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Historical archive

Prime Minister Jens Stoltenberg

Speech at ASEM Summit, Economic and Financial Issues

Historical archive

Published under: Stoltenberg's 2nd Government

Publisher Office of the Prime Minister

Laos, 5 November 2012

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Ladies and gentlemen,

It is a great honour for me to be the first Norwegian prime minister to participate in an ASEM Summit.

The global economy has not recovered from the financial crisis. In spite of the significant policy steps that have been taken, the growth is still low and the unemployment high.

The financial crisis has shown how interconnected the world has become, and how quickly a crisis can spill over from one country to another.

As political leaders, we must respond to these challenges in a number of ways. I will focus on three important points to support this: 2


Firstly, we need to join forces in strong, multilateral institutions that promote economic cooperation and where all countries are represented. The IMF should be the key forum for global financial and economic cooperation.

I am encouraged by how well the IMF has stepped up to the challenges of the past few years.

It has provided sound analysis and strong policy advice. And it has increased its lending capacity.

This year, Norway has doubled its total lending commitments to the IMF.

Secondly, we must stimulate trade and open new markets. In the last few decades, many Asian economies have grown rapidly and entered the global marketplace. This highlights the benefits of free trade.

Thirdly, we need to continue our efforts to safeguard financial stability.

Progress has been made in the form of the Basel III agreement. This should now be implemented swiftly.

In Norway, we emphasise the fact that the capital ratios should be understood as minimum standards, allowing countries to set higher requirements when needed. More work must be done to break the vicious cycle whereby profits fall into private hands when times are good, and losses are picked up by the taxpayers and governments in times of crisis.

During Norway’s banking crisis in the early 1990s, existing share capital was written down to zero when a bank was recapitalised by the state.

These decisions were tough, but necessary to create the right incentives and ensure risk sharing.

A number of tough decisions are also necessary as we address such issues as financial institutions that are "too big to fail", cross-border banking and resolution mechanisms.

The road to global economic recovery is still long. But we will get there.

As we evaluate how far we have come, employment should be our most important benchmark. Human capital is our most important source of growth and welfare, also in Norway.

Let me give you one example: In more and more countries, labor force is ageing. A growing proportion of the population will depend on a shrinking labor force. This only increases the need to bring more women into the labour market.

Giving more women opportunities to complete their education and find a job helps them to realize their rights. But it is also smart economics.

In the 1970s Norway had one the lowest rates of female participation in the labour force among the industrial countries. Today we have one of the highest rates in the world.

Even for a resource-rich country like Norway, a high level of female participation is important for maintaining a high standard of living.

Norway’s higher female participation in the labor force compared to the OECD average represents a higher contribution to our economy than that of our oil and gas resources.

The current crisis has led to a huge waste of human talent. In the advanced economies, 27 million people have lost their jobs. I fear that many young people might never enter the labour market at all.

For both the individuals concerned and society as a whole, the costs are substantial.

A jobless recovery is not a real recovery.

The ASEM meeting here in Laos is a great opportunity to address these issues. Representing 60 per cent of the world economy, it is the place to find common solutions to address the global economic challenges.

Thank you.

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