Ambassador's Corner
WEEKLY MESSAGE FROM AMBASSADOR JOHN BRUTON
January 16, 2008
International Conference on “Jobs and Equity,” Santiago, Chile
Last week I visited
Chile, as a guest of the country's Council on Jobs and
Equity, to take part in a conference on lessons Chile might learn from other
countries on how to combine rapid economic growth with a fairer sharing of the
benefits between different sectors of society.
One of the most remarkable things about Chile is its tremendous willingness to
learn from other countries, to try novel approaches to solving apparently
insoluble problems, and at the same time to keep a firm grip on fundamentals,
like sound public finances.
Among the speakers I joined at the conference were Robert Solow, a Nobel
Prize-winning economist from the United States; Santiago Levy, who was Economic
Advisor to successive presidents of Mexico; and
Ad Melkert, who was Minister for
Social Affairs in the Netherlands and the leader of the Labour party.
The speakers met with President Bachelet. President Bachelet suffered greatly
for her political beliefs in her earlier life. As a leader, she is very relaxed and approachable. She
was undertaking a major reshuffle of her cabinet during our visit, so we had the
chance to observe Chilean political life at its most exciting. I also met with
the leader of one of the main opposition parties in Chile, Carlos Larraín Peña.
His party, Renovación Nacional, came second in the last Presidential elections.
In my presentation to the conference, I stressed the important rôle
education
plays in reducing inequalities in society over the longer term.
Ireland used the substantial funds it received from the European Union in the
1970s to
expand technological education at third level. This resulted in a
dramatic increase in the number of Irish people with third-level qualifications.
Today 40% of Irish people between 25 and 34 have a third-level qualification.
Within the EU, only Cyprus, Belgium and France have a higher
proportion than
that, whereas some important
EU Member States have percentages as low as 16% of
that age group with such qualifications.
While the expenditure on third-level education in Ireland in the 1970s and 1980s
did not have a huge immediate effect, it proved to be the key factor enabling
the Irish economy to commence very rapid growth in the 1990s.
In fact, by the late 1990s, there were so many people with third-level
qualifications that a shortage of people willing to do relatively unskilled work
arose. So, through the operation of supply and demand, wage rates for relatively
unskilled workers actually rose even faster than for those with skills, thanks
to the investment made in education twenty years earlier!
The European countries with the most noteworthy record in reducing income
inequalities through
government action are Denmark and Sweden. These countries
spend heavily on social transfers to the less well-off. For example, expenditure
on social protection comes to 33% of GDP in Sweden and 31% in Denmark, as
against just 19% in Ireland and an EU average of 27%. Through this spending,
Denmark and Sweden are able to reduce inequalities in income much more than
occurs in Ireland. While this achievement comes at the price of significantly
higher levels of taxation, it does not cause big reductions in underlying
economic growth. The Conference discussed the extent to which Swedish and Danish
models could be exported to other countries. The general consensus was that this
would be far from easy.
Peru
During my visit to South America, I also visited Lima in Peru where I had a
meeting with country’s Foreign Minister, José Antonio García Belaunde. We
discussed the fifth EU-Latin America Caribbean Summit (EU-LAC), which he will be
hosting in Lima on 16-17 May 2008.
Minister José Antonio García Belaunde’s office is in a beautiful old building
dating from the Spanish colonial era. I also had a tour of the old city,
including the magnificent Plaza de Armas and the Cathedral.
Chairman Tom Lantos
I was personally moved on hearing the news that
Tom Lantos is to retire from
politics
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at the end of the current congressional term, because of cancer.
The way in which Tom Lantos announced this difficult decision was characteristic
of the courage he had shown in his entire life. The story of how he and his wife-to-be, Annette, escaped from Nazi-occupied Europe is one of great drama. They
both endured great hardship, but never lost their positive attitude toward life.
One of the first invitations I received on arriving in Washington as Ambassador
was to accompany my wife to lunch in the congressional dining room with Tom and
his wife. I am sure all the European Ambassadors who have served in Washington
feel the same affection for Tom Lantos as I do, and wish him well in the future.
"Lead market" initiative to unlock Europe's economic potential
Last week the European Commission made a very interesting
announcement on the
promotion of new products in Europe.
One of the enduring difficulties in economic development is that of converting
technological advances into marketable products. Very often administrative
barriers
stand in the way, and some of these barriers can emanate from
multinational institutions, like the European Union.
The European Commission announced plans to foster the emergence of new products
by encouraging public procurement of those products, by developing interoperable
standards for them, and by improving legislation applying to them, in six key
areas:
• e-health;
• protective textiles;
• sustainable construction;
• recycling;
• bio-based products;
• renewable energies.
Buildings account for 35% of all Europe's
greenhouse emissions, so new
techniques in construction to conserve
energy could prove to be very valuable.
The recycling sector in Europe employs half a million people already, but there
are barriers to the introduction of new products in this market. I hope that
this valuable initiative, pioneered by Commission Vice President
Günter
Verheugen (left), will prove to be an outstanding success.
Please send me your
comments about this or any of my weekly messages or other EU matters. I
look forward to hearing from you!
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