Export-driven growth is what will pull Finland out of its economic malaise, affirms Antti Rinne, the chairperson of the Social Democratic Party.
At present, Rinne highlights, no more than 26 companies are responsible for generating 60 per cent of the export earnings of the country. “That's too few,” he says.
The Minister of Finance believes Finland needs a strategy based on “global megatrends” to encourage more companies to export their products to developing markets in, for example, Asia and Africa.
It is practically impossible to get a word in edgeways once Rinne gets going on megatrends, such as climate change and urbanisation. He reveals that during a trade mission to China the quality of tap water was so appalling that the hotel advised its guests not to use the shower. Air quality, in turn, improved to a level not detrimental to health only once during the visit.
China consequently represents an enormous market potential for the clean tech sector of Finland, according to Rinne. “We need to have more growth-hungry companies than we have today,” he underscores.
He also believes the central administration should assume an active role in providing internationalisation training to small and medium enterprises. But does the provision of export training truly fall under the purview of the central administration?
“The state must be active and industrious,” replies Rinne.
The Social Democratic Party is currently expected to challenge the National Coalition for second place in the upcoming parliamentary elections. The party is hopeful that economic growth will pick up to two per cent by the mid-term policy review session of the next Government.
At present, its hopes seem ill-founded.
The Social Democrats announced a few weeks ago that adjustment measures with an impact of three billion euros are required to balance the national economy. Two billion euros of the savings, it estimated, should be generated by cutting back on spending and one billion by raising taxes.
Rinne underlined that while a decision on the measures should be taken immediately after the next Government takes office, the measures should not be implemented until the latter stages of its term in office and over the course of the following electoral term.
“They'll be carried out over an eight-year period,” he specifies.
Rinne says that he agrees with a recommendation by the Finnish Economic Policy Council to postpone the spending cuts. The Finnish Economic Policy Council is an independent review council that consists of five professors and is chaired by Roope Uusitalo, a professor in economics of education at the University of Jyväskylä.
“You can't pull through by cutting and raising taxes,” Rinne argues.
Senior officials at the Ministry of Finance recently unveiled their uncompromising estimate of the necessary adjustment measures, viewing that the national economy shows a shortfall of six billion euros. Principally, the shortfall can be corrected with two types of measures: spending cuts and tax hikes.
Several political parties have expressed their backing to the conclusions drawn by the officials. The Left Alliance is currently the only party that has categorically rejected further spending cuts.
In addition, the report has encouraged economists to comment on the economic conditions. Pertti Haaparanta, a professor of international economics at Aalto University, voiced his opposition to demands for further spending cuts in an interview with Helsingin Sanomat on 23 March by cautioning that the cuts would be counter-intuitive and threaten to thwart economic growth for years to come.
Rinne has held the reins of the Social Democrats for almost a year. Although voter support for the party has crept up moderately from its low point, it remains notably behind the vote share of 19 per cent the party won in the previous elections.
Yet, Rinne insists that undecided voters could yet produce an upset in the elections, one that will hopefully benefit the Social Democrats. “We're aiming for an election victory,” he says, confident that the Social Democrats will win a larger share of the vote than four years ago.
A debate that is certain to prove agonising for all parties will not arise until June when Greece is likely to request further assistance and a third bailout package. Rinne says that any premature speculation on the issue is futile but also stresses that the Social Democratic Party “is no longer prepared to increase Finland's liabilities”.
This article is part seven of a series of eight interviews by Helsingin Sanomat with the chairpersons of the largest political parties in Finland.
Part 1: Paavo Arhinmäki (Left Alliance)
Part 2: Carl Haglund (Swedish People's Party)
Part 3: Ville Niinistö (Green League)
Part 4: Timo Soini (Finns Party)
Part 5: Juha Sipilä (Centre Party)
Part 6: Päivi Räsänen (Christian Democratic Party)
Part 8: Alexander Stubb (National Coalition Party)
Katja Boxberg – HS
Aleksi Teivainen – HT
© HELSINGIN SANOMAT
Photo: Leif Rosas