Speech by Minister for Development Cooperation and Foreign Trade Ville Skinnari at Meeting of Heads of Mission 2022

Esteemed Heads of Mission, dear colleagues and friends,

We look back at 1952 as the annus mirabilis of Finland. This was not only the year in which Finland hosted the Olympic Games, but it also marked the time of relief from the consequences of war when the last reparations train crossed the frontier at Vainikkala on 18 September. The history books are also likely to highlight 2022 as a milestone year for Finland. While we have yet to determine our profile as a future NATO member, it is already evident that the accession process has made Finland more widely known throughout the world.

The return of power politics, geopolitical tensions and the Russian invasion of Ukraine have amplified the importance of international relations and foreign policy. The past Government term has shown that the Ministry for Foreign Affairs and its network of missions are a national asset that has provided real-time scenarios and pre-eminent analysis to both the top echelons of government and the entire administration.

I would also like to thank you all most warmly for this commendable work.

It does not require the gift of prophecy to see that competition over values, political systems and technology is intensifying, and that the conditions for managing relations with China and Russia are increasingly difficult. The slide towards an era of tension, on the one hand between the West and Russia, and on the other between the West and China, is creating uncertainty. We really need to ask what the place of Finland will be in this new world.

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Operating conditions

The Russian invasion of Ukraine fundamentally changed our security environment and forced us to reconsider our position. Russia’s attack united the West and the European Union, and reinforced transatlantic cooperation. It also further highlighted the role of NATO and the United States as guarantors of stability in Europe.

Russia has opted for confrontation with Western countries, seeking to strengthen cooperation with China and other economies, and with several developing countries. The Russian approach to exerting influence includes spreading disinformation that challenges democracies, and supporting various protest movements. Russia is particularly seeking to increase its influence in the eastern neighbourhood of the European Union.

China is seeking to benefit from its asymmetric relationship with Russia, signalling in many ways the growth of its influence and the supremacy of its social system. China is particularly keen to strengthen its influence in the Indo-Pacific region. The role of Brazil, South Africa, Indonesia and Turkey as political and economic operators and indicators of the direction of global democracy will increase. India may also emerge as a major challenger to China in the next decade.

The Russian attack on Ukraine gives concrete form to the risks for EU countries involved in depending on fossil fuels, and on one of the main suppliers of such resources. Risks related to the supply of cereals and basic commodities are materialising globally. Russia and Ukraine produce more than a quarter of the world’s wheat and barley, a fifth of its maize and half of all sunflower oil. The supply shocks caused by the war have resulted in a sharp rise in the prices of food and energy around the world.

The rise in food prices is leading to the most widespread disruption of global food security since the Second World War. For example, the price of wheat is forecast to increase by as much as 40 per cent by the end of the year. A recent World Bank forecast suggests that food prices may remain at exceptionally high levels for several years.

The price shock caused by the war is particularly disastrous for the world’s poorest countries. Significant problems are expected in the near future, especially in the Sahel region, North Africa and the Middle East. Ukraine or Russia play an important role in the food imports of 35 countries in Africa.

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Trade policy

Ladies and gentlemen,

What can we then do to manage risks in the global economy? The European Union already initiated a debate on building resilience to crisis and on the idea of strategic autonomy in response to the pandemic and the China - US trade war. The conclusions of that debate are partly reflected in the Union’s industrial policy, and in its efforts to strengthen European production chains and reduce risky dependencies.

While strengthening resilience is essential, it must nevertheless be borne in mind that the European Union as a whole is not particularly dependent on imports. Among more than 9,000 customs tariff headings, there are only 233 product categories in which the Union depends on imports. While some strategic dependencies exist, most of these relate to various foodstuffs and textiles, meaning products that the European Union could surely manage without if necessary. Dependencies can be managed by seeking alternative suppliers, increasing stockpiles, and making decisions on the location of production. It is important to avoid overreacting.

Dependencies may also be managed by concluding new trade agreements. The European Union has the largest network of trade agreements in the world, maintaining more than 40 agreements with nearly 80 countries. Even though recent years have seen challenges in concluding new agreements, I believe that there are real prospects of progress on the trade agreement front during the upcoming presidencies.

Despite the new global situation, the basic direction of Finland’s trade policy will not change. We will remain stable “trade liberals”, even though we must be capable of reassessing our policy in relation to the broader framework under certain circumstances. A stronger European Union is a condition of success in global competition. It is our best guarantor of security and economic wellbeing in the long term. This will require various things:

Firstly - as I already noted - we must be able to update the network of European Union trade agreements. Any failure in this respect will leave us hopelessly behind our competitors. The Indo-Pacific region in particular is progressing rapidly, but Africa is also moving forward. It is important to remember that trade agreements also help our businesses to diversify their risks and thereby improve our resilience. The European Union cannot be strong without a powerful economy.

Secondly, we need to strengthen our partnerships with countries that share the same values. This relates both to the security of supply chains and to our ability to compete in the markets of developing countries. We will not be able to compete globally without such cooperation.

Thirdly, we must ensure that the European Union has adequate instruments for responding to unilateral measures and unfair competition. While these are instruments that we would not need in ideal circumstances, we sadly do not live in such a world. Use of such instruments must naturally be judicious. It is important to remain attentive in this respect.

Fourthly, we must establish a framework that enables the emergence of critical capacities in Europe while reducing harmful dependencies. Such measures must nevertheless remain evidence-based. While it makes sense to foster conditions for semiconductor manufacturing in Europe, because this responds to a shortage in a critical sector, this must not lead to the emergence of automatic subsidies in all possible industries.

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Development cooperation

Ladies and gentlemen,

The current government term has likewise not been an easy one in the field of development cooperation, but the goals of the Government Programme have generally been met. I am very proud of this achievement, and I would like to express my deepest gratitude to all colleagues in this regard!

COVID-19 ravaged some of the world’s weakest countries and people. Consumers and national economies will be challenged this spring by rising prices, inflation and slowing production chains. Finland has managed to maintain, and in some cases even increase its development cooperation under these challenging conditions. We do not leave the weakest without support, even in difficult times.

Our support for Ukraine will continue. Particularly in the education sector, our development cooperation has continued for years, and we were already involved in the initial humanitarian response on the very day that Russia launched its military action. We are currently planning medium and long-term development cooperation and reconstruction aid with a view to helping Ukraine regain its footing while establishing functional trade relations between our countries.

The future of the international rules-based system cannot be taken for granted. When the UN General Assembly voted on a resolution condemning the Russian military action in March, the 'yes' votes cast by 141 countries represented only about 40 per cent of the global population. The war in Ukraine has been a major blow to the economies of some African countries in particular. Countries that import cereals and fuel are in a particularly difficult situation.

The Global Gateway strategy and Team Europe initiatives are one way of promoting European solutions in global competition. These measures must be deployed as a matter of urgency, as markets are currently being reoriented in the aftermath of COVID-19 and disrupted value chains. Finland has a strong profile in Team Europe, especially in the field of digital solutions.

While Europe stands united in relation to Russia and in condemning military action, we must not ignore or forget Afghanistan, Myanmar, Syria, Yemen and other countries where human rights or the social conditions for living a decent life are under threat. The global need for humanitarian aid is now greater than ever before. No single humanitarian crisis is more important than another. These are always matters of human distress.

Following COP26 in Glasgow, we met in Lahti for the first high-level climate conference on the theme of adaptation in April. I would particularly like to thank Ambassador Jan Wahlberg and his team for their preparatory work. The theme of the conference went to the heart of the international climate debate. Adaptation will be necessary, even if global emissions are driven down tomorrow.

In October, we shall hold the first ministerial-level conference in Finland to promote school meals for the world’s poorest children and young adults. The ambitious target is to make school meals the international standard by 2030. I will continue working for this goal in the capacity of World Food Programme School Meals Ambassador. The aim is also to intensify cooperation focusing on the commercial work of Finnish school meals operators, and to promote the development of school meals concepts as export products.

Our cooperation with Finnish NGOs may have been closer than ever during the current Government term. Many of these organisations have also recently offered significant avenues of assistance, for example in the field of fundraising for Ukraine. This is precisely the kind of strong cooperation that we need in Finland today. I would be interested to hear your examples of how the work of Finnish organisations can be seen in practice in the countries where you are stationed.

With development challenges becoming larger, longer lasting and increasingly difficult, it is clear that public funding alone will not be enough to achieve the Sustainable Development Goals. We must continually develop global forms of development cooperation support to enable flexible partnerships of public and private actors such as businesses, investors and NGOs. Public funding should leverage private financiers more effectively to resolve common challenges.

We shall submit a comprehensive performance report to the autumn session of Parliament, frankly highlighting how we have succeeded in development cooperation. Responsibility, effectiveness and transparency are the cornerstones of our work, and I am personally looking forward to reading the conclusions of the report with great interest. This is all about taking care of our common affairs, and it is on such aspects that the ownership and support of taxpayers largely depends. It is also important to justify our work clearly and transparently to people who express critical opinions concerning development cooperation. It must also be clear that we shall immediately address any anomalies that come to light.

One principal spearhead of Finland’s international impact in recent years has been the Coalition of Finance Ministers for Climate Action that was established on our initiative. Our co-chairmanship of the Coalition ends in April 2023. It is wonderful that cooperation between the Finnish Ministry for Foreign Affairs and Ministry of Finance has been so smooth at the level of officials and ministers.

Finland has worked with Indonesia to set two key objectives for their co-chairmanship term. The first of these objectives is to put economic and financial issues at the heart of international climate policy by defining a permanent role for the Coalition in COP preparations. The second objective is to increase the membership of the Coalition from the current 74 countries to one hundred countries by next April. This is important, because 100 members would correspond to more than 50 per cent of UN Member States and more than 70 per cent of countries that have set carbon neutrality objectives. The role of our network of missions will be crucial in increasing Coalition membership.

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Promoting Exports and Globalisation, Team Finland

Dear Friends,

We know that an evolving world requires us to react swiftly to changes in operating conditions. This also applies when promoting exports and globalisation.

Finland and our international network need to attend more often in places where we can foster sustainable growth, and less often in places where no results are likely. This requires us to reform the work of operators that report to the Ministry for Foreign Affairs and the Ministry of Economic Affairs and Employment. The most important thing is to establish common goals. Finland can only have one goal and one common team.

Finland needs annual GDP growth of at least 2 per cent in order to safeguard the welfare state. Stronger growth and productivity come largely from business growth and investment. We have a major responsibility to realise international growth in practice. Each organisation currently sets its own goals, which is not appropriate.

The globalisation of Finnish businesses has evidently not diversified our industrial structure in the anticipated way. This is a major problem for sustainable growth in Finland. Virtual Finland provides vital substance to the virtualisation of service paths when making international labour more readily available in Finland. Stronger and more strategic support is needed for the globalisation of businesses. We must be involved already when designing green transition and digitalisation solutions. The business expertise of cities and regions must be incorporated into the domestic network in Finland. All cities and regions must be involved in exporting to achieve the common goals.

Work to promote exports and globalisation must be simplified, international operations must be combined into a single package, and the guidance of Team Finland organisations must be strengthened by defining their common strategy and objectives. The role of the domestic innovation system is to produce collaborative and individual business offerings for work to promote exports and globalisation. This work must seek to define market-specific goals for exports while highlighting Invest-in-Finland opportunities in target markets. Export promotion work must take the form of interdepartmental collaboration in which universities and research institutes also have a strong role to play alongside businesses and public organisations.

It will nevertheless remain important to keep RDI functions and export promotion in separate organisations. Export promotion must build its capacity for joint planning and reaction as economic structures and sectors evolve. Corporate and business offerings will be compiled through proactive teamwork between key Team Finland operators. Operations will be managed together, and will also be customised and directed to new industries through cooperation, or offerings will be constructed that entirely bypass traditional industries. The upcoming EnergySampo initiative to provide system-level solutions in energy technology is a good example of this, as are the deliverables for various industrial sectors arising out of Nokia 5G solutions. We may generate billions of euros in new export revenue by packaging these into commercial entities.

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Country branding

Dear Friends,

I would like to conclude with a few remarks about country branding and its importance. A strong country brand also provides a buffer against changes in operating conditions. This was seen once again during the events of last spring.

Our investment in a country brand and in long-term work to build it are now paying off. Finland has figured in international media coverage more than ever before, with the media highlighting such strengths as a functioning society, comprehensive security and security of supply. It is important for us to take advantage of this momentum. Even though surveys now suggest that the country brand of Finland has reached record high levels, our biggest challenge remains a general lack of recognition. This affects everything from securing FDI to recruiting talent and attracting tourists. It means that while the product is good, it is smart to apply the widest available range of tools in marketing that product.

I would like to see a stronger role for culture in Finland’s international profiling work. We are not exploiting this area enough at the moment. By making our culture better known – whether this is popular, culinary or urban culture – we are also supporting the drive to attract talent, which is an important theme for Finland’s future and our national economy. Foreign specialists are not only interested in our businesses, but particularly also in the country where they will live. Competition for talent is extremely fierce, and will require teamwork across the entire field. It is important for businesses to take advantage of Finland’s strong country brand, and I would like to see extensive cooperation with the business community in this area.

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The Ministry for Foreign Affairs

As the Ministry for Foreign Affairs, what should we be doing to improve our prospects of meeting global challenges?

We need to be able to prioritise and set clear objectives that will guide our actions, and to have the courage to set aside less important matters. This should also guide the allocation of resources. A clear sense of purpose, strategic thinking, and the ability to specify the measures required at any time and our expectations of others would make us more efficient and facilitate our work. I believe that this is particularly true in our foreign missions, where resources are often at a premium.

We must accordingly ask ourselves whether we are operators actively striving to change the environment, or “also rans” who are merely seeking to adapt to conditions as we find them. To be operators, we must influence the aspects that matter most to us in a long-term, strategic way. The decision to be an operator also delivers on a commitment in the Government Programme concerning a globally influential Finland that punches above its weight.

We must likewise ensure that others see us as a good and interesting place to work, and that we take care to inspire our people. While the last three years have brought the expertise of the Ministry for Foreign Affairs to the forefront, they have also challenged our capacity to cope in many ways. We must continue to accommodate this challenge.

I would accordingly like to extend my warmest thanks to you and to all of the staff for their excellent work this year, and to wish everyone a rewarding Heads of Mission Conference.