Opening statement by Foreign Minister Erkki Tuomioja at the Helsinki Conference 2002
Excellencies, Ladies and Gentlemen,
Globalisation is a continuation of the historical process of internationalisation, which has increased the economic and political interdependence of countries. Through a deepening international division of labour, it has contributed to increasing wealth and welfare for almost everyone involved.
Globalisation has added new qualitative and quantitative dimensions to this long process. This is mainly due to the revolutionary development of new technologies, particularly in the information and communications sphere. To my mind, this is why we now see globalisation as something new rather than another phase of internationalisation.
There is another factor which is seldom given the recognition it deserves: namely the growth of world population. After the Second World War, world population has grown from 2.4 billion people to over 6 billion today, and is set to grow to at least 10 billion before levelling out.
This is a fundamental challenge for achieving a balance between human activities and our natural environment. But it also profoundly challenges the way human societies – the nation-states of today's world – interact and conduct their relations.
The way we managed the world during the era of internationalisation was far from perfect. Repeated famines, conflicts and wars bear witness to the shortcomings. But in the new era, failure in global management could bring about disasters which could threaten the very existence of the civilized world.
Recent events have served to demonstrate the fragility of the global system, both economically and politically. There is a growing demand for improved global governance, yet major concerns exist on the future of the multilateral approach to tackle imminent risks.
In the globalised world of today, I venture to assert, the notion of national interest has profoundly changed. No country, regardless of its size or power, can successfully pursue its national interests at the cost of others. There is no real alternative to recognising interdependence and resorting to multilateral solutions.
The need to seek solutions to this dilemma has motivated the organisers to convene this Conference. We have invited participants from all the key stakeholder entities: governments, civil society, international organisations, scholars and business. All participate in their personal capacity. The organisers will not hold their organisations responsible for the opinions expressed in the course of the debate.
The Helsinki Conference aims at being a working conference with a pragmatic agenda. My Government hopes this conference could mark the beginning of a process focussing on a number of key areas of global governance. We want to hear your concerns, ideas and suggestions. We hope the discussions today and tomorrow can lead to practical and constructive suggestions for future action.
Global governance issues can be broadly divided into four areas:
· first, the environment;
· second, crisis management and conflict prevention;
· third, human rights, democracy, rule of law and good governance; and
· fourth, sustainable development and trade.
Obviously this is a very sketchy division. None of these areas can be dealt with in isolation without taking into account other areas as well. This should be kept in mind as the bulk of discussion themes deals with the last two of these areas.
Let me take a closer look at three areas of concern: the value basis of global governance, global economic governance and poverty. These areas are interlinked and call for action. I will take up some key questions and issues within each of these topics.
Values constitute the foundation of human existence and interaction. Identification of common values is especially important when constructing new structures shaping human well-being. Confidence and trust are key elements of any human construction. Values are crucially important in systems of public governance in which power is yielded.
The value basis of global governance institutions needs to be discussed. We must seek values which can unite people in different parts of the world. We need a shared value base respected by all to serve as a foundation for governance. By ignoring the universal demand for fair, just and equal rules, a level playfield, we ignore people's desire for dignity and development.
Democracy, justice and rule of law are recognised as key elements in good governance. In international relations, multilateralism, interdependence, distributive justice and North–South responsibility are core principles. It is not simple, however, to apply these principles in the practice of global governance.
A sound and functioning economy is a key requirement for human dignity and prosperity. But for sustained economic growth to happen, a stable governance environment needs to be in place.
The global partners are jointly committed to continued trade liberalisation, as witnessed by the WTO Doha negotiations. But this has its pitfalls. Trade liberalisation should not be driven by short-term market considerations and the interests of large multinational corporations, lest the process turn against itself through increased mistrust and instability. In the age of globalisation, trade must not only be open but also fair. There must be mechanisms in place to address legitimate concerns about the environment, labour standards, local and minority cultures and communities, human rights, social inclusion and the right to development.
Global economic governance is marred by a crisis of confidence. The crisis stems from imbalances in decision-making on global issues. Globalisation is seen to unduly benefit the global elite. Poverty, accompanied by social instability, is on the rise. Frustration and desperation follow in its wake. The undemocratic and inappropriate aspects of global governance must be urgently addressed before mistrust erupts.
Secondly, global economic governance.
A key aspect of our discussions is the need for a new economic architecture. In 1998, the U.S. Secretary of Treasury introduced the idea of "a new global financial architecture". But little has happened. All serious efforts to do something about this core element of economic stability and growth have failed. It is now a matter of urgency to seek solutions to governance problems.
Rapid growth of international trade, financial flows, direct investments, migration and communication flows over the last decades have sharply boosted global interdependence. They seem to have increased the scope for intervention by global institutions. But globalisation has, in effect, reduced the effectiveness of the interventions by global institutions. At the same time, a need has been created for new kinds of interventions. Global institutions have experienced a gradual erosion of their capacity to govern.
For several years now, an widening gap has emerged between the nature of the global economic challenge, on the one hand, and the ability of international institutions to govern, on the other. The instability experienced by the international financial system reflects the characteristics inherent in financial markets. It also points to flaws in the international financial architecture with regard to the prevention and management of financial crises. These shortcomings have been particularly costly for developing countries.
Another aspect of global economic governance is macroeconomic management, for which there is virtually no institutional framework. It is left almost entirely to existing market mechanisms. This is clearly not enough. Short-term market interests tend to turn against themselves. They may even facilitate a serious deterioration of the frail beginnings of a governance system. Joint international mechanisms must be put in place to enhance favourable conditions for sustained economic growth.
As a recent study by WIDER (World Institute for Development Economics Research of UN University, based here in Helsinki) concludes, the conception and design of a new architecture should focus on financial crisis prevention and crisis management. But it should also support the integration of developing countries into the world economy in a manner that promotes rather than hinders development.
The third aspect of global governance is the interplay between corporate self-regulation and the international system of rules, standards and guidelines. The open global market has boosted forces of globalisation, with international trade and investment as its cutting edge. But there is no mechanism for these players to regulate themselves, or for the international institutions to set standards for corporate behaviour. If it is done at all, it is left for the market forces themselves: multinational corporations and those responsible for foreign direct investment (FDI).
The time has come to consider possibilities for an international system of governance for multinational corporations. The reason for this is obvious: their economic activities have long since transcended national boundaries.
I believe this effort to be in the enlightened self-interest of international business itself. Companies are struggling to achieve stability and sustained growth in the global market. We should aim at creating a solid partnership amongst multinational business, various other non-state actors and the system of states to promote global governance.
In this context, the contribution of multinational businesses to development and their role in emerging global governance mechanisms should be addressed. We should pursue an institutional framework for global governance which would create an interface between international obligations set by states at international forums and self-imposed corporate policies.
This idea is interlinked with various initiatives for promoting restricted business practices and codes of conduct, corporate social responsibility, enhanced environmental and labour standards and human rights. All this calls for co-ordinated action with participation from businesses and other stakeholders.
Third, finally, poverty.
The ultimate objective of global governance is to ensure decent living conditions for people. We are motivated, besides considerations of basic human dignity, by an understanding that the security of states is interlinked with and, indeed, indivisible from the security of people.
Human suffering, poverty and the lack of political influence are closely interdependent. This notion is also relevant in the global context. Unless this problem is addressed, there is a danger that emerging global governance mechanisms will fail to address crucial problems. Sufficient emphasis is needed on economic development in general and the eradication of human poverty in particular.
Institutional arrangements are needed to give poor nations a bigger voice in the process of global governance. Furthermore, the governments of poor nations themselves have the obligation to become true representatives of the weakest of their own citizens on the global level. These are key requirements of a robust design for global governance.
Excellencies, Ladies and Gentlemen,
By convening this Conference, the Finnish Ministry for Foreign Affairs hoped to provide an open forum for critical discussion. But we should not be content with talking. We should aim at creating tools for serious, practical, goal-oriented action. This is a huge undertaking. Everyone's commitment and contribution is needed.
I believe we have entered a period of fundamental sea-change in global relations. The Millennium Declaration adopted by the UN General Assembly, followed up by the subsequent conferences in Monterrey and Johannesburg, have outlined a new global agenda. But this ambitious agenda is worthless if it is not implemented. We hope the Helsinki Conference can give a modest contribution to the process for global transformation and enhanced human well-being.
The decision to convene this Conference was motivated by a desire promote a better understanding of changes on the global level and a conviction of the need for governments to intervene. We hope this Conference could mark the beginning of a serious search for practical results. A strong commitment from all stakeholders is needed if we wish to succeed.
Global institutions are impeded by growing mistrust. All of them are implicated: not only WTO, IMF, the World Band and the UN, but also governments, business and even the civil society. We have to find ways to overcome this mistrust. We see this Conference as an opportunity to seek balanced, equitable solutions for the deficiencies of global governance.
By hosting this Conference, the Government of Finland, it goes without saying, does not aim at hijacking the political agenda. We do not seek credit for eventual successes, be they modest or more substantial. Instead, we hope to provide a forum for dialogue, ideas and innovative proposals. We are looking forward to hearing your substantive contributions as well as you comments on how to continue the process.
Obviously, there is a wide spectrum of opinion on these matters. Differences must be respected. We have to be constructive. But we should also see critics as messengers of those who suffer and who feel the shortcomings of the system. We must listen to them.
As Mr. Martin Khor stated in his paper for the organisers,
"It is, thus, very timely and relevant that the Helsinki Process on Global Governance is taking place. The... various problems – economic, financial, trade, development, peace and security, environmental – are all connected to the clearly inadequate and often damaging systems of global governance. The reform of these governance systems is urgently needed, now more than ever, to prevent a series of catastrophes that could well occur in the next few years.”
Many of us, as players in the system of global policy-making, have felt the absence of adequate mechanisms for dialogue and partnership. We hope the Helsinki Conference might serve this cause.
I thank you all for coming to the Finnish capital. We appreciate your willingness to be here to launch a new Helsinki Process on Globalisation.