Speech by Minister Ville Skinnari at the Meeting of Heads of Mission on 19 August 2019
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Excellencies, Dear Colleagues, Ladies and Gentlemen,
It is an honour for me to address you for the first time as Minister for Development Cooperation and Foreign Trade.
I have had the pleasure of meeting many of you already during my term as Member of Parliament, and some of you I have met even earlier many times.
My first two months as minister have reinforced my opinion that the Finnish Foreign Service consists of extremely competent and highly motivated people. In addition to you, Your Excellencies, the Foreign Service naturally includes all the Finnish officials and the locals working in our missions abroad as well as all our colleagues here in Finland.
Competent and motivated Foreign Service staff are the greatest resource of the Ministry for Foreign Affairs, and of Finland, in fact. We must look after the people who represent us abroad, because we need all hands on deck to advance of Finland’s objectives.
Ladies and gentlemen,
Finland wants to find solutions to global problems.
Global trends such as climate change, digitalisation and urbanisation will be the drivers of change. The key to our success as a dynamic and thriving Finland will lie in our ability to tap into the opportunities that this change creates.
Finland wants to promote open and fair trade. We must do our share to keep the EU open to international trade.
Finland will devote significant resources to development aid during this government term. We will create a roadmap for reaching the 2030 Agenda goals. We will also prepare a comprehensive Africa strategy, which will promote the building of partnerships with African countries.
Finland will support the promotion of exports. With our external economic relations, we can help Finnish SMEs especially tap into international growth. We want to place a stronger focus on internationalisation services that are linked to innovative ecosystems.
Finland will also invest significantly in funding for innovation and in making labour migration easier. We will collaborate closely with public and private operators to prepare an exports and international growth programme across traditional sectoral boundaries.
By engaging in international demand-driven ecosystems, Finnish companies, research institutes, higher education institutions and other educational institutions can work together to create new business and cutting-edge innovations. In this way, we can significantly strengthen the growth of Finland’s foreign trade.
These measures and decisions can give an additional boost to our national economy and thereby help grow our exports. The outcome can be new kinds of innovations that help Finland solve global problems.
We have also the opportunity to build Finland’s country brand as a global leader in skills and innovation.
I have had a fast-paced start to my term as minister, and I have already been to Abu Dhabi, Geneva and Brussels, among other places. In the course of the autumn, I will be travelling to our neighbouring countries and even further afield.
In the first months of my term as minister, I have had interesting discussions with Director-General of the WTO Roberto Azevedo, UN Deputy Secretary-General Amina Mohammed, Sweden’s Minister for Foreign Trade Ann Linde and the Cambodian Prime Minister Hun Sen, among others.
When Finland hosted the College of European Commissioners in Helsinki at the start of July, I had the opportunity for in-depth discussions with many commissioners, including the Commissioner for Trade Cecilia Malmström.
Finland’s Presidency of the Council of the European Union gives us a vantage point to influence the EU’s activities. When I was in Brussels, I soon realised that this autumn our audience will be Europe, at the very least, and at times even the whole world.
I will be chairing the meetings of foreign trade and development ministers and attending European Parliament hearings, of which the hearing on development policy has already taken place.
We will be facing major global challenges in the near future, which will also have a significant impact on Finland.
These challenges are linked to four big issues on the EU agenda: - developments in trade policy - preparing the EU’s long-term climate strategy - adopting the next multiannual financial framework and - Brexit, of course.
The United Kingdom’s withdrawal from the EU has wide-reaching effects on European politics and economy.
As we all know, Boris Johnson as the new UK Prime Minister aims to renegotiate the terms of the withdrawal agreement.
The EU’s stance is clear: the agreement will not be reopened. However, the Political Declaration on the future relationship could be amended if there was a constructive change in Britain’s stance.
The discussions on Brexit will be stepping up in September at the latest, the current withdrawal date being 31st of October. There is a slight chance of an extension, if need be, but I regret to say that the risk of a no-deal Brexit is now higher than before.
The authorities in Finland are prepared for all scenarios, and there is a lot of information available on the potential impacts of Brexit, covering all administrative branches. While a hard Brexit can still be avoided, companies should be prepared for it nevertheless.
The estimated negative impact of a no-deal Brexit on the Finnish economy is between 0.1 and 1 per cent of GDP. This means that we would be slightly less affected than some other EU countries. Yet the impact on individual sectors and companies could be much greater.
Whatever the outcome of the Brexit process might be, it is important for us that cooperation and relations with the UK remain close. In many respects, the UK will continue to be a key partner for Finland and the EU.
In trade policy, we are dealing with major topical issues, especially in trade relations between the United States and China and between the United States and the EU.
There is more and more concern about a possible trade war. This is naturally regrettable for open economies such as Finland. It is paramount that the EU and the United States manage to avoid escalation of the situation. Unfortunately, however, there is a real threat of a confrontation.
If President of the United Stated Donald Trump decides to impose tariffs and other restrictions on the car industry, the EU will do the same. The ongoing battle between Boeing and Airbus is part of the problem.
Finland emphasises that we all benefit from a prosperous transatlantic economy. Instead of confrontation, we should deepen and develop our relationship.
It is important that the EU and the United States are able to modernise trade rules together. It would help both sides to better respond to even other challenges.
On some issues, the EU and the US are still able to cooperate, but I regret to say that the negative agenda is overshadowing all positive developments.
Another important topic is our stance on China. It is mainly about the power struggle between the United States and China, but it concerns also our own interests in many ways.
While China is an important partner for Finland, it is also our economic and systemic rival, who sometimes employs less than fair means.
We share the concern of many other countries that China has unfair practices on industrial property rights, state aid and other trade measures. It is also an issue of China possibly pursuing other ends.
In Europe, too, we must seriously consider how to deal with China. For trade especially it is important that the playing field is as equal as possible.
Another topical trade policy issue is the crisis of the WTO.
For countries such as Finland, it is important that trade is as open as possible and that common rules are respected. Now, however, the rules-based system is being tested in unprecedented ways. Unfortunately this is being done by one of its founding members.
It is true that for a long time multilateral trade negotiations have produced only meagre results. It is also true that the crown jewel of the WTO, its dispute settlement system, is at the brink of paralysis. Nevertheless, the WHO remains the cornerstone of international trade with its basic trade rules and its mechanism for overseeing compliance with them. That is why it would be bad for all of us in the long run if we let it disintegrate.
It has been clear for a long time already that we need to reform the WTO, but it has been extremely difficult to get to the stage of implementation.
I sincerely hope that the current crisis will result in a reform of the system and not in its gradual dismantling. The EU has a key role in finding solutions and defending the system. I discussed these issues at length during my visit to Geneva in early July.
To counterbalance these issues, I would like to mention some positive news on the trade policy front.
The EU signed a free trade agreement with Japan and reached a political agreement for a trade agreement with Mercosur. They give us hope in the midst of current protectionist pressures.
The EU-Japan agreement especially is a significant achievement in both its scope and content. The combined gross domestic product of Japan and the EU, accounting for nearly a third of the global GDP, gives a good idea of the agreement’s scope.
The agreement will improve business opportunities in Japan even for Finnish companies and make Finland more attractive for Japanese companies.
There is a lot of growth potential also in countries that have recently been negotiating free trade agreements with the EU. Last year, Finland’s goods exports grew significantly to three countries: - South Korea by 23 per cent - Canada by 17 per cent and - Japan by 14 per cent.
While this does not mean that there is an absolute causal relationship between free trade agreements and growing exports, the figures do indicate that growth potential exist.
The Mercosur agreement is still being finalised, and therefore its details are somewhat unclear at the moment. When the agreement takes effect it will open new business opportunities in markets that by tradition have been relatively closed.
On the topic of trade policy, I would also like to add that we must consider how our agreements affect the environment, sustainable development, equality, workers’ rights, and the rights of women and girls.
Ladies and gentlemen,
Let me say a few words about the promotion of exports.
The Team Finland concept has gradually taken root, and it is getting better known in the business world. My understanding is that collaboration among Team Finland actors has intensified and functions now well in many missions. Thanks to you, Your Excellencies, and your staff. The practice of appointing Heads of Mission as local leaders of Team Finland seems to be working.
However, in a rapidly changing world we cannot be content with the status quo. That is why we need to find better ways to serve the Finnish business community. I am convinced that good team spirit and hard work will get us there. Finland is after all an export-led economy, and that is why our exports promotion efforts must be successful.
The current rapid and multidimensional transformation makes it even more important that we understand the nature of change and are able to help Finnish companies tap into the emerging opportunities.
In addition to traditional exports promotion, we must build new platforms and ecosystems that help Finnish companies make it internationally and engage in demand-driven ecosystems. This requires vision and agility from both private and public operators.
Essential elements of publicly funded exports are an unbroken chain of services and services delivered close to clients. Both at local and at international level, we must find seamless ways to help companies become more international.
For our network abroad, there is a service process for Finland’s missions and Business Finland’s export centres and it is already been applied in practice. Even this collaboration is working well.
We must be able to raise the share of exports in gross domestic product. At the moment, it is below 40 per cent, compared to Sweden’s 47 per cent. Finland must get up to at least the same level.
Ladies and gentlemen,
As you certainly know, the current government is set to make considerable increases to development funding.
We have chosen this policy to shoulder our responsibility as a wealthy country, and it is in our own interests, too. Problems have not known boundaries for a long time already – if ever. At the same time, the growth in resources means that we have an ever-greater responsibility to ensure their effective and correct use.
Today, August 19th, we celebrate the tenth anniversary of World Humanitarian Day. The theme chosen by the UN for this year is the promotion of the status and role of women in humanitarian aid. It is a welcome theme for Finland. Recent years have seen a substantial surge in humanitarian needs, and no change is expected in the coming years because of prolonged conflicts and climate change.
The Finnish Government endeavours to relate its aid, even more effectively than before, to Finland’s strengths and to invest in increasingly strategic development cooperation.
Finland’s development cooperation focuses on priority areas that are built on values and strengths and set the guideline for all our action and the allocation of funding. Such priorities include:
- Improving the status and rights of women and girls.
- Strengthening the economic foundations of developing countries, and job creation.
- Democracy, well-functioning societies and high-quality education.
- Climate change and natural resources.
All action should also observe the following cross-cutting objectives: gender equality, realisation of the rights of vulnerable persons and minorities and their inclusion, and climate change.
The effectiveness of development cooperation is one of the keywords that I shall regularly highlight in my own work. We endeavour to find new ways of doing things in this respect, too. A case in point is the relocation of the UNOPS Social Impact Investing Initiative (S3I) from Copenhagen to Helsinki.
The goal of this Initiative is that billion-euro projects will attract private finance to help achieve Sustainable Development Goals. The focus of the S3I is on major infrastructure projects in three sectors: renewable energy, affordable housing, and health.
It has the role of a project developer, making projects suitable for investment and thereby attracting private investor finance. This UNOPS programme has considerable potential in terms of Finland’s development policy and export promotion goals.
A week ago, I had the honour to sign the agreement for the establishment of S3I, and I would now like to extend my thanks to the top experts of the Foreign Ministry for their excellent work in bringing this programme to Finland.
As I already mentioned, it was agreed in the recent government formation negotiations to draw up a roadmap for achieving the 2030 Agenda’s goals. This work also involves an effort to increase development cooperation appropriations to 0.7 per cent of GDP in the future.
Moreover, Finland wishes to reinforce the gender perspective in development cooperation. In line with EU policy, Finland aims gradually to ensure that 85 per cent of its new programmes include objectives for the promotion of gender equality and that gender equality will be mainstreamed across development cooperation.
Work on the roadmap will begin this autumn, and the principles of policy coherence and effectiveness, referred to in the Government Programme and applicable across parliamentary terms, will be integrated into it. In that effort, I welcome a broad-based working method that takes account of the views of stakeholders, as was the case when drafting the programme for export and international growth.
Achieving the sustainable development goals (SDGs) requires not only public measures but also substantial private investments in developing countries’ climate actions and in their promotion of equality and creation of decent jobs in these countries. In its own development policy and when acting within the EU, Finland must strive to encourage both private funding and corporate involvement in investments that promote sustainable development in the developing world. I therefore believe that the use of investment-based instruments will increase in the future.
We also have to create new ways to mobilise private money more efficiently and more extensively. At the same time, we need to create replicable concepts helping to promote development in a sustainable manner. This is where open-minded and fresh thinking comes in. For example, could an event organised in Africa along the lines of the Slush concept make a successful contribution to the objectives of both development policy and export promotion in the future?
Drafting an Africa strategy is a major exercise laid down in the Government Programme Africa’s significance as a neighbour and strategic partner of the EU is growing, for obvious reasons.
We should therefore develop an all-encompassing strategy that can guide our actions in the long-term perspective.
Africa is an important development policy priority for Finland. We should not forget that the ongoing transformation on the African continent means that its relations with Finland and the rest of the world are also in transition. There are major differences between the different regions in Africa. While the continent boasts some of the world’s fastest-growing economies, there are also African countries where population growth, climate change and urbanisation are real problems that call for rapid solutions in many sectors.
By the middle of this century, an estimated one quarter of the world’s inhabitants will be Africans. Against this background alone, the African continent has such importance that no one can ignore it.
The African market already has much to offer to Finnish companies. As for the future of Africa, an interesting development scenario has to do with the strengths of Finnish companies, notably digitalisation and the circular economy. A large share of African countries have not yet managed even to embark on a carbon-intensive development path, whereas a significant part of the rest of the world is now trying to break away from that path. Good partnerships with African countries can therefore help Finnish companies to enter an international growth path.
Africa has indeed the capacity to create enormous commercial opportunities. The interesting question here is, of course, in what kind of societies Africans want to live in the future. Finnish private and public sector actors would certainly have a lot to offer to Africa in this respect.
However, when trying to enter the African market – or any market – we should not be naive. The challenges of the business environment on that continent are real. They include, in some African countries, weaknesses of legislation and administration, a prevalence of corruption, an over-indebtedness of the economy and crumbling social stability. Risk management and deal-making call for a lot of traditional legwork to find reliable partners, develop solutions tailored to local circumstances and secure funding.
Ladies and gentlemen,
Let me finish with a few words about Finland’s role in a changing world.
The new Government Programme states that Finland, as a small country, must be globally influential. This ambitious goal has significance not only for Finland but also for the entire world.
It may sound like a grandiose statement that Finland is genuinely working for sustainable development and striving to bring about a more just world.
To say that the Government Programme and our work are based on values are not just empty words. It is in our own interests to look after our relations extensively, be it with our close neighbours or with countries that are more distant. Accordingly, we will expand our network of missions during the current parliamentary term.
A world that respects common rules is in our interests. It is the opposite of a world where the right of the strongest rules. In this ‘Big Game’, the EU is our main reference group. The current Presidency allows us to exert more influence within the EU than usual. Our goal is to strengthen the EU both as a community of values and as an external actor.
Finally, I would like to readdress the prerequisites of Finland’s success. Some of the key themes are inter-sectoral cooperation, a close partnership between the private and public sectors and the wellbeing of the staff of the Ministry of Foreign Affairs.
Achieving results in these matters requires cooperation not only across organisational boundaries within our Ministry, but also between different administrative branches and between representatives of the private and public sectors. Yet the key to success lies, above all, in a healthy and well-motivated personnel.
We can only succeed if we act as a team. Acting as a team takes common will and collaboration, and all team members must feel that their input is valued. As a minister, I intend to guide our organisation in this direction, and I expect the same from all my colleagues in superior positions.
The Ministry for Foreign Affairs must continue to act as an excellent employer for its staff. That is the only way that will allow us to manage matters well at present and in the future.
Finland has a tremendous growth story. We are particularly well known for our education system and expertise. I keep encountering these themes whenever I visit other countries. Non-discrimination, equality and the Nordic welfare model are other themes often linked to Finland.
Moreover, the fact that Finland has been found to be the happiest country in the world for two consecutive years tells the narrative about the strengths of Finnish society and continues to attract enormous interest among other nations. Let us build the next chapter of Finland’s success story on these achievements.
Thank you for your attention.