Speech by President of the Republic of Finland Tarja Halonen at the Nordic Investment Bank’s 30th anniversary seminar in Helsinki on 14 June 2006

(check against delivery) How is the Baltic Sea region prepared to meet the challenges of globalisation

It is really a great pleasure for me to address this 30th Anniversary Seminar of the Nordic Investment Bank. The overall theme of the seminar is very important and topical. I will not try to summarise all the debate, but I would like to share with you my perspective on today’s issue.

We are all members of the global community; we are Europeans and of course citizens of our countries. But I believe that the Baltic Sea region is also part of our identity. All the nations surrounding the Baltic Sea have a shared interest in promoting the development of the region. We have to work together to use fully the potential of the area. We must develop the region as a regional growth centre in Europe, where the aims of competitiveness, dynamic economies, and investing in human resources and in innovation, as well as social welfare must be combined.

We can work together on a wide range of issues. Maritime safety, transport and environmental issues are good examples of areas where the best way to achieve positive results is to act together. In the area of maritime safety, the trilateral Estonian-Finnish-Russian co-operation on monitoring the shipping on the Gulf of Finland is a good example of a joint action. This co-operation contributes to the safety of the whole sea and the region. Focusing on environmental issues and the state of the sea are of particular importance as we try to increase the competitiveness and the economic role of the Baltic Sea area.

I also believe that the region can benefit from the Northern Dimension policy and from the closer relations between the EU and Russia. The Northern Dimension is a common undertaking of all its parties: the European Union Member States, Iceland, Norway, Russia and the European Commission. Its success depends on the active participation of all actors involved, whether at the national, regional or local level, among the business community, or among civil society generally. By definition, the Northern Dimension policy aims at providing a common framework for the promotion of policy dialogue and concrete cooperation. It aims at strengthening stability, well-being, competitiveness and sustainable development in Northern Europe.

A lot of the present Northern Dimension activities focus on the Baltic Sea region. Already now, concrete results have been reached in the area of public health and social well-being and in the area of environment. The Nordic Investment Bank – as you are well aware – has financed some of the key projects such as the Southwest Wastewater Treatment Plant in St. Petersburg. The renewal of the Northern Dimension is one of the priorities of the Finnish EU Presidency. We hope that the transformation of the Northern Dimension into a common policy between the EU, Russia, Norway and Iceland will strengthen the commitment of all parties. Northern Dimension policy is also a regional expression of the overall EU-Russia co-operation framework.

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Globalization is potentially a huge positive force but it is crucial that we focus more on the needs of people. In the global context, the countries of Europe in general and the Nordic countries in particular are among the winners in globalization. All the countries in the Baltic Sea area have had to adapt to harder competition, but we have also benefited from a more open world economy in many ways. We share the same objectives on competitiveness and growth potential. But to be winners in the global competition in the future, we need to increase our investments in human resources, lifelong learning and in research and development.

Finland and the other Nordic countries have based their systems on the so-called Nordic welfare society model, in which stability is created through strong democracy and social fairness. The model combines the interests of the individual and the community. The Nordic countries have every reason to be pleased with how well the countries have done in various international comparisons of competitiveness. Our school systems have been appraised as among the best in the OECD countries, and we have a high level of social protection. Our environmental protection is ranked high in international comparisons. The success of the Nordic countries demonstrates – to my mind – that an open market economy and high competitiveness, on the one hand, and social justice and environmental protection, on the other, need not be mutually exclusive.

In the Baltic Sea countries, we share the same challenge of ageing population. This puts a huge pressure on the labour markets and social services. In order to address these issues, we have a variety of experience of different arrangements from which to draw conclusions for the future. However, we should recognise the invaluable asset that ageing people can provide with their tested and practical experience for our societies and for their younger colleagues. The road to lifelong learning starts with influencing attitudes in the society and in the work places to appreciate age and experience.

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Economists often distinguish the countries in accordance with the stage of their economic development. There are, on the one hand, those countries, which are already technologically advanced, and have a high productivity and high general income level. But these countries also have to bear the heavy burden of front-runners, and therefore tend to grow slowly. On the other hand, there are those countries, which can still benefit from the possibilities of catching-up and tend to have faster growth rates. The question is, how that potential can be turned into sustainable and fair reality. It is largely a matter of people, institutions and policies.

The division between those running in front and those catching up is a useful one, but obviously, it is also a huge simplification. There are a great number of different factors, which will affect our future. We do not necessarily know which will be the most relevant ones. Not many would have guessed – just two decades ago – what kind of a role the information technologies would play in today’s world.

The globe is round and today’s business is global. Even if we think globally, we can act locally and regionally. In the Baltic Sea region, we have to proceed on the basis of our experience so far and be open for new ideas. We need to make lifelong learning a reality for all and we need to increase our investments in innovation. To improve our competitiveness, the results of investing in human resources and in research and development should also be turned into competitive services and commodities. For this, we need world-class companies and also an improved public sector. The ultimate indicators of our success must of course be the well-being of our citizens and societies, which are stable, prosperous and based on social fairness.

Let me finish by thanking the Nordic Investment Bank for organising this event, for all the work that you have done over the past 30 years, and wishing the Bank all the success in the work you will do over the next 30 years, and beyond.