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11.
The domestic economy is subdued. Casualties have been
high amongst small businesses, large numbers of which had
overborrowed; banks incurred substantial losses. Drastic
rationalisation has been wide spread. Domestic demand is
expected to grow by only 1% in 1990 and even less in 1991.
Bilateral Relations
12. Relations between the United Kingdom and Norway are good. There is extensive cooperation between British and Norwegian oil and gas industries although minor
disagreements occasionally surface over alleged
protectionism by both sides. Governments. The Norwegians recognise the UK's commitment to protection of the environment, but they continue to express concern about the UK's plans for the future of the Dounreay nuclear waste processing plant. The Norwegians are keen to resume commercial whaling a exploited a loophole in the IWC Convention to kill 17 Minke whales last years for "scientific purposes".
13. An international treaty signed in 1920 awarded Norway sovereignty over the archipelays of Svalbard (formerly Spitsbergen), some 400-miles off the Norwegian North Cape. The Treaty accords equal rights to its 42 parties to exploit natural resources on Svalbard. In practice only the
Russians have taken advantage of this - to mine coal. When the Treaty was signed, the Continental Shelf did not exist
as a politico/legal concept. In Norwegian eyes, the seabed around Svalbard is part of the continental shelf ... mainland Norway; the UK and others maintain the islands
generate their own continental shelf. There is as yet little firm evidence of oil and gas reserves on the Svalbard
obviou shelf. The Treaty would have serious implications if the
area did prove commercially attractive. In October 1974 the UK formally reserved its position with the Norwegian MFA and have since maintained this in regular contacts with Norway
about Svalbard and the Northern Flank.
LK
BB1AAJ/4
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