hours. In an interview in English, Bjorling discussed both energy and travel, as well as customs, corruption and commerce.
How important is Russia currently as a commercial partner, and how do you hope to develop your relationship further?
EB: Russia is Sweden's 14th-largest export destination, and we are No. 8 when it comes to foreign investments in Russia. So Russia is very important. It's also very close to Sweden. Usually I say it's less distance between Stockholm and St. Petersburg than between Stockholm and Lulea [a city in Sweden's far north].
What common bonds do the countries have culturally or otherwise?
EB: We have common bonds when it comes to history. We have rather similar climates. Both of us care about what is happening in the north, and we are very close if we take a deeper look into the northern area between Norway, Sweden, Finland and Russia. And we have a lot of cooperation.
And also a little bit of competition — in the Arctic, for instance.
EB: Of course.
Do you see that hindering the development of good relations at all?
EB: No, I don't think so. I think the opposite. We have this steering committee meeting once a year between Sweden and Russia, and for the most recent meeting, the deputy prime minister, Ivanov, was here [the week of March 30]. We have a lot of cooperation within energy, space, education and many other areas.
This relates to my next question. What was achieved at the Swedish-Russian Steering Committee meeting, and what remains to be worked out in the future?
EB: We had one concrete thing, and that was that we signed a memorandum of understanding on energy — how we can cooperate much more when it comes to energy consumption and energy efficiency and how to move more toward a green economy. To facilitate more trade between Sweden and Russia, we still need to remove existing trade barriers.
So customs duties?
EB: Customs duties, a lot of bureaucracy in Russia, corruption in Russia. Of course, [we need] also to facilitate when it comes to transport between Sweden and Russia.
Which industries are promising in terms of greater Russian-Swedish economic cooperation?
EB: Clean tech, of course, if we discuss this MoU, and the automotive industry, and also the wood industry. Also, a lot of things in the creative industry and regarding tourism. But I would also like to say science and technology.
It takes a very, very long time when it comes to licenses, high duties, varying duties. If Russia is able to remove those barriers, it will be a fantastic market.
So Russia can benefit from Sweden's expertise?
EB: Both of us can benefit from each other, I would say.
A ferry service between Stockholm and St. Petersburg was recently opened. Will tourism continue to grow between Russia and Sweden?
EB: I think that with a direct line between St. Petersburg and Stockholm, the tourism between Sweden and Russia will increase a lot. We know that approximately 5,000 people could come to Sweden and go the opposite way to St. Petersburg each week: [The ferry runs] two times a week, and there are 2,500 [passenger spots] each time.
How important is shopping travel for the Swedish tourism industry?
EB: I think that you should not just take out one single part like shopping. I think you should [look more at] the total experience of tourism and traveling. Maybe both the food and the culture, the theater, film, the nice environment in Sweden — I'm thinking very much about the Swedish mountains that many Russians like, and that together with shopping, so it's more included in the total experience. That can give the first positive glimpse of Sweden, and Sweden will be more well-known for Russians. Thereby the next step would be doing business and establishing companies and more investments.
Are many Swedish tourists going to Russia?
EB: I think they are, and St. Petersburg is an excellent place to go to, with a lot of interesting things to do. Not the least of which is fantastic museums. The Hermitage is just one example.
Do you have any figures about how many Swedish tourists go to Russia each year?
EB: I don't have any actual figures for the moment, but we are calculating [them], with a huge increase because of this new direct ferry line.
I understand the auto industry is leading Swedish investment in Russia —
EB: Together with IKEA.
Together with IKEA, but there have been challenges. I'm thinking of the financial troubles that Saab has been having, and IKEA also stopped its expansion in Russia due to corruption. How can Swedish companies be successful in Russia, given some of the challenges they've been facing?
EB: Russia has a huge potential. If we take a look at how it is for the moment, as I said, we are the eighth-largest investor when it comes to foreign investment in Russia, despite all those trade barriers, including corruption, including heavy bureaucracy.
It takes a very, very long time when it comes to licenses of different sorts, high duties … and different duties between different customs stations. I know today that you have in Russia more than 200 customs stations, and they don't always implement the law in the same way, and that's a problem.
[Also] some Swedish companies, their experience is very vague when it comes to long-term decisions about customs duties.
So for them it's a problem to have this long-term planning for their expansion. If Russia is able to remove those barriers, it will be a fantastic market.
It seems that Swedish companies invest more in Russia than vice versa. Will the economic relationship ever be more balanced?
EB: I think so. I mean, the more contacts that we have and the more Russians who go to Sweden — maybe as a tourist in the beginning — the more knowledge they will have about Sweden. That will be the key for more business and more investment. And then there's the work that we are doing on the political level to have a lot of cooperation.
Do you think that small and medium-size Swedish businesses can have any role in developing trade links with Russia?
EB: I think so, but I should also be honest and say that it is difficult today for small businesses in Russia since you have these trade barriers, not the least of which is corruption. They don't have the same financial muscle as large companies, and for them it's too expensive to stay there for a long time and to resist corruption. Then they make a decision to not go there at all.
But I think that it will change, as Russia is joining the WTO [World Trade Organization]. And there are Russia's discussions about the free-trade agreement between the EU and Russia. Those can facilitate a lot in the future.
What opportunities and challenges remain for developing trade with Russia?
EB: We have more than 400 Swedish companies active in Russia today, and there are a lot of opportunities in Russia, since Russia's economy is growing rather fast. Russia is also undertaking a modernization agenda that, I hope, will facilitate more trade. More Swedes will really be able to see the benefits of Russia … that we are close neighbors. It's a more open market, but still there are challenges.