Speech by the President of the Republic Tarja Halonen at the 100th anniversary banquet of the Student Nights of the Lund Academic Society, 6 May 2005

It is a pleasure and a privilege to address you at the Student Night of the Academic Society in Lund. This distinguished tradition began a century ago. Promoting freedom of expression and encouraging social debate is a cornerstone of democracy. I hope that the conversation will be lively tonight.

The internationalization of university education is one of the main goals of higher education in the Nordic countries and in Europe. What we mean by internationalization here is the development of education content to take into account the changing need for expertise brought about by increasing international interaction and globalization. Internationalization also involves the evolution of multi-cultural study environments. To this end, we are pursuing exchanges of students, interns and teachers on the one hand and recruitment of foreign degree students and foreign teaching staff on the other.

The tradition of academic mobility goes back several centuries. Ever since the Middle Ages it has been self-evident that one could not become a notable scholar without extensive studies abroad. At that time, academics constituted only a tiny fraction of society. Today, the situation is completely different: in many countries, at least half of any given age group undertakes higher education. Providing for mobility under these circumstances calls for a smoothly functioning structure and funding opportunities.

Such structures and funding opportunities have been put in place among the Nordic countries and in Europe in general. The time-honoured ideal of a European citizen who is educated and competent in several languages has thus been revived, principally during the 1990s. University degrees and studies are being developed to make the mobility of students and teachers easier, to make degrees more compatible, and above all to make mutual acknowledgement of qualifications simpler.

In Finland, ambitious targets for increasing student exchange were set as far back as in the late 1980s. At the moment, more than 7,500 Finnish university and polytechnic students go abroad each year to study for one or two semesters. Finnish universities receive some 6,600 foreign students each year, so the exchange is quite well balanced. This is a significant achievement, and it is also a testimony to the attractiveness of Finnish education and the wide range of teaching available in foreign languages, in practice mainly in English.

Within the Nordic countries, Finland is not quite so attractive. In 2003, nearly 680 Finnish students went to study in other Nordic countries, but only 260 Nordic students came to Finland; and most of these were Finns who are otherwise studying in Sweden. Sweden is by far the most popular destination in inter-Nordic student exchange, while Finland is the most active source country. Teacher exchange is also at a lower level among the Nordic countries than between Finland and other European countries. This has been the case for many years.

The number of Nordic students studying for a degree in Finland is even smaller. Indeed, the numbers of Nordic exchange and degree students in Finland remain low year after year, which is very confusing when you consider that there is excellent potential for studying in Swedish in Finnish universities and polytechnics. Evidently Finnish universities and authorities have not sufficiently marketed this opportunity in the other Nordic countries.

The themed event ‘Sweden and Finland meet in Lund’ organized by the Finnish Embassy in Stockholm and the University of Lund here in April 2004 was aimed at correcting this issue. The purpose of the event was to prepare the ground for a new exchange programme between the Universities of Lund and Helsinki and for inviting a distinguished lecturer from Finland to the University of Lund each year. I hope that the Europe programme at the University of Lund will take up our offer. These joint ventures will create closer contacts and enable students here to find study opportunities in Finland.

We carry out a good deal of political and economic cooperation. It would only be natural if we could achieve an increase in study and research cooperation. Prosperity under globalization depends on competence, and I believe we both have things to offer one another in this respect.

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The stagnant bipolarity of the Cold War has been transformed into a more dynamic, creative and cooperative world, yet also into a world of harsh competition. At the same time, technological advancements, particularly in information and communications technology, have progressed at an unprecedented rate. Globalization is the term often used for the combined effect of these two phenomena.

The deregulation of trade and the dismantling of the controlled economy had of course begun earlier, but it was at this point that more and more countries began to deregulate their economy in a determined way, both domestically and internationally. The belief in the positive impact of the market economy on economic growth and employment was strong. This was a conscious political move. A political move whose aim in many countries was quite genuinely to improve the welfare of citizens.

Trade was deregulated, the volume and speed of capital movement increased like never before, and new information technology shrank the world into a common playing field which, however, was not a level field nor fair to everyone. More and more countries joined the international economy and at the same time grew increasingly dependent on international trade and capital movement.

Economic growth picked up speed all around the world in the late 1990s. But economic crises emerged at the same time in Russia, Asia and South America, and countries much larger than Finland or Sweden were hit hard. At the same time, criticism of globalization grew stronger and was thrown in our face in TV broadcasts from Seattle, Gothenburg, Prague and Genoa.

So, is globalization good or bad? The answer to this frequently asked question is, of course: a bit of both.

What is good about globalization is that more and more economies and societies are now open. The exchange of goods, ideas and information is much freer than before. Innovation, creativity and enterprise are flourishing. In Asia, more than 200 million people have escaped the abyss of extreme poverty in the space of one decade. Globalization has also increased people’s consciousness of their rights and their identity all over the world. Decision-makers are now more clearly accountable to their citizens.

However, globalization also involves many worries and negative aspects. The benefits of globalization remain a distant dream for many, whereas its risks are all too tangible. The instability of the international economy is a risk even for the rich, but it hits the poor particularly badly. Extreme poverty, social exclusion and inequality persist. Many scientists feel that the gap between wealth and poverty is now wider than before.

Generally speaking, the industrialized countries have benefited from globalization. Countries like Finland and Sweden are often held up as models of success. We enjoy a high level of education, and we produce competitive products and services for the world market. We have a high level of social cohesion, and our societies are adaptable. Finland and Sweden have been able to make use of the advantages of market deregulation, even though both have also felt the impact of jobs moving abroad.

I myself have held the Nordic countries up as examples of how a welfare state can be both fair to the individual and efficient as a community, for example in investing as much as possible in the education of its population.

Another group of globalization success stories may be found in rapidly developing countries that have opened up their markets in a controlled fashion and exploited their strengths on the world market. The best examples of this are China and India. Both have capitalized on their large size and their trained yet affordable labour force. Both countries have been able to raise their processing rate and their productivity rapidly.

Globalization also has its losers. A typical case would be a poor person living in a poor country in sub-Saharan Africa. It is hardly surprising that such a person is usually a woman. For sub-Saharan Africa, we might almost talk of deglobalization. The countries of this region have been all but excluded from the mainstream of the world economy.

Why is this? One important factor is the weakness of their society. Poverty, political and military conflicts and famine prevent them from strengthening their society to the point where their citizens could gain access to the benefits of globalization. The inequality of the international community has also prevented these countries from making themselves heard.

The worldwide impact of globalization is unequally distributed both between countries and within countries. There are winners and losers everywhere. What people feel about globalization is usually based on their own experiences. Some feel that globalization is the ticket for defeating poverty and lack of wellbeing in the world. Others feel that globalization is to blame for that lack of wellbeing. Both views are at least partly right — and wrong.

The starkly opposed viewpoints have eroded the effectiveness of the globalization debate and the search for political options. In an effort to promote genuine debate instead of polar opposition, the International Labour Organization (ILO) appointed a World Commission on the Social Dimension of Globalization in February 2002. This Commission published its Report, A Fair Globalization: Creating Opportunities for All, in February last year. I had the pleasure of co-chairing the World Commission with Benjamin Mkapa, President of Tanzania.

The Commission was purposely composed of people with very different views. In addition to two Presidents currently in office, the Commission included politicians; representatives of business, trade unions and other interest groups; activists from the new civil society; academics; and practical workers. For all its disparate views, the Commission managed to find a shared vision. Each of its members would have produced a different report on their own, but as a group we succeeded in shaping a shared vision of globalization. The work of the Commission is tangible proof of the potential offered by discussion and cooperation.

In the Report, the Commission presented an analysis of globalization and its impacts, and a large number of proposals as to how the present globalization process should be developed so that it would meet people’s needs better.

The work of the Commission concluded with the publishing of the Report, but we considered it important that the process continued beyond that. The Commission’s recommendations have been incorporated in the globalization efforts of the African Union. The European Commission published a positive communication on the Report a year ago. Within the EU, the process has been continued in a variety of formations of the Council, and as far as I know, Germany is organizing a high-level forum on our Policy Coherence Initiative next autumn.

The United Nations is an important forum for promoting the work of the World Commission. The General Assembly of the UN unanimously approved a Resolution proposed by Finland and Tanzania whereby the Report, A Fair Globalization: Creating Opportunities for All, was accepted as a background document for the Special Session of the General Assembly next autumn. This is a small step towards a fairer globalization — a small step on a long and winding road.

So, how can we achieve a fairer globalization?

Firstly, we must invest in the nation-state’s capability to respond to the challenge of globalization. The nation-state remains an important actor on the world stage. What people understand and feel about globalization is mainly based on the actions of their national government. At the same time, the nation-state remains the fundamental unit of democratic participation. Democracy, human rights and the rule of law remain the foundation of development. Good governance, a reasonable national economy and social equality are also supporting factors. Boosting activity in civil society in both North and South is important.

The rich and strong nation-states should pay better attention to the impact of their actions on the poorer developing countries. At the same time, developing countries need to be encouraged and supported in improving their national governance.

Secondly, we must develop international and multilateral controls. The entire multilateral system, including the Bretton Woods institutions and the World Trade Organization (WTO), need reforming in terms of both decision-making systems and operations. As a small and minor example, we might call for an additional seat for sub-Saharan Africa on the Board of Governors of the World Bank. This would not have any appreciable impact on the status of current members of the Board of Governors, but it would give Africa a far better presence in the World Bank.

The whole world needs better and fairer rules concerning international trade, direct foreign investments and crossborder movements of people. The existing rules need to be supplemented, revised and improved, and the needs of the poorest countries need to be given more attention.

Thirdly, we need better international policies and actions.

Promoting employment must be made into a worldwide goal. Employment is mentioned in the charters of many international organizations, but all too often it remains a secondary concern in their day-to-day work. We do not even always know what the impact of various economic policy measures on employment will be.

Industrialized countries must now honour the promise and commitment they made over 30 years ago and increase their development aid to 0.7 per cent of their GDP. Sweden has already done this. In addition to increasing the amount of aid, particular attention must be given to improving the quality of development cooperation and international cooperation. Development aid must be aimed at improving the national capabilities of the partner countries. Development aid must lead to self-managed development.

The developing countries need debt restructuring and debt cancellation. However, cancellation must be conditional, and the fulfilment of these conditions must be monitored. Most of the debts in existence today are the result of irresponsible policies and borrowing pursued by autocratic leaders. The debt burden should be eased while ensuring the earlier mistakes are not made again.

International cooperation in taxation must be improved. Supranational development taxes may seem utopian, but international taxation cooperation is surely possible. It would generate more resources for enabling national capabilities, particularly in developing countries.

Translating the Report into a reform movement requires partners. The Nordic countries constitute one such group, the European Union can become another.

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The European Union is a major player in the context of globalization, and there is much that the EU can do to achieve a better, fairer globalization.

We should aim at coherent external and internal action at the EU level so that actions in any one sector would support actions in other sectors and make it easier to achieve targets. As an example, EU trade policy should not conflict with EU development policy. This is easier said than done, and success cannot be achieved overnight. However, this is the direction in which we should be going.

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This year, the world is celebrating the 60th anniversary of the United Nations. At the same time, we are reforming the world organization and assessing our success in implementing the Millennium Declaration. The report produced by Secretary General Kofi Annan provides a good foundation for both these tasks.

The theme running through the Secretary General’s report is the trinity of development, security and human rights. Finland is in favour of this broad concept of security, supporting the key importance of peace, basic rights, human rights, democracy, the rule of law and good governance. A comprehensive vision is required. If progress is achieved in one of these areas, it will strengthen positive trends in the others. We should aim to achieve a ‘virtuous circle’ of development.

Without going into the UN reform process in detail, I would like to point out that the summit meeting next autumn will be a unique opportunity to make the world a better place for our children to live in. In this, we need the efforts not only of governments but of non-governmental organizations and citizens, too. Let us work together to bring about a better, fairer and safer world.