SPEECH BY THE PRIME MINISTER, TONY BLAIR, TO THE ECONOMIC CLUB OF
CHICAGO, HILTON HOTEL, CHICAGO, USA, THURSDAY 22 APRIL I999
I am absolutely delighted to be the first serving British Prime
Minister to visit Chicago. I wanted to come here to the heart of
this great country. To a great cosmopolitan city and the capital
of middle America. Despite the absence of Prime Ministerial visits, there is a long British history with Chicago. We set up our Consulate here in
1855. Marshall Field opened their first overseas buying office in
Manchester in 1870. One of Field's shop assistants subsequently
opened his own store in London in 1909. His name was Harry
Selfridge. He employed the same architect who designed your City
Hall to build Selfridges, the landmark store on London's Oxford
That sort of interchange goes on today too. Chicagoland is the
headquarters of some of Britain's most important inward investors:
Motorola, Sara Lee, RR Donnelly. Nearly half the USD 124 billion
US firms spent on foreign acquisitions last year went on British
companies. We would like it to be even more. Nor is the traffic
all one way. British investment in Illinois generates some 46,000
jobs, making us the biggest foreign investor in the State. And the
London Futures Exchange is working alongside your Board of Trade
and Mercantile Exchange to lead the revolution in electronic
trading. The London Futures Exchange looks forward to receiving
early CFTC approval for its system to be installed here.
While we meet here in Chicago this evening, unspeakable things are
happening in Europe. Awful crimes that we never thought we would
see again have reappeared - ethnic cleansing, systematic rape, mass
murder. I want to speak to you this evening about events in
Kosovo. But I want to put these events in a wider context -
economic, political and security - because I do not believe Kosovo
can be seen in isolation.
No-one in the West who has seen what is happening in Kosovo can
doubt that NATO's military action is justified. Bismarck famously
said the Balkans were not worth the bones of one Pomeranian
Grenadier. Anyone who has seen the tear-stained faces of the
hundreds of thousands of refugees streaming across the border,
heard their heart-rending tales of cruelty or contemplated the
unknown fates of those left behind, knows that Bismarck was wrong.
This is a just war, based not on any territorial ambitions but on
values. We cannot let the evil of ethnic cleansing stand. We must
not rest until it is reversed. We have learned twice before in
this century that appeasement does not work. If we let an evil
dictator range unchallenged, we will have to spill infinitely more
blood and treasure to stop him later.
But people want to know not only that we are right to take this
action but also that we have clear objectives and that we are going
to succeed. We have five objectives: a verifiable cessation of
all combat activities and killings; the withdrawal of Serb
military police and paramilitary forces from Kosovo; the
deployment of an international military force; the return of all
refugees and unimpeded access for humanitarian aid; and a
political framework for Kosovo building on the Rambouillet accords.
We will not negotiate on these aims. Milosevic must accept them.
Through the air campaign, we have destroyed the greater part of
Milosevic's operational airforce; a quarter of his SAM radar
systems - the rest do not operate for fear of being destroyed; his
oil refineries and the lines of communication into Kosovo, his
military infrastructure including his means of command and
communication, and a good part of his ammunition dumps. The morale
of the Yugoslav army is beginning to crack. And the KLA is now
larger and has more support than when Milosevic started his
campaign. We have always made clear this campaign will take time. We will
not have succeeded until an international force has entered Kosovo
and allowed the refugees a return to their homes. Milosevic will
have no veto on the entry of this international force.
Just as I believe there was no alternative to military action, now
it has started I am convinced there is no alternative to continuing
until we succeed. On its 50th birthday NATO must prevail.
Milosevic had, I believe, convinced himself that the Alliance would
crack. But I am certain that this weekend's Summit in Washington
under President Clinton's leadership will make our unity and our
absolute resolve clear for all to see. Success is the only exit
strategy I am prepared to consider. We need to begin work now on what comes after our success in
Kosovo. We will need a new Marshall plan for Kosovo, Montenegro,
Macedonia, Albania and Serbia too if it turns to democracy. We
need a new framework for the security of the whole of the Balkans.
And we will need to assist the war crimes tribunal in its work to
bring to justice those who have committed these appalling crimes.
This evening I want to step back and look at what is happening in
Kosovo in a wider context.
Twenty years ago we would not have been fighting in Kosovo. We
would have turned our backs on it. The fact that we are engaged is
the result of a wide range of changes - the end of the Cold War,
changing technology; the spread of democracy. But it is bigger
than that. I believe the world has changed in a more fundamental
way. Globalisation has transformed economies and our working
practices. But globalisation is not just economic, it is also a
political and security phenomenon.
We live in a world where isolationism has ceased to have a reason
to exist. By necessity we have to co-operate with each other
across nations. Many of our domestic problems are caused on the
other side of the world. Financial instability in Asia destroys
jobs in Chicago and in my own constituency in County Durham.
Poverty in the Caribbean means more drugs on the streets in
Washington and London. Conflict in the Balkans causes more
refugees in Germany and here in the US. These problems can only be
addressed by international co-operation. We are all internationalists now, whether we like it or not. We
cannot refuse to participate in global markets if we want to
prosper. We cannot ignore new political ideas in other countries
if we want to innovate. We cannot turn our backs on conflicts and
the violation of human rights within other countries if we want
still to be secure.
On the eve of a new Millennium we are now in a new world. We need
new rules for international co-operation and new ways of organising
our international institutions.
After World War II, we developed a series of international
institutions to cope with the strains of rebuilding a devastated
world: Bretton Woods, the United Nations, NATO, the EU. Even
then, it was clear that the world was becoming increasingly
interdependent. The doctrine of isolationism had been a casualty
of a world war, where the United States and others finally realised
standing aside was not an option.
Today the impulse towards interdependence is immeasurably greater.
We are witnessing the beginnings of a new doctrine of international
community. By this I mean the explicit recognition that today more
than ever before, we are mutually dependent, that national interest
is to a significant extent governed by international collaboration
and that we need a clear and coherent debate as to the direction
this doctrine takes us in each field of international endeavour.
Just as within domestic politics, the notion of community - the
belief that partnership and co-operation are essential to advance
self-interest - is coming into its own; so it needs to find its
international echo. Global financial markets, the global
environment, global security and disarmament issues: none of these
can be solved without intense international co-operation.
As yet, however, our approach tends towards being ad hoc. There is
a global financial crisis: we react, it fades, our reaction
becomes less urgent. Kyoto can stimulate our conscience about
environmental degradation but we need constant reminders to refocus
on it. We are continually fending off the danger of letting
wherever CNN roves be the cattle prod to take a global conflict
seriously. We need to focus in a serious and sustained way on the principles
of the doctrine of international community and on the institutions
that deliver them. This means:
In addition, the EU and US should prepare to make real step-change
in working more closely together. Recent trade disputes have been
a bad omen in this regard. We really are failing to see the bigger
picture with disputes over the banana regime or hushkits or
whatever else. There are huge issues at stake in our co-operation.
The EU and the US need each other and need to put that relationship
above arguments that are ultimately not fundamental. Now is the time to begin work in earnest on these issues. I know
President Clinton will stand ready to give a lead on many of them.
In Kosovo but on many other occasions, I have had occasion to be
truly thankful that the United States has a President with his
vision and steadfastness.
- In global finance, a thorough, far-reaching overhaul and reform
of the system of international financial regulation. We should
begin it at the G7 at Cologne.
- A new push on free trade in the WTO with the new round beginning
in Seattle this autumn.
- A reconsideration of the role, workings and decision-making
process of the UN, and in particular the UN Security Council.
- For NATO, once Kosovo is successfully concluded, a critical
examination of the lessons to be learnt, and the changes we need
to make in organisation and structure.
- In respect of Kyoto and the environment, far closer working
between the main industrial nations and the developing world as
to how the Kyoto targets can be met and the practical measures
necessary to slow and stop global warming, and
- A serious examination of the issue of third world debt, again
beginning at Cologne.
Globalisation is most obvious in the economic sphere. We live in a
completely new world. Every day about one trillion dollars moves
across the foreign exchanges, most of it in London. Here in
Chicago the Mercantile Exchange and the Chicago Board of Trade
contracts worth more than USD 1.2 billion per day.
Any Government that thinks it can go it alone is wrong. If the
markets don't like your policies they will punish you. The same is
true of trade. Protectionism is the swiftest road to poverty.
Only by competing internationally can our companies and our
economics grow and succeed. But it has to be an international
system based on rules. That means accepting the judgements of
international organisations even when you do not like them. And it
means using the new trade round to be launched at Seattle to extend
The international financial system is not working as it should.
The Asian financial crisis of last year, and the knock-on impact on
Brazil, demonstrate that. The fact is that the Bretton Woods
machinery was set up for the post war world. The world has moved
on. And we need to modernise the international financial
architecture to make it appropriate for the new world. The lesson of the Asian crisis is above all that it is better to
invest in countries where you have openness, independent central
banks, properly functioning financial systems and independent
courts, where you do not have to bribe or rely on favours from
those in power.
We have therefore proposed that we should make greater transparency
the keystone of reform. Transparency about individual countries'
economic policies through adherence to new codes of conduct on
monetary and fiscal policy; about individual companies' financial
positions through new internationally agreed accounting standards
and a new code of corporate governance; and greater openness too
about IMF and World Bank discussions and policies.
We also need improved financial supervision both in individual
countries through stronger and more effective peer group reviews,
and internationally through the foundation of a new Financial
Stability Forum. And we need more effective ways resolving crises,
like that in Brazil. The new contingent credit line at the IMF
will assist countries pursuing sensible economic reforms and
prevent damaging contagion. But we should also think creatively
about how the private sector can help to resolve short-term
Secretary Rubin and Chancellor Gordon Brown both put forward ideas
yesterday. They highlighted the progress already made on improving
transparency and in developing internationally agreed standards,
particularly for the financial sector. But both identified the key
challenges going forward, including how to involve the private
sector in the prevention and resolution of crises. G7 Finance
Ministers will be discussing these issues next week. I want to see
agreement on the key outstanding questions reached by the Cologne
I hope the Summit will go further too in the case of Russia. We
simply cannot stand back and watch that great nation teeter on the
brink of ruin. If it slides into the abyss, it will affect all of
us. A democratic, outward looking, prosperous Russia is of key
importance to the West. We must not let our current differences
set us on a route towards the mutual hostility and suspicion which
has too often characterised our relationship in the past.
I very much hope that Russia and the IMF can reach an early
agreement on a new programme to provide macro-economic stability,
avoid hyper-inflation and encourage Russian companies and savers to
keep their own money in the country. This, however, will only be a
first step. I want to see a wider dialogue between Russia and the
G7 focussing on all of the structural and legal reforms that are
needed to improve the economic prospects for ordinary Russians.
Russia is a unique economy with its own special problems and its
own unique potential. We all need to build on the lessons of the
last few years and develop a long term strategy for reform that
respects Russia's history, her culture and her aspirations. If
Russia is prepared, with our understanding and cooperation, to take
the difficult economic action it needs to reform its economy to
build a sound and well-regulated financial system, to restructure
and close down bankrupt enterprises, to develop and reform a clear
and fair legal system and to reduce the damage caused by nuclear
waste - the G7 must be prepared to think imaginatively about how it
can best support these efforts.
We will be putting forward concrete ideas on how to do this at the
Cologne Summit - by opening up our markets to Russian products, by
providing technical advice and sharing our expertise with the
Russians, by providing support both bilaterally and through the
IMF, the World Bank and the other IFIs and the Paris Club for the
Russian reform efforts.
I believe passionately that we will all benefit hugely from a
thriving Russia making use of its immense natural resources, its
huge internal market and its talented and well-educated people.
Russia's past has been as a world power that we felt confronted by.
We must work with her to make her future as a world power with whom
we co-operate in trust and to mutual benefit.
The principles of international community apply also to
international security. We now have a decade of experience since
the end of the Cold War. It has certainly been a less easy time
than many hoped in the euphoria that followed the collapse of the
Berlin Wall. Our armed forces have been busier than ever -
delivering humanitarian aid, deterring attacks on defenceless
people, backing up UN resolutions and occasionally engaging in
major wars as we did in the Gulf in 1991 and are currently doing in
Have the difficulties of the past decade simply been the
aftershocks of the end of Cold War? Will things soon settle down,
or does it represent a pattern that will end into the future?
Many of our problems have been caused by two dangerous and ruthless
men - Saddam Hussein and Slobodan Milosevic. Both have been
prepared to wage vicious campaigns against sections of their own
community. As a result of these destructive policies both have
brought calamity on their own peoples. Instead of enjoying its oil
wealth Iraq has been reduced to poverty, with political life
stultified through fear. Milosevic took over a substantial,
ethnically diverse state, well placed to take advantage of new
economic opportunities. His drive for ethnic concentration has
left him with something much smaller, a ruined economy and soon a
totally ruined military machine.
One of the reasons why it is now so important to win the conflict
is to ensure that others do not make the same mistake in the
future. That in itself will be a major step to ensuring that the
next decade and the next century will not be as difficult as past.
If NATO fails in Kosovo, the next dictator to be threatened with
military force may well not believe our resolve to carry the threat
At the end of this century the US has emerged as by far the
strongest state. It has no dreams of world conquest and is not
seeking colonies. If anything Americans are too ready to see no
need to get involved in affairs of the rest of the world.
America's allies are always both relieved and gratified by its
continuing readiness to shoulder burdens and responsibilities that
come with its sole superpower status. We understand that this is
something that we have no right to take for granted, and must match
with our own efforts. That is the basis for the recent initiative
I took with President Chirac of France to improve Europe's own
As we address these problems at this weekend's NATO Summit we may
be tempted to think back to the clarity and simplicity of the Cold
War. But now we have to establish a new framework. No longer is
our existence as states under threat. Now our actions are guided
by a more subtle blend of mutual self interest and moral purpose in
defending the values we cherish. In the end values and interests
merge. If we can establish and spread the values of liberty, the
rule of law, human rights and an open society then that is in our
national interests too. The spread of our values makes us safer.
As John Kennedy put it 'Freedom is indivisible and when one man is
enslaved who is free?'
The most pressing foreign policy problem we face is to identify the
circumstances in which we should get actively involved in other
people's conflicts. Non-interference has long been considered an
important principle of international order. And it is not one we
would want to jettison too readily. One state should not feel it
has the right to change the political system of another or forment
subversion or seize pieces of territory to which it feels it should
have some claim. But the principle of non-interference must be
qualified in important respects. Acts of genocide can never be a
purely internal matter. When oppression produces massive flows of
refugees which unsettle neighbouring countries, then they can
properly be described as 'threats to international peace and
security'. When regimes are based on minority rule they lose
legitimacy - look at South Africa.
Looking around the world there are many regimes that are
undemocratic and engaged in barbarous acts. If we wanted to right
every wrong that we see in the modern world then we would do little
else than intervene in the affairs of other countries. We would
not be able to cope. So how do we decide when and whether to
intervene? I think we need to bear in mind five major
First, are we sure of our case? War is an imperfect instrument for
righting humanitarian distress, but armed force is sometimes the
only means of dealing with dictators. Second, have we exhausted
all diplomatic options? We should always give peace every chance,
as we have in the case of Kosovo. Third, on the basis of a
practical assessment of the situation, are there military
operations we can sensibly and prudently undertake? Fourth, are we
prepared for the long term? In past we talked too much of exit
strategies. But having made a commitment we cannot simply walk
away once the fight is over; better to stay with moderate numbers
of troops than return for repeat performances with large numbers.
And finally, do we have national interests involved? The mass
expulsion of ethnic Albanians from Kosovo demanded the notice of
the rest of the world. But it does make a difference that this is
taking place in such a combustible part of Europe. I am not suggesting that these are absolute tests. But they are
the kind of issues we need to think about in deciding in the future
when and whether we will intervene.
Any new rules, however, will only work if we have reformed
international institutions with which to apply them. If we want a
world ruled by law and by international co-operation then we have
to support the UN as its central pillar. But we need to find a new
way to make the UN and its Security Council work if we are not to
return to the deadlock that undermined the effectiveness of the
Security Council during the Cold War. This should be a task for
members of the Permanent Five to consider once the Kosovo conflict
This speech has been dedicated to the cause of internationalism and
against isolationism. On Sunday, along with other nation's
leaders, including President Clinton, I shall take part in a
discussion of political ideas. It is loosely based around the
notion of the Third Way, an attempt by centre and centre-left
governments to re-define a political programme that is neither old
left nor 1980s right. In the field of politics, too, ideas are
becoming globalised. As problems become global - competitivity,
changes in technology, crime, drugs, family breakdown - so the
search for solutions becomes global too. What amazes me, talking
to other countries' leaders, is not the differences but the points
in common. We are all coping with the same issues: achieving
prosperity in a world of rapid economic and technological change;
social stability in the face of changing family and community
mores; a role for Government in an era where we have learnt Big
Government doesn't work, but no Government works even loss.
Certain key ideas and principles are emerging. Britain is
following them. It is one the things that often makes it difficult
for commentators to define the New Labour Government. We are
parodied as either Mrs Thatcher with a smile instead of a handbag;
or as really old-style socialists in drag, desperate to conceal our
true identity. In reality, we are neither. The political debates
of the 20th century - the massive ideological battleground between
left and right - are over. Echoes remain, but they mislead as much
as they illuminate.
Let me summarise the new political agenda we stand for:
We are modernising our constitution. We have devolved power to a
new Parliament in Scotland and a new Assembly in Wales. We are
handing power back to local government, because we believe that
power should be exercised as close as possible to the people it
affects. We have introduced the concept of elected Mayors which,
strange as it may seem to you here in Chicago, has not existed in
the past in Britain. The first election for a Mayor of London will
take place next year. And we are removing the constitutional
anomalies from the past, like hereditary peers voting on
legislation, that have proved too difficult to tackle previously.
- Financial prudence as the foundation of economic success. In
Britain, we have put in new fiscal rules; granted the Bank of
England independence - and we're proud of it.
- On top of that foundation, there is a new economic role for
Government. We don't believe in laissez-faire. But the role is
not picking winners, heavy-handed intervention, old-style
corporatism, but: education, skills, technology, small business
entrepreneurship. Of these education is recognised now as much
for its economic as its social necessity. It is our top
priority as a Government.
- We are reforming welfare systems and public services. In
Britain, we are introducing measures to tackle failing schools
and reform the teaching profession that would have been
unthinkable by any Government even a few years ago. Plus big
changes to the NHS. For the first two years of this Government,
welfare bills have fallen for the first time in two decades.
- We are all tough on crime, tough on the causes of crime. The
debate between 'liberals' and 'hardliners' is over. No one
disputes the causes of crime. In particular social exclusion -
a hardcore of society outside its mainstream - needs a special
focus. We won't solve it just by general economic success. But
we don't excuse crime either. Criminals get punished. That's
- We are reinventing or reforming Government itself. The
Government machine is being overhauled. Here, Al Gore has led
the way. But the whole basis of how we deliver Government
services is being altered. For Britain, there is a special
dimension to this.
We also want to change the way in which Northern Ireland is
governed, and let me say something on this. We have made great
progress in bringing peace to Northern Ireland. The Good Friday
Agreement last year was a breakthrough. We have to make one last
heave get over the one remaining obstacle, so that we can establish
the executive and the North/South bodies and hand over power to the
elected Assembly. The stand-off on decommissioning cannot be
allowed to de-rail the process when we have come so far. Bertie
Ahern, the Irish Taoiseach, and I are determined to find a way
through. The people will never forgive the politicians unless we
resolve it. And I would like to thank President Clinton and the
Irish American community in the US for the great contribution they
have made to coming this far. I know you will assist us again in
the final straight.
And the final thing we all have in common, the new centre,
centre-left Governments, is we are internationalists and that
returns me to my original theme.
For Britain, the biggest decision we face in the next couple of
decades is our relationship with Europe. For far too long British
ambivalence to Europe has made us irrelevant in Europe, and
consequently of less importance to the United States. We have
finally done away with the false proposition that we must choose
between two diverging paths - the Transatlantic relationship or
Europe. For the first time in the last three decades we have a
government that is both pro-Europe and pro-American. I firmly
believe that it is in Britain's interest, but it is also in the
interests of the US and of Europe.
Being pro-Europe does not mean that we are content with the way it
is. We believe it needs radical reform. And I believe we are
winning the battle for economic reform within the EU. Two weeks
ago the Conservative Spanish Prime Minister and I issued a joint
Declaration on economic reform. Shortly, the German Social
Democratic Chancellor Schroeder and I will be issuing a declaration
on the same subject. We all understand the need to ensure flexible
labour markets, to remove regulatory burdens and to untie the hands
of business if we are going to succeed. The tide of Euro-sclerosis
has begun to turn: the Third Way in Europe as much as in Britain.
As to Britain and the euro, we will make our decision not on
political grounds but on the basis of our national economic
interests. We must, however, ensure that we are ready to enter if
we make the decision to do so. And the government has put a
national changeover plan in place to convert sterling that will
make that possible if we decide to do so.
I also pledge that we will prevent the European Union becoming a
closed fortress. Europe must be a force for openness and
free-trade. Indeed it is fundamental to my whole thesis tonight
that we can only survive in a global world if we remove barriers
and improve co-operation.
This has been a very broad-ranging speech, but maybe the time is
right for that. One final word on the USA itself. You are the
most powerful country in the world, and the richest. You are a
great nation. You have so much to give and to teach the world;
and I know you would say, in all modesty, a little to learn from it
too. It must be difficult and occasionally irritating to find
yourselves the recipient of every demand, to be called upon in
every crisis, to be expected always and everywhere to do what needs
to be done. The cry 'What's it got to do with us?' must be
regularly heard on the lips of your people and be the staple of
many a politician running for office.
Yet just as with the parable of the individuals and the talents, so
those nations which have the power, have the responsibility. We
need you engaged. We need the dialogue with you. Europe over time
will become stronger and stronger; but its time is some way off.
I say to you: never fall again for the doctrine of isolationism.
The world cannot afford it. Stay a country, outward-looking, with
the vision and imagination that is your nature. And realise that
in Britain you have a friend and an ally that will stand with you,
work with you, fashion with you the design of a future built on
peace and prosperity for all, which is the only dream that makes
humanity worth preserving.