Speech held at the Annual Meetings of the World Bank Group and IMF 12.10.2018

Presi­dent Joko Widodo, Mana­ging Director Christine Lagarde, Presi­dent Jim Yong Kim and Fellow Gover­nors

Welcome to the Annual Meetings of the World Bank Group and IMF, and to the seventy-second Plenary of the Boards of Gover­nors. Please join me in than­king our hosts, the Indo­ne­sian govern­ment and the people of Bali, for their warm hospi­ta­lity. It is an honour for me and for Finland to chair this meeting.

Much has changed since we last met. Global growth remains strong and unemployment has decli­ned. Although major reforms have helped strengthen the global finan­cial system, the effects of the global finan­cial crisis remain.

Some fami­lies still have not reco­ve­red. For many, globa­li­za­tion means unemployment, falling wages and income inequa­lity. This crea­tes fertile ground for popu­lism and pola­ri­za­tion. In a world of decli­ning trust and limi­ted multi­la­te­ral coor­di­na­tion, a reces­sion could quickly turn into anot­her crisis.

There is concern that robots could be the trig­ger. It is esti­ma­ted that milli­ons of jobs could be lost to arti­fi­cial intel­li­gence, which would hit middle- to low-income workers the hardest. However, tech­no­logy does not need to work against us. Mana­ged fairly, the digi­tal revo­lu­tion has the poten­tial to incre­ase prospe­rity for all.

My country Finland is an example of how this can be achi­e­ved. Finland has been an inde­pen­dent state for a hund­red years. Finland has made a remar­kable econo­mic jour­ney, from one of the poorest, most agra­rian countries in Europe, to one of the wealt­hi­est in the world.

How did we get there? By inve­sting in our people—through health, social protec­tion, women’s rights and educa­tion.

Our long-term objective is to provide equal oppor­tu­ni­ties to high-quality educa­tion and trai­ning for all citi­zens. Finnish educa­tion policy is built on the prin­ciples of free educa­tion and lifelong lear­ning. We beli­eve that educa­tion is the key to compe­ti­ti­ve­ness and well­be­ing of the soci­ety.

As Finland’s expe­ri­ence has shown, inve­sting in human capi­tal not only strengthens a society’s resi­li­ence; it also makes econo­mic sense.

In Finland, we value trust. It is the funda­men­tal pillar of a func­tio­ning soci­ety. I beli­eve trust is also what we need at the global level. Without trust it becomes impossible to find solu­tions to global problems we are facing today.

Without a doubt, climate change is the defi­ning chal­lenge of our times.

Without a doubt, climate change is the defi­ning chal­lenge of our times. Recent expert reports demon­strate that global warming is happe­ning even faster than we expec­ted. Luckily, the reports also show that we have the means to miti­gate climate change. We just need to step up efforts, make the right poli­ti­cal deci­sions and to imple­ment them.

I give you an example close to Finland. In thirty year’s time, the Arctic Sea is expec­ted to be almost comple­tely ice-free in the summer, which would raise sea levels, and could contri­bute even furt­her to global warming. As the Presi­dent of Finland, Sauli Niini­stö, warned: “If we lose the Arctic, we lose the whole world.”

Fortu­na­tely, commu­ni­ties around the world are finding inno­va­tive ways to adapt. Here in Indo­ne­sia for example, commu­ni­ties in Borneo and Java are respon­ding to climate change with agro­fo­restry. Unpro­ductive rice paddies are being used to plant teak, which can be cut and harve­sted. This is good for land producti­vity as well as biodi­ver­sity.

Of course, respon­ding to climate change invol­ves more than just adap­ta­tion. Globally, green­house gas emis­sions are still on upward trend. Toget­her, we must turn that trend. And there is hope: alre­ady, more effi­ci­ent use of energy and rene­wable energy sour­ces are helping to reduce emis­sions notably.

We should encou­rage green tech­no­lo­gies and conti­nued inno­va­tion. And we should discou­rage high-emis­sion produc­tion tech­no­lo­gies. However, histo­ri­cally countries have hesi­ta­ted to take action because of concerns about nega­tive effects on growth.

The Nordic expe­ri­ence shows that it is possible to reduce emis­sions and still have healthy econo­mic growth. Well-desig­ned climate and energy poli­cies can miti­gate climate change while also promoting sustai­nable econo­mic growth and employment.

As Finance Minis­ter, it is impor­tant to me that we are able to come up with concrete measu­res that are within the compe­tence of the Ministry of Finance. I am very plea­sed that Finland has taken steps to incor­po­rate sustai­nable deve­lop­ment in our budget, as one of the first countries in the world. This demon­stra­tes how we use taxpay­ers’ money for advan­cing the sustai­nable deve­lop­ment goals.

The threat of climate change, however, cannot be solved by each nation working alone.

The threat of climate change, however, cannot be solved by each nation working alone. Country-level actions need to be comple­men­ted by multi­la­te­ral efforts. The same can be said of the global economy. If we don’t preserve a fram­ework for global econo­mic coor­di­na­tion and coope­ra­tion, we risk reversing the gains from open markets.

The IMF and the World Bank Group have an impor­tant role to play in making globa­li­za­tion work better. They were crea­ted to promote global integ­ra­tion and econo­mic coope­ra­tion. Today, they aim for broadly-shared prospe­rity.

Prospe­rity cannot be achi­e­ved by resor­ting to protec­tio­nism. Trade barri­ers and tariffs will not solve global imba­lan­ces. To solve global chal­lenges, we need to restore trust: trust between citi­zens, trust between govern­ments, and trust in insti­tu­tions.

Perhaps the grea­test asset of the IMF and the World Bank Group is their culture of consen­sus-buil­ding, which is rooted in trust. Global consen­sus can only be achi­e­ved with coope­ra­tion, compro­mise and good­will. I know this is not easy. But without consen­sus, and without trust, there will be no solu­tion to our chal­lenges.

Thank you.

Petteri Orpo

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