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The Rt. Hon. Baroness Symons of Vernham DeanJEDDA Economic Forum |
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Excellencies, distinguished guests, it is indeed a great privilege and honour to have been invited to address you today. The Jeddah Economic Forum is a prestigious gathering, and I am delighted to participate in it. I would like to speak to you today about the role of trade and investment as forces for real good in the world, and the role of governments in developing trade and investment in terms of the global economy and at the national level. I will be happily take any questions you might have at the end – on these issues or any other matters of concern to you. I have a rather unusual role in the British government because I am the Minister for Trade with a strong foreign policy role. In fact I am a Minister in the Trade Ministry AND the Foreign Ministry. This reflects the fact that in the UK international trade and investment is absolutely vital. The United Kingdom is the world's fifth largest exporter of goods and services, and the second largest exporter of services. British exports were worth over 430 billion dollars last year. That is the equivalent to six thousand dollars for every man, women and child in the UK and accounts for 30% of our Gross Domestic Product. We also invest heavily overseas - second only to the US - and we actively encourage foreign investment in the UK. We believe the flow of investment encourages global growth, best practice and competitiveness. We estimate our stock of investment here in Saudi Arabia at around $3.5bn. Examples include Glaxo Smith Kline, Tate and Lyle, Rolls Royce and BAE Systems. Sometimes commentators at home question the British Government's commitment to trade, describing it as "the pursuit of commercial gain for its own sake". For our government it is far more broad based than that. The prosperity that flows from trade and investment allows us to invest in the health, education and security of our people to improve the quality of life throughout our society. International trade and investment has given us prosperity. So there is always the need to do more - strengthening our commercial links, promoting the benefits of reciprocal trade liberalisation, opening new markets and reducing barriers. Internationally, with our EU partners and through the World Trade Organisation – and through our bilateral relationships - we are working hard to ensure that freer trade provides greater prosperity and increased opportunity for all. Some say that world trade agenda is set for, and by, the industrialised West. I disagree. The World Trade Organisation is just that – an organisation of 144 countries that works by consensus – so all our voices count. We must all agree or we cannot make progress. Halving protectionist barriers to trade worldwide could boost world trade by £400 billion per year. Developing country incomes should rise by 150 billion dollars a year – that's three times the value of current international aid to those countries. Trade has the potential to uplift entire economies and improve millions of lives. According to the World Bank, substantial trade liberalisation could lift an additional 300m people out of poverty by the year 2015. The challenges ahead are daunting. But the outcome of the WTO meeting in Doha in November 2001 represented a substantial achievement. We now have a road map. And we hope to have travelled some distance by the time we meet again in Cancun in eight months time. Our driver, the new Director-General of the WTO, Dr Supachai is an energetic and committed advocate of the benefits of freer and fairer trade for all members of the WTO. A key achievement in Doha was the agreement to negotiate the liberalisation of trade in environmental goods and services. This gives us the chance to promote sustainable development through a more efficient use of natural resources and the more widespread use of cleaner technology – as agreed at the UN conference in Johannesburg last August. Your Excellencies and distinguished guests, there are one billion people in the world who lack clean drinking water. There are 2.4 billion people who lack adequate sanitation. More effective trade between nations is a means – and perhaps the only viable means - of creating the wealth and resources needed to tackle these basic human rights. We must not – we will not – falter in our efforts to create a global trading system which can deliver the help that people so desperately need. Where do we need urgent action and effort? To begin with, market access. Almost half the world's population earn no more than two dollars a day. Many of these, work in labour-intensive agricultural sectors where the average applied tariffs are considerably higher than for industrial goods. So, in the very sectors where poverty is most common, we see tariffs acting as a barrier to development, economic growth and any hope of relative prosperity. And this is an issue, which, for me, is close to home. Europe simply cannot indulge in high-flown rhetoric about tariff reform when, through the Common Agricultural Policy, we have a system of subsidies that gives every cow – yes, every cow - in Europe more than those two dollars a day upon which half the world tries to subsist. So, in agriculture, we must work for a degree of liberalisation that offers new trading opportunities for developing countries to help them towards sustainable development. And I am pleased that the EU is, to its credit, now taking a strong lead in improving developing country access to developed country agricultural markets. Another vital – though complex – area in WTO negotiations is the services sector. The aim and ambition is to open markets worldwide to international competition. Efficient services are crucial to all economies. Basic infrastructure services are essential foundations for development. Without the ability to communicate effectively, without access to sound finances and without efficient distribution services, developing countries will find it impossible to compete in world markets. Again, some suggest that developing countries are being forced into privatisation and liberalisation simply to satisfy the developed world's business agenda. I do not believe this is the case. Privatisation and economic liberalisation, where appropriate, can be the best mechanisms to deliver efficiency and to create wealth that is beneficial to society as a whole. But acceptance or otherwise of these devices must be a sovereign decision. One size does not fit all. Here in Saudi Arabia, we have a perfect illustration of this. When I met Minister Faqih on Saturday, I made clear to him that the United Kingdom very much supports Saudi Arabia's accession to the WTO. We believe it will be in the Kingdom's – and the world's – interest for such a major trading nation to be part of the WTO. But we do not underestimate the problems with which the Saudi authorities are grappling. We are sensitive to the special issues that apply here, and we are sympathetic to them. But we very much hope that serious negotiations will soon resume. Accession will help underpin economic reform, help attract foreign direct investment and assure Saudi access to world markets. These are prizes worth striving for. For the same reason, we look forward to agreement on an EU-GCC Free Trade Area, and welcome the increased progress of negotiations over the past year. My Ministerial portfolio includes investment. I cannot think of a single meeting I have had with a minister from a developing country where this topic was not raised. We must work towards a multi-lateral framework for investment that can provide greater predictability and certainty for investors; increased coherence on basic principles; greater transparency on investment rules between developing countries; and a boost for individual countries' domestic investment reform efforts. This is certain to promote greater investor confidence, which is an absolute pre-requisite for the higher investment flows that so many developing countries need. In the local arena of the GCC, we can see these issues very vividly. Here we have a region, which should be attracting immense investment flows. But the GCC receives less than one percent of global foreign direct investment – and this despite having the feedstock for some substantial investment opportunities. The blunt truth is that FDI is a seller's market. Countries, like companies, must compete for investment. Investors want a competitive return and a fair, clear, predictable legal framework. The Kingdom is to be applauded for the efforts it is making in this direction. His Highness Prince Abdullah bin Faisal bin Turki has achieved a lot in two and a half years as Chairman of the new General Investment Authority. We look forward to the development of more investment opportunities in - among others - the water, power, telecommunications and transport sectors – and, of course, gas. You will have gathered, I hope, that I am very much an advocate of international trade and investment, and the freedom of people to conduct business across borders with as few encumbrances as possible. The wealth-creating aspects of international trade and investment are, I believe, self-evident. But they also offer us the opportunity to create closer links between peoples, and to stabilise international relations in these very uncertain times. It is singularly appropriate that we should be discussing world trade in Jeddah, which has been a thriving and cosmopolitan port for thousands of years. Jeddah was built on trade. The energy and vibrancy that we all feel here is an echo of the millions deals done and bargains struck here generation after generation. But there is also a distinct atmosphere here – one that you will find in all the major sea-faring cities of the world - the atmosphere of a successful melting pot where cultures and peoples mingle and business thrives. Very much like London. For business partnership helps us understand each other. I daresay that when European traders first encountered the souks and bazaars of the Middle East, they were astonished and delighted by the sights, sounds and smells that greeted them. Language, too, must have been mystifying. But the language of business is universal, and this universality helps create personal, as well as commercial, relationships. Despite all the differences in language and culture, traders always find a way to do business. Today, we face enormous challenges on the international stage, and although trade cannot solve the world's problems it can make a huge contribution to peace and development. In the aftermath of the terrorist attacks in New York, Washington and Pennsylvania, we saw a robust response from the trading nations of the world. Of course after that outrage it was not - could not – be "business as usual" – but business did go on. Of course we must be vigilant about the terrorist threat, but the UK remains as open as possible. This is one of the reasons we continue to encourage Saudi students to visit the UK. So we can learn from one another. Education and training are important to your reform agenda. The UK wants to be at the forefront of providing support and encouragement in this area. Just as international trade and investment can bring enormous benefits worldwide, so they are good for businesses themselves. Because companies engaged in international trade tend to be more productive and more competitive than those who are not. They spend more on innovation, they are more capital intensive and their productivity is higher. By choosing to compete in world markets, they take advantage of innovation overseas and adopt it for themselves. This encourages that vital transfer of technology, which I have discussed with businesses here in the Kingdom. Innovation creates trade that in turns creates innovation in a virtuous business circle. As well as working for a more favourable international framework, we are working hard on our domestic competitiveness agenda – thinking globally, acting locally, in the words of this Forum's theme. My own Ministry devotes considerable resources to helping business in practical ways - advising on products and markets, creating business networks, helping business to help itself through better investment in people and skills, encouraging best practice and a sharper business edge. The better our companies become, the better able they will be to exploit the opportunities we are trying to create on a global level. And overseas in over 240 posts in over 140 countries, 1 in 3 British diplomats are there to give advice and help to our business communities. Our effort is focussed particularly on small and medium sized enterprises. This is because SMEs are key drivers of innovation and job creation. I am delighted that last year we shared some of our experience here in Saudi Arabia. Experts from our Small Business Service discussed SME support with a wide range of Saudi businessmen and officials. They then presented recommendations at the Future Vision conference on the Saudi economy in October. One of their main proposals was the creation of a small business agency on the British model. I hope we can help if Saudi Arabia decides to take this forward. In addition, experts from the Prince of Wales's very successful operation to support young entrepreneurs – the Prince's Trust - have been advising on the establishment of a similar Saudi operation under the patronage of His Royal Highness Prince Abdul Aziz bin Abdullah. One element of improving a country's competitiveness is ensuring that all its human resources are used to maximum effect. I am delighted that the first day of this Forum was devoted to businesswomen. I very much look forward to meeting a number of the women delegates later this morning. Releasing women's potential for wealth creation is a major priority for my government in the United Kingdom. I am very happy to be closely associated with the work being done to promote links between British businesswomen and their Arab counterparts. The British government launched this initiative five years ago. I have had the pleasure of addressing two recent conferences in London, which included Arab businesswomen - many of whom came from Saudi Arabia. I am very encouraged that those events have contributed to similar events here in the region. I have already heard of the success of this Forum's women's day. Some of the British participants have told me that the excellent discussions clearly demonstrated the willingness and ability of Arab women to play a growing role in the region's development. It is exciting to see how women here and elsewhere have exploited the new opportunities of e-commerce. In Britain, the government has set itself challenging targets to deliver its services on line and increase support for e-commerce. A high level team reports directly to the Prime Minister on this work. One of its members was a keynote speaker at the Saudi government's conference on e-commerce and e-government last year. We have also arranged reciprocal missions of Saudi and British companies and experts. The development of SMEs; the growth of e-commerce; the expanding role of women in the Arab world: these are all part of the broader process of reform which is so important – as highlighted in the report produced by Arab scholars for the UNDP last year. I was excited to read last week about Crown Prince Abdullah's "Charter to Reform the Arab Situation", which will be reviewed at the next Arab summit in Bahrain. We wish every success to this bold Saudi initiative, which calls for liberalisation both between and within Arab countries. This Iocal action in the Arab world could have enormously beneficial global consequences. We in the United Kingdom will support it in any way we can. |
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Other speeches by The Rt. Hon. Baroness Symons of Vernham Dean
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