30.9.2014

Pääministeri Stubbin puhe Kööpenhaminassa

Tiivistelmä suomeksi: http://vnk.fi/ajankohtaista

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THE ART OF GOING INTERNATIONAL

Check against delivery

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Mr Chairman,
Prime Minister,
Ladies and Gentlemen,

It is a great pleasure to speak at Dansk Industris Topmøde today. I greatly value your work and the close ties that exist between Denmark and Finland. We Nordics are always a bit like a family.

I also feel privileged to speak in the company of my good friend and colleague Prime Minister Helle Thorning-Schmidt and of course Senator Mario Monti, a true European giant whose work I have always admired.

My speech today is titled ”The Art of Going International”. The theme is important for us all, but especially so to me. I was born in Finland into a bilingual family – I spoke Finnish with my mother and Swedish with my father – and I have lived twenty years of my life abroad – in the United States, Britain, France and Belgium. I am married to a Brit, and our children have dual nationality. All of my studies took place abroad and I got my PhD from the London School of Economics.

Internationalism has always been a big part of me personally. And it has always been a big part of both Danish and Finnish societies. Trade, immigration and emigration have shaped both our nations throughout the centuries.

Today, my plan is to first, consider internationalisation as a global megatrend; second, comment on the European debate on mobility; and third, address how Finland has tried to seize the new opportunities.

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Internationalisation is the megatrend of our time. There are over 230 million immigrants in the world. Tourism generates around 1,159 billion US dollars a year in revenue. Around one billion tourist trips are made in the world each year. More than 4 million students are studying each year away from their home country.

This is a natural result of technological advances and the spread of basic freedoms. More and more people can choose where they want to live their lives – whether it is their birthplace or somewhere completely different. This opportunity should be heartily welcomed.

At the same time, we should not turn a blind eye to those who have been forced to flee their home countries. The number of refugees has exceeded 50 million for the first time since the Second World War. It is everyone’s responsibility to help those in dire need.

Globalisation has given rise to new political divisions. Divisions that have in many industrialised countries partly replaced the traditional concepts of left and right. This is seen in Finland, too. The world is divided into globalists and localists. Globalists see an integrating world as an opportunity, while localists seek to protect themselves from it by turning inward.

There is an on-going debate about the costs caused by immigrants, for example in the social and health care systems. This phenomenon must be set in proportion. Finland, like the other ageing industrialised countries, needs to increase labour supply. And when workers move, often their families move, too. It becomes an economic problem only if these resources are not utilised. All of the work done in Finland – by anyone – is good for the economy. Helsinki would not be built without foreign labour: about one third of those working on Helsinki Metropolitan Area building sites are foreigners.

Obviously, this is not only a matter of labour supply. New people bring new ideas, dynamism, and diversity. Internationalism is the oxygen we need to succeed.

The world cannot be stopped or turned backwards by politicians. But neither should we ignore the questions and worries that immigration brings up. I have been told of a Greenlandic proverb ”Denying the existence of a ghost will only make it grow bigger.” Since it was quoted in the TV series Borgen, there has to be a point – right?

We need to embrace change but also cushion the cultural and economic bruises it might inflict.

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For European integration, free movement is a key achievement. It is the foundation and backbone of the European project.

The four European freedoms – free movement of people, goods, services and capital – are interdependent. They form an entity. It is not possible to develop one freedom and restrict another. Together they form the internal market, our best European policy for economic growth.

Workforce mobility fuels economic growth in regions suffering from the shortage of labour supply. It also alleviates the pressure on social security systems in regions with a high unemployment rate. In that regard, we should rather be worried about the lack of mobility: annually, cross-border mobility in the EU is 0.29%, while in the USA it is 2.40%. While the unemployment rate in some areas of Europe is very high, other areas and sectors are suffering from labour shortages. This prevents growth.

The Single European Market is still far from perfect. In the coming years we need to take it into new areas. We need to make sure that there is a genuine digital single market, a well-developed market in services and capital markets and to realize a European energy market. We need to remove barriers where none should exist.

At the same time, free movement has come under fierce attack. In Denmark, Finland and many other EU Member States we hear voices decrying foreigners. Ten years ago it was mostly the French discussion about the now-legendary ”Polish plumber”, but now we are hearing similar talk almost everywhere.

In the face of such popular concerns, one should stick to facts. The OECD’s latest International Migration Outlook shows that in most cases immigrants pay the host country more in taxes and social security contributions than they receive in benefits. This is largely because they are generally younger than the rest of the population.

Much of the criticism around the free movement of people is concentrated around possible misuse of social security. The cases are rare, but obviously abuses must be tackled. Also, we must improve the compatibility of our national social security systems. For example in Finland, social security is based on residence whereas in most Member States it is provided through employment.

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Speaking of Finland allows me to move to my third point. In three years’ time, Finland celebrates one hundred years of independence. We have always been dependent on international markets as well as on the companies that succeed in them. Openness to the world has created Finland’s modern large-scale industry and enabled Finland to rise economically and socially.

Nowadays, when you look at any comparison of world countries, Finland is almost always ranked among the top three: whether it concerns quality of life, competitiveness, least failed state or least corrupt country. And we remain one of the few countries in the EU to be AAA-rated by all the major credit rating agencies.

Why did this rise come about? Not because we were closed and inward-looking, but because we have opened up. To Europe and to the world.

Currently, the Finnish economy is highly integrated into the global economy. Our exports are valued at just over 38% of Finland’s GDP. Slightly more than half of Finland’s exports go to the EU’s internal market and 45% to markets outside the EU. The integration can be also seen in the increasing number of Finnish subsidiaries – datterselskaber – abroad and foreign ones in Finland. And I am happy to mention that Denmark is among those countries that have invested the most in Finland.

Russia accounts for just fewer than 10% of our exports and was valued last year at 5.4 billion Euros. The recent Russian import restrictions have affected our food exports, as is the case with Denmark. And, just like Denmark, we have brought our producers and companies together to find new markets.

The Finnish technology and forest industries have been declining, but alongside them the Finnish start-up industry is on the rise. The Slush event, to be held in Helsinki in November, has become a leading European investor event, and it was attended last year by 118 international venture capital funds. By the summer, they had made direct investments valued at over 180 million euros in around 1,200 companies that attended Slush from 68 different countries.

The economic success of a country is built on its ability to embrace internationality, and to grasp the major trends driving it: digitalisation, climate change, urbanisation and ageing.

The basis for governments’ actions should be an understanding of today’s business. Even mundane products are the result of global value chains, where one part is made here, another part there, assembled elsewhere, but the greatest value is created in the creative reaches of the process. Production processes once centralised in one place have been dispersed throughout the world. This is why focusing on trade statistics and balance sheets may be misleading.

To better respond to these challenges, we have formed an umbrella for all state-funded organisations doing internationalisation work. This Team Finland network enables the provision of joint services to companies. The Government sets annual priorities for activities, including focus markets and sectors. We have been developing Team Finland for two years now and the first results are beginning to be seen. For example, the Finnish maritime industry has gained a strong foothold in Brazil as a result of cooperation.

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Dear friends,

Man har et standpunkt, til man tager et nyt.

I don’t know if my words have led you to a new standpoint, but I hope to have given some food for thought on three topics concerning internationalisation.

First, internalisation will not be stopped or reversed by political decisions. Turning inward is not a solution in today’s world. Competitiveness, education and openness are Nordic strengths we should use to the full.

Second, free movement of people is an incremental building block of the European Union and also vitally important economically. There should be no new barriers to free movement in Europe.

And third, traditional export promotion is no longer enough; we need a broader perspective. Just as important as exporting products to the world is attracting investment into the lucrative parts of global value chains.

Thank you for your attention.

3 Comments
  1. Stephen Cole
    30.09.2014 20.53

    I hope your wise words will be heard by those who are afraid of the outside world and seek to ”pull up the drawbridge”. No Man Is an Island, no matter how much water surrounds him. Good luck getting Finland working again.

    Reply
  2. Bjarke Koefoed
    30.09.2014 23.17

    Just saw you in Danish television (Deadline)
    I am impressed !
    No nonsense – all just straight forward
    And best off all, well-spoken – best English I have ever heard from a statesman.
    Danish politicians sucks in their English 🙂

    I may not agree with you, but I think you are doing a hell of a job.
    Keep it up 🙂

    Regards

    Reply
  3. Rajat Gaur
    13.10.2014 23.58

    Well connected and written blogpost! I was listening to your interview today broadcasted by BBC, Hard Talk. Almost immediately, having searched your name on Wikipedia, I found this blog in a desire to read more of your views. This is the first article I read (thankfully you do write a few in English too) and can quite understand where you are coming from. Mr. Stubb, the keywords such as education, openness and competitiveness bring a great spirit together, quite like, sports. I look forward to reading more as certainly my appetite for food for thought is big. These rapidly metamorphosising yet great times for Finland and for all bring us together as imaginal cells in a caterpillar, the next stage everybody knows, is a Butterfly.

    With vision, an Indian in Tanzania,
    Rajat

    Reply

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