Foreign Minister Tuomioja at a globalisation seminar: New forms of development finance must be supported
Press release 402/2006
4 October, 2006
According to Foreign Minister Erkki Tuomioja, political debate and taking of initiatives concerning new and innovative forms of development finance have become significantly more active over the past few years. On Wednesday, 4 October, Tuomioja gave a speech at a seminar in Helsinki, handling the challenges the governance of globalisation poses to Finland and Europe.
According to Tuomioja, the Helsinki Process has acted as one of the forums for debate even on these questions. Today, the setting for the debate has changed significantly. In past years, such measures as the Tobin Tax Initiative and extra charge on airline tickets mainly belonged to the agendas of non-governmental organisations critical of globalisation. Currently, they are also at the centre stage of intergovernmental cooperation involving about forty 'likeminded' countries from different parts of the world. It is noteworthy that all the big EU member states – France, Great Britain, Germany and Spain – are involved in this cooperation, Tuomioja pointed out.
The starting point for the cooperation of this new group of countries is that, in order to implement the Millennium Development Goals, new kind of financing is needed in addition to actual development cooperation. The group has committed itself to promoting the creation and dissemination of innovative forms of development finance, and particularly to the development of different international tax and charge systems. There are close to ten different ideas the group has focused its attention and efforts on, ranging from currency exchange tax to global lottery.
In Finland, the government has submitted a few reports on the subject to the parliament and positions have been taken on the initiatives proposed within the European Union. However, generally speaking, we can say that, so far, Finland has been quite reserved when it comes to these new financing ideas. Of course, Finland has been favourably inclined towards the debate and keeping these issues in the public eye, but often, for quite technocratic reasons, it has been decided that we cannot make such commitments at this stage, Tuomioja pointed out.
In Tuomioja's opinion, it is important that Finland review its policies. Even before this government term is over, we could take a close look at the viewpoints and proposals of the group of countries working on the development finance issues, and make a new decision in principle, on the basis of which we could join this pilot group, Tuomioja suggested. The next government programme should then entail a slightly more concrete line of policy concerning these new forms of finance, with Finland making a commitment to promoting them.
In his speech, Tuomioja also handled the rejected MAI Agreement. Even though its rejection was justified, I am of the opinion that we seriously need commonly agreed multilateral rules which define the responsibilities, obligations and rights of both the investors and the host countries, Tuomioja underscored. These rules should set the standard for both the corporate social responsibility and non-discrimination policies of governments. This would be a way of securing that investments generate the common good, and do not lead to neglect of working life standards, environmental protection or social responsibility. This would be in keeping with the interests of the development countries and their vulnerable economies in particular. The rapidly growing network of bilateral investment agreements is not the appropriate answer to these needs.
These questions have been handled on many forums since the old MAI was buried. The meeting of the Consultative Network of the Helsinki Process asked in June whether the Helsinki Process could, at this stage, do something to further the establishment of globally acceptable and balanced rules for direct foreign investments. The feedback I have received can be described as favourable, but cautious, Tuomioja said. Very few would deny the need for general rules concerning investments. However, the experiences from the MAI process have left the participants injured to the degree that it is difficult to return the issue to the political agenda. Now, the issue is included on the Helsinki Process agenda, but it remains to be seen where this can lead to, Tuomioja pointed out.
Additional information: Press Attaché to Foreign Minister Susanna Parkkonen, tel. +358 40 545 1275