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Riyadh Speech on Global Challenges
Saudi Arabia is opening up. In Riyadh, a major conference discusses the opportunities ahead as the country seeks to enter the World Trade Organisation. Here my remarks on Europe, the global challenges and the time bomb from Agadir to Abu Dhabi.

Carl Bildt

Remarks at Conference ”Saudi Arabia: Financing the Future”
Riyadh, May 30, 2001.

Yesterday, I arrived from a Europe starting to feel the warm winds of summer, to meet the heat of this fascinating and important part of the world.

Europe has just entered the second decade of its great transformation.

We often forget how profound the changes during the last decade have been – in Europe and in the world.

Little over a decade ago, there was still a wall dividing the old continent of Europe. And few had ever heard of the Internet.

Then, it all changed. We saw the fall of the wall and the rise of the Web. And we have been trying to deal with the consequences of these two truly revolutionary changes.

Building a Europe that is whole and free, dynamic and democratic.

In Maastricht in late 1991, the then leaders of the then European Community set their agenda for the decade.

They wanted to open the doors of integration to the former neutral countries of Western Europe. They wanted to start to create a common foreign and security policy. They embarked on the effort to have not only one market, but also one money, to create a common European currency.

I have been fortunate to be part of these developments.

Having worked first to modernize my own country Sweden, taking it out of its neutrality of the past and into the evolving European Union, I was called to serve the cause of peace for first the European Union and then the United Nations in the troubled region of the Balkans.

I have seen the successes of the past decade – and lived through the painful tragedies as old tensions flared up into new conflicts.

As I speak, the guns thunder in Macedonia. Thousands have been forced to flee. A fragile state is in mortal danger. Much more than some isolated villages are at stake. The future of Macedonia could well decide the future of the entire region.

There are today a quarter of a million young men and women in uniform in the one way or the other committed to service in peacekeeping in the Balkans.

But in spite of this, it is no longer primarily by military deterrence, but by peaceful integration, that we believe we can create better conditions for peace in all of Europe.

The roots of the decision to create the common currency are economic. It will ease trade and integrate markets, thus increase the potential for both stability and growth. But we should not overlook that it also serves the cause of long-term peace in the region.

Few believed the common currency would happen. But today, it is already the second global currency, with an increasingly important role in the global financial system. From next year, its coins and banknotes will replace the old coins and banknotes in twelve countries from Portugal in the south to Finland in the north.

But the Maastricht agenda for Europe for the 1990’s has now been replaced by the twin agenda of Helsinki and Lisbon.

In Helsinki in December of 1999, the leaders of the European Union decided the open up membership negotiations with no less than twelve other European countries, and further down the road with Turkey as well. In essence, this is about peace.

In Lisbon in March of 2000, they committed themselves to creating within a decade the most dynamic knowledge based economy in the world though a process of structural reforms. In essence, this is about prosperity.

There is no doubting the magnitude of the challenges presented by either the Helsinki agenda of enlargement and peace or the Lisbon agenda of reform and prosperity.

Again, there are likely to be setbacks, doubts and obstacles. But much like we have seen before, the political will expressed jointly by the nations is likely to prevail.

In stages, starting in two or three years, we will see the European Union of the present 15 members states of old Western Europe grow to include all of Europe to the west of Russia and the Ukraine, eventually stretching from the Artic Ocean in the north to the edges of the plains of Mesopotamia in the south.

Then, the largest city of the European Union will no longer be London looking across the Atlantic, but Istanbul also looking towards the east and towards the south.

It is unlikely to happen already this decade. But it will happen. And it will profoundly affect all of Europe.

The process of enlargement must go hand in hand with the process of structural reforms.

In some ways, we set the tone in Sweden and Finland when we did a radical liberalisation of telecommunications in the early 1990’s, and soon emerged as the worlds most advanced markets and most advanced producers in the new telecommunications revolution.

One after the other, previously regulated markets are set free, to the benefit of consumers and competitive producers alike. Much remains to be done, notable in the labour markets and when it comes to different public services, but the direction of change is clear.

And the reform economies of Central Europe often have much to teach us.

During the 1990’s, radical reforms lead to a 50 % growth in the economy of Poland. During the same decade, socialism, strife and sanctions caused the economy of Serbia to collapse by half.

As Europe moves ahead with the Helsinki and the Lisbon agendas, it also ponders its ways of working together. The European Union is, after all, a truly unique endeavour. There is no fixed plan and no preordained model.

Gradually, there will emerge a common constitution for what already today is a federation of nation states. And there is no contradiction in this.

I am no less a patriotic Swede because I am a committed European. I am not giving up my country because I don’t want my democratic rights and powers to make halt by its frontiers.

So, our federation of nation states will continue to evolve. Prime Minister Jospin of France made an important contribution to the debate the day before yesterday. Towards the end of this year, you will see the leaders of the European Union setting the stage for the further debate.

There is no denying that a Europe so profoundly reforming itself risks loosing its focus on the rest of the world. But by its reforms, it is bound to emerge as more important on all of the old and new global issues.

The bonds across the Atlantic will remain. Although much changed, I believe they will grow stronger with time.

We Europeans have the immense richness of our cultural heritage, but at the same time we are both inspired and influenced by much of what is happening in the United States, and we share values that we believe are of importance for the entire world.

After only four months in office, President Bush has got a decision on the biggest tax cut for nearly two decades. He is embarking on a radical rethink of some of the global strategic structures as the emphasis shifts from offence to defence. And he is deeply committed to free trade for all.

All of these issues deserve serious debate – and serious action.

The European Union is the world’s largest trade power. Together with the United States, we want to go further in setting trade free across the globe.

The failure of Seattle was not primarily a failure for the United States and of Europe. It was a failure that even more affected the developing countries. As we approach the important meeting in Qatar this autumn, I hope this will be born in mind.

After having widened for more than two centuries, the gap between rich and poor in the world has started to narrow during the last quarter of a century. Opening up of economies, and freer trade, has lifted more than a billion out of poverty into an emerging middle class from Shanghai to Sao Paolo.

But not everywhere. Africa is poorer today than it was quarter century ago. Its problems are massive. Of all the countries of Africa, only South Africa spends more on health service than on debt service.

But let’s be clear on the reasons.

As the UN Secretary General Kofi Annan pointed out in his report to the Millennium Assembly last year, “the benefits of globalisation are plain to see: faster economic growth, higher living standards, accelerated innovation and diffusion of technology and management skills, new economic opportunities for individuals and countries alike.”

The tragedy of much of Africa is to a very large extent the tragedy of regimes resisting globalisation, resisting liberalisation and resisting that openness that brings positive change.

Within a year, Chine is likely to join the World Trade Organisation. Russia would like to join in the next few years, although the problems are big. The trading tiger of Taiwan is obviously eager. And the entry of Saudi Arabia will be of great importance. We all stand to benefit tremendously from a more open, rules-based global economy.

This is especially so in this great period of great technological transformations.

The financial markets might have gone from boom to bust, now bouncing on the trading floors around the world.

But the pace of technological change, or scientific discovery, has continued. The majority of all the scientist that have ever lived are living and working today, opening up new horizons for all of us.

The powers of the microprocessor continue to double app. every 18 months. The powers of the telecommunication technologies have started to double perhaps every nine months. And during the last years, we have seen Internet traffic double every three months.

We have only seen the first wave of the Internet revolution. The next generation of the Internet will be much faster, always on, everywhere present, more secure and more reliable.

Already today, 20 000 now domain names are added every day of every week of every month. Within this decade, I believe there will be more Internet addresses than people on the planet. We will be living in a truly networked world.

But we must not ignore the other challenges that are there.

I see, with a Chinese way of speaking, Two Hungers and Two Fears that will profoundly impact global developments in the decades ahead.

The first hunger is the hunger for energy.

Global energy demand will increase by approximately 50 % in the next two decade. Demand from the developing countries will double. We must do much more to develop alternatives, but there is no escaping the fact that most of this demand will have to be meet by oil and gas.

This will require not only massive investments in a number of countries and areas. Some of them might well be politically complicated. And it will require us all to address the serious issues of climate change in a way that is truly responsible both to today and to tomorrow.

The second hunger is the hunger – or rather thirst – for water.

It takes 1 000 tons of water to produce one ton of grain. A third of the population of the world is today living in areas that are water stressed. In major grain producing areas in China and India, water tablets are sinking at a rate of a meter a year or more. I need not dwell on the situation in this part of the world or in parts of Africa.

Within two decades, two thirds of the global population might live in areas that are water stressed.

Again, we need to more. Massive investments will be needed, as well as political cooperation and responsible behaviour.

To the Two Hungers should be added the Two Fears.

The one is well known throughout the history of mankind: the fear of war.

But the face of war is changing. Increasingly, we are faced with ethnic and cultural conflicts that often defy the powers of traditional diplomacy. Of the nearly 30 open conflicts in the world last year, the vast majority were of this sort.

We need to develop better instruments. I firmly believe that the United Nations can and must be such an instrument-

The second of the fear is also old, but it’s coming in new forms: the fear of disease.

No longer can we confidently say that we are wiping the one sickness after the other from the face of the earth.

True, there is major progress in important areas. But since the early 70’s, we have seen a number of infectious diseases – tuberculosis, malaria – making a comeback, and making it in more virulent and more resistant forms.

And to this should of course be added the plague of AIDS/HIV. The median age in countries like Botswana and Zambia are sinking by 30 years. But it is not only a catastrophe in Africa. It’s spreading in Latin America. It might well hit the rapidly growing mega cities of Asia.

We simply must do more.

I believe the challenges can be overcome, provided we see them, and provided that nations and both public and private leaders are ready to work together.

I believe we are living in what might well be the most promising time ever in the history of mankind.

What you are discussing these days in Riyadh is part of this great story.

A kingdom of vast resources and great talents is gradually opening up. Preserving its cultural heritage, and safeguarding its special role, it seeks to be even more a part of the new world emerging.

And this is important for this entire region. On the television screens across the world, we see the bombs in Jerusalem and over Palestine. This has to stop.

But perhaps of even greater significance is the demographic time bomb that is ticking from Agadir to Abu Dhabi.

In nearly all of the Middle East, the majority of the population is now under 20 years of age. In a decade and half, the region from Agadir to Abu Dhabi will increase from 300 to 400 million people.

It is of importance to all of them, and to the stability of a region so profoundly important to all of the world - be that for religious or economic reasons - that the economies can give young peopled also here the jobs and opportunities that will make it possible for them to shape their lives in accordance with their visions and their values.

If the will to embrace change is there, there is no reason whatsoever why this should not be possible. Together, we can build a better world.

Bildt Blog Comments

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