Dear Ladies and Gentlemen,
It is my true pleasure this morning to address such a distinguish auditorium of business people and exchange views with the eminent representatives of the panel.
After the EU enlargement trade and investment conditions in the region have become more unified – for all of us the Baltic Sea Region should be regarded as a home market.
But we should ask ourselves weather by the growth around the Baltic Sea we can secure the long-term development for the region.
The answer is very simple – no.
It is clear that the long-term growth could be secured only if the Baltic Sea Region is competitive not only within the EU but also well beyond its borders.
So, the problem for today – how to increase the competitiveness of our region in the global world?
In my opinion, at the EU level, we are too busy with regulating the internal market by creating ever new conditions, but we pay too little attention to the competitiveness of the EU on the global scale.
The development of the internal market takes place to some extent in isolation from the rest of the world. It is time to change it.
Protectionism of the internal market is not an answer.
A significant share in the economic activities of our countries is generated by small and medium-sized enterprises, for which the EU rules may be not a facilitating factor but rather a discouraging one.
The EU legislative process is more beneficial for large companies than for SMEs.
Probably the countries of the region should be able to formulate good proposals and test them locally in order to increase the competitiveness of small and medium size enterprises in the global world.
At the same time the Baltic Sea Region is fragmented – only one country in the region has yet made it into the eurozone, we have radically different approaches to policies on taxation, and we have differing traditions for social security.
What does this mean?
As for the region the lack of a common approach sometimes hampers to our interests.
We do not have a common view and approach towards economic growth and so we are likely to be defending different positions in Brussels.
However, to be fair, the diversity of our approaches is not always a bad think. For the Baltic States it gives some tools for faster growth.
The Baltic Development Forum is an ideal setting in which to ask the question: “when should we act regionally?” and “where should our approaches be more synchronised than they are today?” “Which are the unexploited synergies?”
Some issues where, in the long run we would profit from more regular conversation and coordination:
Finances. It’s not a secret that the Scandinavian banks dominate within our region. But at the same time I think that a wider presence of financial institutions in our markets (most specifically in the Baltic States) would increase the internal and external competition. Nordic and Scandinavian banks are not always in favour of some projects within the Baltic States since it would increase the competition.
As mentioned in the World Economic Forum report, we have the 5 most competitive economies of the world in our region. This is a challenge to other countries to use the best practices developed along the Baltic Sea in order to increase their own economic performance.
Individually, we are sometimes too small in order to present our real competitive advantages within the global markets – either in services or production. I am convinced that we do need more US, Japanese, UK, Swiss, Canadian and even Chinese investments in our region. We would have greater success in attracting investments if we agreed on pursuing in a more coordinated manner.
Because of the inter-linked investments and increasing volume of the trade within the region, transport is one of the sectors where we need competition which is more effective than it is today.
Firstly, there should be a real competition between the ferry lines – the market should be very liberal and we need to minimise the risks of hidden instruments or understandings, which can create distortions.
Every country in this region, and in the world, is struggling with an increase of the energy prices. No doubt, we are loosing the chance to profit and there has been a reduction in competitiveness. It is therefore in our interests to make our region a good platform for research on new sources of energy. As a region, we must consider how to optimise the efficiency of the energy networks on which we rely.
Every competitive economy should have competitive workforce, well-educated engineers, technicians and managers. The problem of Europe and our region is related to the general performance of our schools of higher education. Still only a few European universities (and non from our region) have reached the top of the world rankings. We do need to address this issue together for the common good.
Research and Development
The same applies also to the Research and Development. It should be one of our priorities to establish very good linkage between universities, research laboratories and industry. Here we can learn from the United States experience.
Last, but not least. After enlargement, the EU found itself with new neighbours but without common visions on how to involve the new neighbours within the economical processes of the Baltic Sea Region. We must be working for a vision of the “Wider Baltic Sea Region.”