Speech by the President of the Republic of Finland




SPEECH BY PRESIDENT MARTTI AHTISAARI AT A SEMINAR ON LOCAL AND REGIONAL ADMINISTRATION IN TAMPERE ON 9.11.1999

EFFECTIVE ADMINISTRATION, PART OF FINLAND'S COMPETITIVENESS


During its independence Finland has constantly faced and dealt with great changes and challenges. Now on the verge of a new millennium we are going through another challenging transition. Its key factors are integration, globalization and the birth of the information society.

Integration and globalization decisively increase competition between economies and nations. At the same time they require new skills for increasingly diverse interaction and cooperation. These issues are being considered around the world at this moment. I myself discussed them last week in a speech which I gave in Paris, for example. The significance of administration was also emphasized there.

Public administration has had a key position and task in building and developing Finland and in dealing with previous changes and challenges. In implementing legislation and exercising authority administration has strongly regulated and guided the lives of individuals and organizations. Administration has also been an active developer of society.

But what is the role and task of administration in an integrating and globalizing market economy and the information society? It is obvious that administration must adjust. Administration is in fact changing in Finland. Many factors require the continuation and deepening of this process.

Citizens' attitude towards administration has become more demanding and critical. People who are better educated and have greater knowledge and skills than before want to decide for themselves on their own affairs and do not need help from the public sector for this, at least not to the same extent as in the past. People still expect and demand basic security and justice from society, however.

An enormous change has taken place in the economic rules in Finland in just a short time. With the freeing of the movement of capital and the gradual removal of obstacles to competition, the regulation of economic life is no longer the task of the public sector in the same way as before. This does not mean that the economy does not need support from administration, however.

In addition to traditional infrastructure, business is increasingly dependent on the availability of information, on trained labour and the results of scientific research. The availability and quality of the services required by corporate personnel as well as the quality of the living environment have an effect on where firms locate operations. The lowering of borders and increasing freedoms have led to a rise in crime and other disturbances so that more attention will no doubt be given to the safety of firms' and employees' operating and living environment in the future.

In the middle of changes and upheavals it is essential to remember basic facts and values. These include justice. One of the state's basic tasks is to ensure the equal treatment of people and as part of this particularly to take care of the disadvantaged. Only a society based on justice can be efficient and strong. This is also a fundamental idea in European integration.

The cohesion policy which is one of the European Union's key principles is based on the old truth that the whole is only as strong as its weakest link. It is therefore important to bring living conditions in different parts of the Union closer in line by supporting development particularly in weaker regions. By improving the living conditions of the disadvantaged and by ensuring justice we can increase the entire Union's internal cohesion and thus strengthen the Union as a whole.

Although citizens' confidence in present democratic institutions has also weakened in Finland recently, democracy and people's opportunities to participate in the political system have a fundamental significance for the development of human communities. This has also been observed in development cooperation. Sustainable development does not appear possible without democracy. Reforming institutions and they way they operate is a great task in our hands in many nation-states as well as the European Union.

Administration thus faces demanding challenges in Finland. On the one hand its task is still to maintain and strengthen a democratic, just and safe society. On the other hand administration is changing from a regulator and director of people and life and an active developer primarily to a creator of a good operational framework and a supporter of people's own enterprise. This change must be carried out in the midst of tightening competition between nations and economies, in which the competitors are also cooperation partners. This contains plenty of challenges in itself. But the need for change is even greater still.

The information society, as we are able to evaluate it today, imposes its own special requirements on the public sector and administration. I will try here to outline a few of these requirements. It is in the best interests of both society and administration that additional emphasis is being placed on the consideration and development of administrative models and operating principles in the information society.

In my tasks during the past decade I have closely followed the change in our administration. A great deal has been accomplished, for which credit is due above all to administration itself. To you, ladies and gentlemen. There is still work to be done, of course, and in one respect we are only in the early stages of reform, especially if we consider the matter from the viewpoint of the information society. I refer to the hierarchical structure and nature passed down from the past.

There is presently a tension between administrative organizations and their environment. Information flows without regard to hierarchical relations. Administrative practice, however, has still not changed decisively, since the hierarchical structure is deep in our way of thinking. The weakening of hierarchies is also intensified by the development which is known as networking.

Networking means increasing and diversifying cooperation between different actors. This type of development is indispensable in a world where everything depends on everything else. In Finland as well administration has faced this situation and is already responding to it. Regional policy is conducted nowadays both nationally and as part of the European Union's structural and regional policy in close cooperation with regional-level officials and other actors, in networks. At the local level cooperation between the municipalities has increased, albeit too slowly.

The information society leads to the removal of hierarchical structures. Administration should devote real attention to controlling this process. This transition period contains enormous opportunities. The creativity and initiative of citizens and the administrative levels closest to their needs can be made to serve the common good in a new way and with new strength.

The task of administration is to take advantage of the opportunities offered by new technology so as to improve the availability and quality of public services and to get people on the margin involved in services, social activity and human interaction.

The information society also offers administration new opportunities to support balanced regional development. With electronic communication and with administrative matters tied less to time and place, administrative functions can be thoughtfully located in different parts of the country. I also challenge you to accomplish this task, forgetting traditional hierarchies. Working in local and regional administration, you can serve as the initiators and a force for change in this development.

Electronic communication has naturally provided opportunities to speed up administrative activities. The partial dismantling of hierarchical structures creates the preconditions to lighten administration and thus increase its efficiency. As we all know, Finland is on the cutting edge in the development of the information society in practically every category, including public administration. Here we hold a national trump card with which we can improve the competitiveness of our enterprises and our entire economy.

What does administrative efficiency mean in this connection now and in the future? Cost effectiveness is an increasingly important part of administrative efficiency. The smaller a portion administration takes from what we produce as a nation, the more we can invest in activities which will improve our competitiveness and build the future, such as research and education. Our administration could be made still more efficient.

The international competitiveness of administration is not just cost effectiveness. The traditional strength of Finnish administration, reliability, is still valuable currency today. Internationally Finns have a reputation for being honest and reliable people. Since these same characteristics also apply to our administration, we must hold onto them firmly and must also build our international competitiveness on this basis. It is excellent that discussion concerning values and ethical matters has got under way in our administration.

Administration nowadays must be much more flexible and responsive than in the past and must be able to adapt to change and renew itself. This is certainly not one of the easiest new challenges. We are used to considering strict formal requirements as guarantees of legal security. We must hold onto legal security, of course. Its guarantees in the future will be, above all, officials' strong expertise and the high quality of activities.

I encourage you to make determined and effective progress on the often stony and thankless road of reforming administration and its operating methods. One problem on this road specifically in the information society is the relative timing of costs and benefits. New information technology requires large economic investments. Basic investments are expensive. It often takes a long time before benefits can be reaped in full.

Electronic business is becoming part of our public administration. Here again we are on the cutting edge internationally. Our public administration is also doing well in comparison with the private sector in this regard. Many countries are carrying out broad programmes to make extensive use of electronic communication in administration, however. Finland is in a good position to maintain its excellent competitive position, but this requires additional investments. In my opinion now is the right time to prepare and start a programme to ensure the effective development and implementation of electronic business in administration. This would also be the right kind of national regional and cohesion policy.

We should not keep quiet about the achievements of our administration. Our developing administration has many competitive export products. For example Finnish local democracy, municipal administration, could be a major Finnish contribution to European and even broader cooperation.

It is important for our administration and officials to participate extensively and even more actively in work aimed at building democracy and democratic administration in the countries which have applied for membership of the European Union as well as other countries.

I wish all of you separately and together success in your work in today's administration and its constant renewal.