Closing Plenary – Minister of Finance Sigbjørn Johnsen, Norway
It has been a great pleasure to receive all of you in Oslo for this unique conference. It has been a privilege to listen and take part in our discussions today.
Yes, we can make a difference!
Yes, this conference can constitute a turning point for international cooperation on growth, employment and social cohesion!
And I also know that with an appropriate policy response we can facilitate a job-intensive international recovery. If we fail to implement the right policies, we risk that unemployment remains high for decades, with huge costs to individuals and societies.
This conference has brought us closer to finding the right solutions. We know that there is no silver bullet, nor a single solution that fits all. But some lessons are clear after today’s discussion. Let me suggest five policy lessons that I see as the most important.
First - We must make sure our labour markets provide employment opportunities to all
We must protect workers, not specific jobs. It is clear from our discussion that social safety nets are important. These should be provided by the public and set up in a way that stimulates job search. They should support flexible labour markets and underpin the economy’s ability to adapt to structural changes.
More should be done to train the unemployed and assist them in job search. Experience has shown that increases in unemployment can be very persistent, particularly in Europe. Unemployment clearly moves more easily up than down. Targeted programmes can keep workers from becoming passive and discouraged, and from losing their qualifications.
We must work to include all groups and avoid unnecessary segmentation in the labour markets. Young people are always among the most vulnerable groups during recessions. We know that long-term unemployment among youth is often followed by reduced labour market participation throughout adulthood. If we cannot provide our young people with acceptable employment opportunities, what reasons will they have for believing in the institutions that govern them? Without trust in our institutions, we weaken the basis for robust and peaceful democratic societies. Tackling the youth unemployment problem is therefore one of our most important challenges as politicians. We simply cannot let young people’s skills erode. They are our future.
The second policy lesson is that we must keep our fiscal houses in order
Without fiscal room for manoeuvre, countries may be forced to embark on pro-cyclical budget consolidation with adverse effects on employment. Building up reserves in good times is an insurance against the negative impact of future crises on our economies.
Consolidation efforts must be fair and protect the most vulnerable. In many countries, fiscal restraint is also important to ensure the economic balance between generations. As we are faced with an ageing population, it will be challenging to deliver good public services and a social safety net that is both sufficient and credible. Overspending now means that we pass more of the costs onto our children. That will not be sustainable in the long run.
Third – We must build a stronger framework for global economic cooperation and coordination
Our recent experience has shown how interconnected we are through the global economy, and how quickly a crisis can spill over from one country to the next. We must respond to this situation by joining forces in strong, multilateral institutions, where all countries are represented.
As voiced on several occasions today, a stronger and broader framework for global economic cooperation can also help us take joint steps to prevent a new crisis. Recent years have made it clear that economic stability requires financial stability. While the international work to improve regulatory standards has come a long way, important challenges remain. We must all pull together to finish this job.
The IMF and the ILO working together to organise this conference is an important signal of the kind of teamwork we need. We just heard the announcement that the two great institutions are committed to working more closely together in the future. In particular, I am glad to hear that you will explore the concept of a social protection floor for people living in poverty. This is really very promising news.
Fourth policy lesson – Solutions must be found in cooperation with our social partners
The past is full of examples of crisis being the starting point of broad cooperation and consensus building with long term gains. For instance, it can be argued that the many labour market disputes and the economic crisis in Norway back in the 1930s, paved the way for our system where broad cooperation between the social partners and the government plays a central role. We have experienced the benefits of this model over time, through low unemployment and high participation rates for both men and women. Our model has paved way for a society that is stable, prosperous and equitable. Cooperation prevents confrontation and social unrest.
Fifth, and finally – We must keep our priorities clear and not lose sight of our goals
I know that necessary deficit reductions as well as labour and product market reforms will be unpopular with major stakeholders. So these will surely be challenging days for politicians. At the same time, we have a golden opportunity to make a positive impact on the future.
As we analyse problems and policies, we must never lose sight of what this is really all about: It is about people. Behind figures of unemployment and poverty, are millions of individuals whose lives are severely affected. Mothers and fathers who struggle to keep creditors at bay, so they can continue to provide their children with decent housing and not having to worry about their children going hungry to bed. In the end, economics and politics is all about the lives, the hopes and the futures of people.
In times like these good advice is particularly valuable. I would like once again to thank the IMF and the ILO for creating this conference as a unique arena for discussion. So to you Dominique and Juan, thank you. My greatest gratitude is also to all of you, as lead speakers and participants, for sharing your experiences and ideas. I will also give my sincere thanks to Katty for guiding our discussions throughout the day. Thank you very much to the staff from the IMF and the ILO, and even to the Ministry of Finance in Norway, who have all done a great job in organising and keeping this conference together. And to the press which, hopefully is now supplying the rest of the world with the message from this conference. I think we all will bring home important insights we can use as we get down to business: To create, together, a job-intensive economic recovery that will improve the lives of millions of people. We must take advantage of the momentum created by this conference to show people that politics work. To show, and I make the words of Abraham Lincoln to our words, that we really are governments of the people, by the people, for the people.
Thank you very much and a safe journey home to all of you.