Maailmanpankin arvion mukaan maailmassa tarvitaan 350 miljoonaa uutta työpaikkaa seuraavan vuosikymmenen aikana, ministeri Hautala totesi UNCTADin “Trade and poverty reduction” -keskustelussa. Hän muistutti vihreän talouden olevan yksi tapa kestävään köyhyyden vähentämiseen. [:]Speech by
Minister for International Development
Ms. Heidi Hautala
at UNCTAD XIII Panel Discussion:
“Trade and poverty reduction: The missing links”
on 22 April 2012

1. One of our burning challenges in the development agenda is the need to create new jobs in a massive scale, especially for the youth. This is fully acknowledged in the new Development policy programme of Finland. The World Bank has estimated that the world will need 350 million new jobs within the next decade, first, for those currently unemployed or underemployed and, second, for those still about to enter the labour market. The International Labour Organization speaks about 600 million new jobs needed.

2. The private sector is the engine of economic growth. The companies in the private sector create jobs for the people if they can operate profitably and produce goods and services that the people want.

3. In our globalizing world, trade is the vehicle that makes it possible for companies to grow. That growth is precisely the foundation for more employment, better incomes for those employed, more tax revenues for the state and, in the long run, better public services for the people, including the poorest and most vulnerable groups.

4. There is ample evidence that openness of trade is beneficial for economic growth in the long-run. It is clear that best results in poverty reduction have been achieved by those developing countries that have embraced external trade and that have succeeded in integrating into the global economy. There is a need to ensure the creation of decent work. Also social protection is very important for people to manage the uncertainties and even sudden changes in the globalized world.

5. I can also tell from our own experience that Finland’s gradual integration to the world trade has been one of the key factors behind our positive economic development. This integration has advanced hand in hand with our ability to diversify our export base from a few primary goods to machinery and high-tech products.

6. Another issue that has greatly contributed to Finland’s economic performance, is the fact that both women and men are active contributors to the economy, and both have the access to education, health, assets, financing, employment and other necessary elements. This enables Finland to be more efficient and innovative in business and trade as well as in other sectors of life. Women also have a considerable purchasing power. If only men would contribute to the economy, Finland would be very small and much poorer.

7. Expansion in trade requires and facilitates more investment, which in turn means more jobs. Employment brings money to families, enables them to spend on necessities, and contributes to the prosperity of a society as we have witnessed in my own country, Finland. It is our obligation and in our mutual interest to advance the positive impacts of trade and investment for the development of the world.

8. In addition to improved market access and appropriate flexibilities for the poorest countries there is a clear need for strengthening the trade capacity of developing countries through Aid for Trade. Aid for Trade is essentially about supporting developing countries to negotiate and implement trade agreements, as well as supporting entrepreneurship and productive capacities in tandem with sustainable development. Aid for trade must, and does, build on the recognized needs and real ownership of the developing countries.
9. Aid for Trade contributes to decent employment and, in a long run, to improved domestic resource mobilization in developing countries. Those resources will finance health and education systems, social security, environmental protection, and all that welfare that we are able to enjoy in rich countries. Likewise, the final beneficiaries of Aid for Trade – that is the poor people in developing countries – need public services, clean environment, nutrition, and many other things, to be able to be productive, innovative and entrepreneurial.

10. Moreover, at the same time as we strive for the improvement in the competitiveness of developing countries, we also have to cater for the decent standards of work. We have to ensure that labour standards are respected, proper wages paid and gender discrimination abated. Environment must never suffer because of the corporations’ strive for more profits as such a short-sighted attitude would deplete our natural resources and render fragile environments inhabitable. To respect this far-going but simple fact, Finland has integrated climate sustainability in its development policy to be promoted everywhere.

11. We should also bear in mind that in terms of employment the private sector in the poorest developing countries consists largely of informal microentrepreneurs. One option to increase the direct poverty reduction effects is to focus a part of Aid for Trade on global value chains in agriculture, extractive industries, manufacturing and services, which use informal enterprises. Investments in these areas can be strengthened and improved by taking into account the possibilities, roles and capacities of women and men i.e. by promoting gender equality.Service inputs are particularly important in increasing the value-added in industrial production.

12. Essentially, a favourable business environment means well-maintained infrastructure, functioning market institutions, healthy business competition and good governance. In a desirable business environment, goods and people move freely, state authorities are reliable and accountable and companies are able to produce those products that are demanded by the consumers. Production, sales and distribution create employment and revenues. If one part of this equation fails, the entire process will eventually fail. It has become evident that many poor countries have new perspectives as they are discovering abundant natural resources, especially oil, gas and minerals. Finland emphasized the need to support good governance of thesw resources, so that the profits will be available for the needs of people.

13. There are also other factors to be considered, namely access to information, use and application of knowledge and, especially, innovativeness. These factors have become decisive when it comes to competitiveness. Information and communications technology is a great tool for increasing productivity, efficiency and even the provision of public services. They are also crucial for the freedom of speech and democracy. Especially mobile communications and e-commerce give a boost towards greater investment in innovative new technology, generating easily new creative business models and opening untapped markets.
14. Corporate Social Responsibility (CSR) can also help significantly in bringing the benefits of trade directly to the poor people. CSR is not anymore an add-on to the “normal” business conduct. It is part of core business strategy for modern and successful companies. Consumers and investors pay increasingly attention to the responsibility and sustainability of the business. Furthermore, there are evidence that CSR actually advances staff motivation, commitment and innovation within responsible companies.

15. Another area in which we can effectively link trade to poverty eradication is the so-called Base of the Pyramid (BoP) market. Depending on the definition, the relatively poor people in the world constitute a segment of two to four billion people. The mere size makes it a lucrative market. Companies can engage poor people in designing products, services, packaging, distribution channels, business models and partnerships which benefit all parties. Similarly, we can learn from the poor people by innovating together with them for our common benefit.

16. The third area which I want to point out is Green Economy. Green technology that helps save energy and material inputs, produce energy from renewable and non-polluting sources, and monitor climate, weather, environment and nature are in high demand. With the private sector investment, and facilitated by Aid for Trade, we can improve the wellbeing of all the people butalso helping the poor countries jump over unsustainable phases of development.

17. Trade as a vehicle for bringing innovative and profitable companies together in the market has always been a prerequisite for poverty eradication. We just have to unleash the potential of the poor people’s entrepreneurial spirit for our common benefit of poverty eradication.