Speech by President of the Republic Tarja Halonen at the "Competence 2004" conference arranged by Åbo Akademi University's Centre for Continuing Education on 11 November 2004

Should we just try to succeed in a tough world or should we make it better? - I'm afraid we have to do both.

Nowadays people understand better than before that in a globalizing world development, social justice, the carrying capacity of the environment and security are more closely intertwined than before. We also realize that the world has become a village where our own welfare is tied to others' welfare. Today's situation, in which the majority of the world's population live in poverty while a minority live in abundance, is not only wrong; in the long run it is unsustainable.

From the viewpoint of the individual, life has become less secure. The daily flow of news includes frightening things for which there seem to be no solutions. The predictability of employment and earnings is weaker than before. Opportunities to succeed have grown but so has the fear of failing.

Interdependence and the existence of common interests are taken seriously in the world community. This is demonstrated by many recent commitments such as the UN's Millennium Declaration, the Monterrey Consensus on Financing for Development and the Johannesburg Declaration on Sustainable Development. Political will has also been expressed in other international forums at the start of the new millennium.

This is a question of historical political promises and expressions of will concerning the entire planet. These promises must be honoured in a spirit of shared responsibility and remembering the limited nature of global resources.

In the Millennium Declaration we acknowledge that globalization offers great opportunities, but at present its benefits are very unevenly shared and its costs are unevenly distributed among and within countries. All too few are benefiting and all too many are suffering or are excluded from today's globalization. In the Millennium Declaration we challenge one another to make globalization a positive force for all the world's people.

This challenge in the Millennium Declaration was the basic idea behind the World Commission on the Social Dimension of Globalization, which was established by the International Labour Organization two and a half years ago. Last February we published a unanimous report entitled "A Fair Globalization: Creating Opportunities for All". Before going into this report I would like to tell you about the work process itself, which fits in nicely with the theme of your conference. How was our commission of "not like-minded people" able to produce a unanimous report?

I co-chaired the commission together with President Benjamin Mkapa of Tanzania. The members were consciously selected to represent different parts of the world and different experiences of globalization. They included researchers, politicians, civil activists, business managers and trade unionists. They were strong people from both sides of the fence. But they were also a unique collection of interesting experts and true spokesmen for the groups they represented.

As a former basketball player I know that five stars don't necessarily make a championship team. The composition of our commission did help us avoid falling into the "single truth" trap, however. We respected members' different opinions and encouraged everyone to be themselves. The only thing we demanded was that everyone should have this same right and that others should listen to their experiences. This first half year was a truly interesting and exhilarating experience.

After that we tested different arguments on outsiders. We held discussions with representatives of the World Bank, the International Monetary Fund, the World Trade Organization and other actors and we opened a website.

The multitude of opinions and views became even clearer in the national and regional dialogues and other meetings organized by our commission. We learned time and again that people's concept of globalization varies according to personal experience. Our conclusion was that globalization has many faces.

In Finland we arranged a one-day national dialogue when the commission got started and another dialogue in the final stage of work. We also had various contact persons. In addition I participated in the European regional dialogue, which was arranged by the European Commission. During a state visit to Tanzania I attended the African regional dialogue in Arusha, and during an official visit to China I attended the national dialogue in that country. I also attended the Asian regional dialogue in Bangkok.

Others did likewise. The commission's work was quite open. Parties interested in globalization were kept up to date beginning with the Secretary-General of the United Nations, the leaders of many nations and different organizations such as the World Economic Forum in Davos and the World Social Forum in Porto Alegre.

Openness and broad contacts with different parties were also important to promote the recommendations in our report. This work is well under way in many forums.

Reaching agreement also requires the preservation of mutual trust and respect. Transforming a consensus in the air into a public commitment in so many words is a difficult process. In the end we succeeded by accepting that any offspring could not be anyone's clone.

We knew in advance that our success or failure would be a public matter. We wanted change and we wanted to succeed and we did succeed. On the whole the report has been given a good reception around the world.

The goal of our report is change: change towards a real dialogue, change for a better future, change for a fair globalization.

The cornerstone of a fair globalization is paying attention to people's needs. People's needs and welfare are forgotten too often in discussion concerning globalization. People talk more about the proper functioning of markets. Emphasis has been placed on deregulation, market access and macroeconomic measures, which are undoubtedly important. They are not an end in themselves, however, but are means to improve people's welfare.

Nation states are still the main actors in globalization. People's ability and possibility to take advantage of globalization depends greatly on where they live. Nation states should provide an encouraging environment for self-fulfilment, starting with democracy, the rule of law and respect for human rights.

We need sustainable development. "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs", according to the definition agreed by the World Commission on Environment and Development (the Brundtland Commission).

A fair globalization requires equal international rules. The global economy must provide everyone equal opportunities and access and recognize that resources and development needs vary from country to country. Ostensibly equal rules do not guarantee a fair result if actors are in different stages of development.

Rules for trade and capital flows must be supplemented by fair rules for the cross-border movement of people. Every country stands to benefit from an orderly and managed process of international migration that can enhance global productivity and eliminate exploitation.

We need development cooperation. We have a shared responsibility to help the vast majority of countries and people to reap the benefits of globalization. The industrialized countries need to fulfil the promise they gave over 30 years ago of raising development aid to 0.7% of GDP. At the same time we need to give open-minded consideration to new and innovative proposals for additional development funding, including international taxation.

We need a stronger and more efficient multilateral system. This is the key instrument to create a democratic, legitimate and coherent framework for globalization. We urgently need improved co-operation and better policy coherence between international organizations. The structures and procedures of international organizations also need to be speedily reformed.

People all over the world share the dream of providing for their own needs through employment. This can be in the service of someone else or as an entrepreneur. Employment or unemployment has an important effect on how people experience globalization. Where the employment situation has improved, globalization is perceived as positive, and where people have lost their jobs it is perceived as negative. It is no accident that globalization is a quite positive term in China while it seems to be a negative term in some other countries. Here it should be pointed out that China and India today compete more on the basis of competence and not cheap labour alone.

According to the ILO's statistics, open unemployment has increased globally in the past two decades. The situation varies greatly in different regions and countries, however.

All the same, there are clear trends in global employment. Work is becoming increasingly networked with the spread of global production systems. Work goes on around the world without stop. The growth of these production systems has been most visible in high-tech industries and labour-intensive consumer goods. It is also becoming more significant in some services.

Although the internal dynamics vary between these sectors, they have something in common. Jobs are disappearing in some countries and fields and are being created in others. Unskilled workers stand to lose the most, but not even skilled workers can be sure about their own position in this global competition. This is far too evident in most of the EU's member states. At the same time it has became evident that employees' negotiating position vis-à-vis employers has weakened.

Governments and the European union as a whole should pay more attention to economic and trade policies' impact on employment. Short-term job losses are a daily occurrence. In these cases governments need to implement active policies such as job training and promoting entrepreneurship that can lead to new employment opportunities. Let me underline the importance of preventive measures - sound domestic and fair regional policies - whether they concern education, the economy or social security. It is always more difficult, more painful and more expensive to take corrective measures afterwards.

A key instrument at the EU level is the Lisbon Strategy, which set the goal of making the European Union the most competitive economy in the world by 2010. The Lisbon Strategy combines competitiveness with broader goals: economic growth, employment and social cohesion. Unfortunately the implementation of the strategy has been too slow.

Finland is an actor and adapter in globalization. We have to influence the development of globalization and we also have to make sure we succeed in different stages of globalization. These processes are mutually supporting.

Finland is one of the beneficiaries of globalization. So why should we demand change? The answer is simple: because it is fair and because an unfair situation is unstable and is not safe for anyone in the long run. For this reason Finland should be among those promoting change.

During the commission's work I became even more certain that Finland must ensure its own success. We are so small that it does not have great significance for others and we are rich enough so that any setbacks we may suffer will not arouse pity elsewhere.

Last autumn I talked about this with the Prime Minister, and on this basis I noted in my New Year's speech that Finland needs its own globalization strategy. I am glad that the entire Government has been active with regard to globalization and that our cooperation has been excellent in this matter.

Our national globalization strategy must have two parts: external and internal. We must consider what kind of globalization we want and what we can do to achieve it. Work in the EU is important in this respect.

On the other hand we have to consider how we can succeed in each stage of globalization. Here the final report that was published day before yesterday by the Prime Minister's working group on Finland in the World Economy is quite timely.

It will take a while for me to study the recommendations in the report, and I won't comment on them here. The title of the report, with its emphasis on competence, openness and the ability to change, says a lot about how Finland should meet the challenge of globalization, however. We must also make sure that in correcting our weaknesses we don't weaken our strengths.

The challenge of globalization for Finland is the same as the challenge of a changing world for leadership. The idea of all-knowing, strong and autocratic leaders is simply outdated. Nowadays situations change rapidly and it is important to foresee change and to react quickly and sift out what is essential from an enormous flow of information. This requires flexibility and the sharing of responsibility on the part of leaders. Leaders must be able to operate in networked organizations.

Leadership and decision-making situations vary considerably. Sometimes fast decisions are needed, while at other times decision-making processes can be quite long. In both types of situations long-term goals must be kept in mind. It is important to hold the door open for new ways to do things, because one can succeed in many ways. Leadership based on a single truth or a single way of doing things can run into great difficulties in a globalizing world.