Speech by President of the Republic of Finland Tarja Halonen at the Pohjola-Norden seminar 'Will there be any jobs left in the Nordic countries? The role of the Nordic countries in globalisation' on 5 November 2005

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It gives me great pleasure to speak at this seminar arranged by the Organization for Nordic Cooperation. The seminar theme could not be more topical. Globalisation is being discussed all over the world and responses to the challenges it poses are being sought everywhere. I would like to thank the Organization for holding this very relevant seminar.

The Presidential elections are approaching in Finland, and polls of various kinds are being conducted all the time. One poll seemed to show that people are not so very interested in globalisation. But reading the results more carefully I realized that those people were also very interested in employment and other aspects of everyday security. They were also concerned about fairness in the world. In other words, they are interested in the social dimension of globalisation.

The worry about unequal and unfair developments in the world and all the related risks remains very relevant. Market deregulation and the extensive introduction of new technology has both accelerated and complicated these development impacts. Globalisation has created winners and losers all over the world, both between and within countries.

The most commonly cited example of a winner among developing countries is China, where according to some estimates as many as 400 million people have escaped from extreme poverty. Of course, social tensions have increased at the same time.

Sub-Saharan Africa, on the other hand, is usually mentioned as an extreme example of the losing side. It has remained almost untouched by globalisation, or at least by its benefits.

I have said on many occasions that globalisation shows major promises of a better future, but so far these promises have not been redeemed in full.

What about Europe and the Nordic countries? From a worldwide perspective, it is the European countries, particularly the Northern European countries, that have been the winners as far as globalisation is concerned. We have been able to benefit from the opening up of the global economy and have sold products and services all over the world. For example, over the last twenty years the national income in Finland has grown by almost 60%. As a nation, we are wealthier now than we have ever been, and this can be seen in international comparisons of national income. But how can this be seen in Finland?

For the last ten years following the recession, Finland's unemployment rate remained frozen at a little under 10% despite all our efforts. At the moment, the unemployment rate is 7.1%, although there are more people at work in Finland now than ever before. At the same time, income differentials have shown a distinct increase. This has happened in the other Nordic countries, too. Average economic prosperity is increasing, but it is distributed more unevenly, and one of the key reasons for this is high unemployment.

Although each of the Nordic countries has its own special features, they seem somehow alike particularly to the outside observer. This is probably due to what is known as the Nordic welfare model, in which stability is created by strong democracy and social justice. It is an excellent example of the convergence of the interests of the individual and the interests of the community.

The Nordic countries are extremely successful in various international comparisons. We are all up there at the top for standard of living, competitiveness, sustainable development, education and the environment. Our economic growth has also been reasonably strong in recent years. There is one league table where we are right down at the bottom, and we are proud of it. That, of course, is the corruption league table.

What is interesting is that our Nordic system works well in different political and economic circumstances. Finland, Sweden and Denmark are members of the European Union, but Norway and Iceland are not. Norway has oil and gas reserves, but the others do not. Denmark is an important agricultural exporter but the others are not. Finland's monetary unit is the euro, whereas the other countries each have their own krona or crown. Traditional industries vary from country to country and our national languages are far from being predominant world languages. I am sure that you could easily continue the list yourselves. I would find it very interesting to compare the strategies of the Nordic countries in more detail, studying their positive and negative points so that we could all benefit.

To my mind, the fact that the Nordic countries have been extremely successful internationally is a demonstration of the strength of the Nordic welfare society as a whole. It continues to give our citizens an excellent opportunity to live a good life even though it is built up on different foundations and adapted to different conditions in each country. It is in our interests to hold on to the Nordic welfare model and to continue to develop it further.

In spite of all this, the question posed by this seminar, 'Will there be any jobs left in the Nordic countries?' is a provocatively topical one. Every day we hear news of jobs being lost. Even if we account for the fact that losing a dozen jobs is a more interesting news story than creating 50 new jobs, I am somewhat concerned by this trend.

Finland’s success story has been based above all on expertise. Finland continues to invest in teaching and research at a relatively high rate, but these investments are declining somewhat. Nevertheless, we are much better placed than most of our fellow Member States in the EU. We should not only increase our own investments but encourage the rest of the EU to do so too. The only success factor we western European countries have is quality, as indeed was pointed out in the EU’s Lisbon Strategy. In nautical terms, I would like to see our ship in prime condition amidst an ever-improving EU fleet.

Close cooperation between the private and public sectors in research has guaranteed the rapid transfer of innovations to the market. Without research and developments there can be no new products. Basic research is also needed to lay the groundwork for future applied research. Of course, research is expensive, and that is why cooperation is essential within the Nordic countries, within Europe and with the United States. Cooperation could be strengthened even with more distant partners.

There is much public debate about tax competition. However, from what I know the main reason for investments bypassing the Nordic countries is not always taxation, but a combination of factors: the availability of raw materials, the proximity of markets and reasonably priced competent labour. I believe that cheaper production costs and larger markets will inevitably cause some jobs to migrate first to Southeast Asia and Latin America, and perhaps later to Africa. Thus, we should not ask how we can retain jobs; we should ask how we can create new jobs. I believe that new, good jobs can be created, but this will require the will and the capacity to cooperate.

Globalisation and related themes have been given a great deal of attention all over the world in recent months. For example, one of the key themes of the G8 summit in the summer was writing off the debts of the world's poorest countries. Improving the world has thus become the realpolitik of today, because a world that is fairer is also a world that is safer.

There has been a lot in the news about the trade facilitation negotiations going on with the World Trade Organization, or what is known as the Doha development round of talks. This is understandable. The talks have not progressed as hoped. However, I feel that the trade negotiations have made better progress than those concerning the free movement of people. And yet the movement of people across the borders between countries is a fact of life today. This can be seen even up here in the Nordic countries. The motive for migration and cross-border movement is often an extremely simple one: people are looking for a better life for themselves and their children.

It is increasingly difficult to draw a distinct line between proper refugees and people who migrate for other reasons. This provides opportunities for illegal arrangements known as trafficking in human beings. For preference, some sort of universal system or set of rules should be established for the cross-border movement of people. A system of this kind would benefit everyone: migrants, countries of arrival and countries of departure.

We are well aware that we should address the root causes that motivate people to move away from their homeland. Globalisation could be made more human if national and international evaluations were to turn work itself into a value as important as economic growth, interest rates or inflation. Decent work is the foundation for a good life, in both north and south.

The world is changing rapidly. Change has become a steady state, and it is not easy to manage. Up here in the Nordic countries, however, we have a good chance of living safe and secure lives as countries, peoples and individuals, now and in the future. We must draw on our strengths and correct our weaknesses.

Let us be realists. A world with fair and just rules would be a better and a safer place. We would be more successful in a fairer world. So why not join forces with others who think in the same way? This is what changing globalisation is all about.