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Kristina Persson is no longer a government minister, Minister for Strategic Development and Nordic Cooperation
The role of governance for an inclusive and sustainable society
Kristina Persson, Minister for Strategic Development and Nordic Cooperation, speech at Oscar Pomilio Forum, 8 March 2016
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Signore e signori, buongiorno!
With it's snowcovered mountains Abruzzo reminds me of my own region in the north of Sweden, Jämtland. We are north and you are south , but we are increasingly connected, in so many ways. As a matter of fact, the whole world is. But, we also live in a time of growing divergence.
Our international and European organisations have inclusive and sustainable growth as their motto, but in reality we are floating apart as a result of the growing inequality within countries. Sweden is no exception, but as we started from a very high level of equality we are still better off in this respect than most other countries in the world.
I am not going to speak about happiness as such, as previous spakers did, but about the importance of good governance and the role of society for creating good conditions for the well-being of people.
We live in a time of great contradictions. We know to a large extent what should be done but we don't really posess the instruments to do it. And sometimes not even the will is there.
I have a favourite quotation from Charles Dickens, the British author who described the period of the French Revolution in A Tale of Two Cities – the two cities being London and Paris. I think this quotation catches the mood of our time. He started his book by writing:
It was the best of times, it was the worst of times,
it was the age of wisdom, it was the age of foolishness,
we had everything before us, we had nothing before us.
The inequalities in France led to the revolution of 1789. A somewhat later revolution – the industrial – created new kinds of inequalities between the very richest and the poor, who flocked to the growing cities or toiled in the mines. Sweden was at that time one of, if not the poorest country in Europe, more than 25% emigrated to USA in the 19th century.
Ignazio Silone, who introduced Abruzzo to many Swedes through his novels, described the similar conditions in Italy. Reading the stories from the lives of the peasants in "Fontamara" is a reminder of the tremendous social transformation of Italy in the 20th century.
The answer – eventually – was democracy and the development of the welfare state. Sweden was a latecomer to the process of industrialisation, which was probably a great advantage for us, both economically and socially. The hardship that accompanied the transition from a agricultural society to a industrial never attained the proportions that were seen in other countries, like England and also in Italy.
Our popular movements and civil society, including the trade union movement were strong and able to provide a solid foundation based on solidarity and justice for the new Sweden. The famous Swedish model, based on high taxes and good institutions was thus constructed from the early 20th century.
Now, for the first time in history, we human beings all share in practice the same world, linked as we are by technology, trade, communications, culture and commercialism. But we do so on highly unequal terms; Globalisation has led to decreasing poverty and greater similarities between countries. But also to imbalances between social and human needs on the one hand, and global market forces on the other.
Huge changes have taken place, and during a short period of time. The epoch defined by industrial and collective forms of production has passed its peak.
Today, the richest 80 people in the world – as many as could fit in a bus – have as much wealth as the poorest half of the world's population, 3.5 billion people. And economic and technological opportunities continue to drive the increasing inequality. Around the world, 60 million people are displaced or in exile because of war, and many more have left their homes in search of a way to make a living.
As Minister for Strategic Development at the Prime Minister's office, my work involves developing the foundation for long-term thinking and new strategies for the Swedish Government. During my first year of work we have focussed on three areas: First, The green transition into a fossilfree welfarestate, second, Jobs in the future, when new technology tends to replace people and possibly increase inequalities. The third is the necessity to create better functioning Global Governance.
Good governance is fundamental on all levels – be it local, national, regional or global. Global governance is I believe our toughest challenge; a new and complex playing field for politics, demands new ways of working together. In a world of low trust we need to reconcile macro-economic conditions with social needs. There is a need to develop long-term ways to support job creation, growth, ecological sustainability and inclusive social development. All at the same time.
To address these issues, I have initiated three multi-stakeholder working-groups with experts from government, business, academia and the civil society to present recommendations to the Government. This is a un-orthodox way of working in politics and as we now embark on stage two in my work, we will prioritize two things: We will first of all connect our analysis to the new, universal UN 2030 Agenda that captures the full field of important goals to attain ecological, social and economic sutainability. Secondly, we will integrate our work more closely with the processes within the government offices. After all, it is the responsible ministers who should take the proposals further and turn them into political action.
My role is to apply a holistic and long-term view on politics and capture the issues that tend to fall between the portfolios. If you focus on achieveing results you will find that a great number of ministers must be involved in solving one problem, be it unemployment, migration/integration or envirionmental degradation. All three types of sustainable development are interconnected: Social, economic and ecological - if one is left out, the others cannot work.
The world is in a process of complete transformation. The great economic disparities that have arisen in more or less all countries threaten to have a paralysing effect on economic and social development, in Europe and in the world. High levels of unemployment and too low investments in competence and education will in the long run be very costly for our societies. It is not only radical economists who make this claim. Institutions such as the OECD and the International Monetary Fund (IMF) are also raising the alarm. Christine Lagarde, director of IMF recently said that "if you want to see more durable growth you need to generate more equitable growth."
Reducing inequalities is one of the goals that make up the 2030 Agenda and EU must face this crucial challenge. The discussions about establishing an European Pillar of Social Rights is a step in this direction. More investments in accordance with The European Fund for Strategic Investments (EFSI) is another.
The best of times, and the worst of times...
A new world of work is emerging, driven by digitalisation, artificial intelligence, outsourcing and robotisation. The global market economy has left our political institutions behind, a long time ago.
Skills, reforms and renewal are key words whose implementation demands collaboration between all stakeholders in the society, as well as improved governance in the public sector.
I am hopeful about Sweden.The reason is that Sweden and the rest of the Nordic countries score very high in three important concepts for good governance. The three concepts are institutions, trust and innovation.
Good governance depends first of all on well functioning institutions and public systems, including an efficient tax authority and acceptance among people to pay their taxes.
Good institutions also include a good social security system, equal rights and opportunities for women and men and much, much more, which is reflected in the size of the public sector. This is also a condition for a high female participation in the labour market. Almost as many women as men work in Sweden. Our employment rate is close to 80%.The average in the EU is 69%, Italy is close to 60% - change this and public debts will decrease. Equality between sexes is very important both for the women and for the incomes of the state.
Second key factor after institutions/social systems is a high level of trust among people (generalized trust) and trust in institutions. Which in turn is supported by a low level of corruption.
My third key factor is a high level of innovation. A high level of innovation is something you can get by combining good conditions for entrepreneurs, R&D and partnerships – collaborations. We talk about challenge-driven innovations, focussing on needs in society.
These three achievements you always have to fight for - if not, they will degenerate. Even if a nation state has good governance it does not have all the answers. And the conditions for international cooperation are changing fundamentally due to geopolitical and geoeconomic shifts. In the worst case, this intervening period we are in, could carry on for quite some time to come, and be dominated by crisis and conflicts.
Inequality, unemployment and - I believe - globalisation are breeding grounds for populism and xenophobia. In the old industrialised countries a reaction has set in: people are looking backwards and wanting to recreate what used to be, nationalism - the old days. And they attack internationalism and regional cooperation, such as the EU. This reaction is futile and dangerous and risks seriously delaying democratic and social development.
The European project is facing major challenges. They stem from many different but coinciding problems and threats: The ongoing economic crisis, in the wake of the great financial crisis of 2008 is one. Europe's inability to cope with migration is another and the growth of nationalist and right-wing populist parties is a third - to mention a few.
The new policy agenda for the EU presented by the Italian Government last month underlines the need to make EU part of the solution, and not the problem. It calls for seizing the opportunity of the big European project.
The austerity policies have resulted in too low levels of demand and investment, that delay economic recovery. At the same time we face enormous investment needs for the green transition - if we are to succeed in staying as far below the 2 degree limit for global warming as possible, in accordance with the Paris Agreement.
The ongoing changes require a major political response from the leaders of society in all fields; political, economic and social (cultural). Not just now, but for many years to come.
The 2030 Agenda and the Paris climate agreement concluded last year, have the potential to stand out as important milestones on the way to more sustainable models for our societies. Not because the agreements themselves contain commitments that will save humanity from disaster. But because they are strong signals of the direction in which our world is heading – which in itself will trigger action.
For a long time, shared responsibility and solidarity have lost out in the age of neoliberalism. But no society can exist without solidarity. Everyone understands this: the forms and reach of solidarity are what politics is about.
Common people have to be mobilised for the change. This is particularly important in a time when characters like Donald Trump can be chosen as candidate för the most influential political office in the world. People need to be seen and respected. And in a democracy it is absolutely fundmental that they understand the time they live in.
There are glimmers of light. One is the growing interest taken by the business community and the financial sector in the movement towards a sustainable world. We see this very clearly in the transition to climate sustainability. Environmental thinking in general, even social issues, are no longer a matter of isolated CSR initiatives. They represent a new way of thinking based on the combined insight of what the world needs and the fact that there are large, profitable markets out there. The strong interest from both business representatives and the civil society in the 2030 Agenda also sends an important signal about partnership. A world that is not sustainable is not in the interests of business either.
A change in society towards solidarity does not happen overnight. It requires determined political efforts to build up new forms of cooperation that better match our current reality. We need a more social economy and the mobilisation of people. We need cooperation between the nations of the world, and between sectors and different interests.
The Swedish Prime Minister, Stefan Löfven, has taken the initiative to introduce the concept of a Global Deal – international tripartite cooperation in support of more and decent jobs, increased productivity and fairer distribution of the fruits of globalisation.
And this need to go hand in hand with the great, green transition in the world. Government resources will be nowhere near enough. The private financial markets must begin to serve the interests of society.
To succeed both in Europe and globally, our European cooperation must be reinvigorated. A divided and weak Europe can neither deliver jobs and good lives for people, nor global governance for a sustainable world. I welcome PM Renzi's initiative "A Shared European Policy Strategy for Growth, Jobs and Stability". It is a constructive contribution to the debate.
The Swedish Government will actively participate in European and international processes for an inclusive and sustainable world. In doing so it will be necessary to build alliances with other governments.
Our transition towards a sustainable world must be built by a new spirit of solidarity and cooperation. And as President Kennedy once said "Change is the law of life and those who look only to the past or present are certain to miss the future".