Speech by President of the Republic of Finland Tarja Halonen at the Saint-Petersburg International Economic Forum on 13 June 2006

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It gives me great pleasure to address this distinguished audience of representatives of different spheres of political and economic life from countries all around the globe. What could be a better place for us to meet than the beautiful city of Saint-Petersburg - Russia's western gate to the rest of the world and Europe's window on its increasingly important partner Russia.

Fostering ties between the European Union and Russia will be among the priorities of Finland's EU presidency during the second half of this year. Finland's historical links with Russia have given us unique knowledge of this country and its people and we follow with positive sentiments the rapid economic growth of our neighbour. Of course there is an increasing interest in Russia also in other EU countries. Today Russia is among our biggest trading partners and Finnish investment in Russia is growing. Our bilateral relations are based on close cooperation and we share the common goal of securing economic growth and prosperity in our region.

Prosperity and well-being of people, I am sure, are what we all want for our societies. Today we are going to devote a great deal of time to the constituents of global economic development - among them natural resources like energy. Energy has been one of the most heatedly debated subjects on different international fora during the recent months. Energy is and will remain also on the EU agenda as we are trying to develop Energy Policy for Europe and a strategy on external energy relations.

It has been rightly pointed out that as long as there is a seller and a buyer for energy there is interdependence. Furthermore, I would like to emphasise that this interdependence is a mutually positive thing. Energy resources - as vast as they might seem to our generation - are nevertheless limited. There is an urgent need to work together to counter climate change by reducing emissions, developing energy saving, cleaner technologies and by developing renewable energy sources.

While speaking about economic development and energy, I would, anyhow, like to highlight the overriding importance of human resources. An educated and skilful human being is an excellent resource. Finland provides an example of a country that apart from forests did not possess significant natural resources and industrialized only in the second half of last century. Yet Finland has developed from a relatively poor, agricultural country to a knowledge-based society with leading know-how in information and communications technology, metal and engineering and an excellent forest industry.

Finland’s example shows that a Nation State and national actions still matter. The basic requirements for a modern state are democracy, respect for human rights and the rule of law. Also a vibrant civil society, including social partners and a vigilant media are necessary for a modern and successful nation. Political and social discussion is sometimes very colourful, but it also supports development.

In Finland we are, however, very aware of the fact that present success does not give any guarantees for the future. This is why we emphasise the importance of quality education for all. We are developing lifelong learning and invest as much as 3,5 percent of the GDP in research and development activities. Innovation is also among the sectors where Finland and Russia are looking for new forms of cooperation.

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During the last ten years globalization has changed the economic geography of the world and made countries compete for investment. Some emerging markets like the BRIC countries (Brazil, Russia, India, China) have done extremely well in attracting investments. It is important to note that global companies make their investment decisions independently. The different elements of a final product like finance, technology, labour, components and subcontracting are brought together from different parts of the world according to availability, price, logistics and many other factors. Whether governments want it or not, the fact remains that in this competition those countries will prevail that can offer companies a predictable legal environment, a level playing field and investment guarantees.

Although all countries have sensitive sectors of economy one might argue that in general open economy has proved beneficial for economic development as it allows latest technology and know-how to enter the market and creates competition. At the same time it is necessary to manage the negative effects of adjustment processes. The negotiations within the WTO framework permit all participants to contribute to the process according to the level of their development. The Doha development round is entering a decisive stage and, hopefully, a consensus will be reached. This would enhance stability in the global economy and strengthen the multilateral trading system. It goes without saying that Finland and the whole EU look forward to welcoming Russia among the members of this important decision-making body.

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We have gathered in Saint-Petersburg at the time when the city prepares to host the summit of the G8 next month. Saint-Petersburg is by far the biggest and in many ways very important city in the neighbourhood of Finland. We have a genuine interest in the development of Saint-Petersburg and we want to be part of that development, whether it concerns new Technology Parks, waste water treatment, tourism, culture or any other walk of life.

Russia is a prominent partner for both us Europeans and our friends in other parts of the world. The two days ahead will provide the participants of this notable event with an exceptionally good opportunity to get an insight of the Russian economy and maybe come up with ideas for new forms of cooperation. Let me take this opportunity to wish you a productive and pleasant stay in Saint-Petersburg.