Speech by President of the Republic Tarja Halonen at the Global Progressive Forum in Brussels, 27 November 2003

Thank you for your kind words. It is really a great pleasure and privilege to address this Global Progressive Forum.

Globalization is a challenge and an opportunity for the whole world and especially for international progressive forces. The challenge is to make globalization a positive force. A force for sustainable development, justice, employment, social protection and growth. Globalization holds a promise for all this.

In my statement I am going to explain about the work of the World Commission on the Social Dimension of Globalization, which was established by the ILO some twenty months ago. Then I am going raise some issues, which seem to be topical in the context of globalization.

After prolonged work at the ILO’s working party on Social Dimension of Globalization, the organisation’s governing body gave in November 2001 the Director-General, Juan Somavia, the authority to set up an independent World Commission on the Social Dimension of Globalization. Juan was kind enough to ask me to chair the commission with the President of Tanzania, Benjamin Mkapa. All in all we are 26 commissioners from different backgrounds from all around the world, who have told their own opinions but also listened to their fellow citizens' point of view.

While the commission’s work is, of course, highly relevant to the ILO, its scope and mandate go well beyond that organization. Our aim has been reaching to the whole world, and also to the rest of the multilateral system.

Our commission has taken its duty very seriously. We have held six meetings, over 30 dialogues around the world and working sessions with leaders of international agencies. Commission has been well received everywhere. Sometimes the expectations seem to be even too great.

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Our starting point in the World Commission has been that in order to be sustainable globalization must meet the needs of people. Our ultimate goal is to help make globalization a resource to promote decent work, reduce poverty and unemployment and foster growth and development.

Based on this challenging goal we developed our vision, a vision for change. The main points in our vision are:

The current course of globalisation must change. Present situation is not ethical, nor politically feasible. Too few share its benefits. Too many have no voice in its design and no influence over its course.

The results of globalisation are what we make of it. While history and geography set the points of departure, much depends on the way it is governed and the values that inspire its actors.

We wish to make globalisation a force to increase human freedom and well being, and bring democracy and development to the communities where people live.

Globalisation needs also to be in balance with the environment so that it can be a force for sustainable development.

The principles that must guide globalisation should also be reflected in national institutions, rules and political systems. The basic principles are democracy, human rights and the rule of law. These basic principles must be applied in all countries, in all sectors of society.

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There is wide acceptance that the key characteristics of globalization have been the liberalisation of international trade, the expansion of foreign direct investments (FDI), and the emergence of huge cross-border financial flows. This has resulted in increased competition in global markets.

This is also a result of consciousness policies in order to achieve better material well-being for citizens.

New technologies have also given a distinctive character to the current process of globalization, as compared to similar episodes in the past.

Something else is also very different. Unlike earlier episodes of globalization, the current process largely excludes massive cross border movements of people. While goods, firms, and money are largely free to criss-cross borders, people are not. One could say that this is a notable discrepancy in the logic of globalization.

Cross border movement of people is an issue that needs to be tackled. It involves millions of people and the remittances of foreign workers’ to their home countries are already today almost two times more than the official development aid.

Best way to deal with the issue would be a multilateral framework. The objectives of such a framework could be:

a) To promote all mutually beneficial ways of increasing migration opportunities, with due regard to States’ legitimate interests to ensure that the process is fair to both sending and receiving countries;
b) To make the process orderly, predictable and legal; to eliminate trafficking and other current abuses where women and children are especially vulnerable;
c) To ensure full protection for the rights of migrant workers; and
d) To maximise the developmental benefits of international migration

This is genuinely a global issue and can be solved only by joint political action. Achieving a multilateral framework requires co-operation and policy coherence between international organisations.

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Compared on country level, there have been clear winners and losers in globalization. Among the primary winners are the industrialised countries, in spite of internal problems of adjustment that have generated losses for many workers.

The other clear group of winners have been some developing countries – among them China and India - that have been highly successful in increasing their exports and in attracting large inflows of FDI. There are also some other examples of this in all other parts of the world, with the exception of Sub Saharan Africa.

At the other extreme, the exclusion of the least developed countries (LDC) from the benefits of globalization – and even the whole process of globalization - remains a reality. The LDCs are trapped in a vicious circle of interlocking handicaps including poverty and illiteracy, civil strife, geographical disadvantages, poor governance and economies largely dependent on a single commodity.

The economic benefits and social costs of globalization are not evenly distributed among social groups. Even in the industrialised countries some groups of workers have been adversely affected by trade liberalisation and the relocation of production to other countries.

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Successful participation in globalization is bound up with national capabilities and policies. I will reiterate the three basic principles for a modern state: democracy, human rights and the rule of law. Countries, which do not subscribe to these principles, will not in the long run be able to provide benefits of globalization for their people.

People living in well-governed countries with strong social justice and education systems, income distribution mechanisms and social safety nets are more likely to gain from globalization.

For these reasons it can be said that the response to globalisation begins at home. It is also a good reason to make the nation state a stronger entity.

Also regional integration and co-operation can promote a more equitable pattern of globalisation in many ways.

However, increasing globalisation has given rise to a broadening range of issues that can be effectively dealt with only through concerted global action. Examples of these include the problems of financial crisis, communicable diseases, cross-border crime, tax havens and tax competition.

The response to these new challenges so far has been unsystematic. We need a more coherent approach to these challenges. This could be done under the leadership of the UN. Millenium Summit was a good start for this.

In the fields of economic and social development, also the actions of the Bretton Woods Institutions could be better balanced. Besides economic growth and stability, there should be enough emphasis on social justice and employment. All countries share the goal of better employment, whether rich or poor.

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In order to make globalization a positive force for people it is important that the rules governing it are fair. We have today a global economy, but not a global society. The governance and rules are clearly lacking behind the economic developments.

The rules of the global economy need to be fair, both in creating opportunity and determining outcome. They need to reflect the diverse situations of peoples and countries.

The rules of the global economy need also to be applied more equally and fairly, so that multilateral rules for trade, investment, intellectual property and labour adequately reflect the common interest.

I will mention especially the trade in agricultural products. This is an issue that comes up, whenever globalization or international trade is discussed.

Agricultural subsidies, both production and export subsidies as well as market access barriers in industrialised countries, notably in the US and EU, are widely considered to be the most single unfair issue in the multilateral trading rules. Something needs to clearly be done in this field.

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Action to achieve fairer rules also needs more coherent and equitable policies at the international level. This is essential to ensure that the benefits of globalization are more widely distributed and common goals are realised.

We need international solidarity to raise capability and security. We also need to make decent work a global goal. Policies and action at the international level need to embed fundamental rights at work; realise the goal of full employment; support national social protection systems, and facilitate social dialogue among representative workers and employers organisations in global production systems.

The key to better international policies lies in the integration of social and economic goals. Besides national governments, also multilateral institutions need to direct their policies towards achieving these common global goals.