Opening speech by Foreign Minister Frank-Walter Steinmeier at the Ambassadors Conference Business Forum
-- Translation of advance text --
Cara Signora Presidente,
Members of the German Bundestag,
representatives of German companies and trade associations,
guests of the Ambassadors Conference Business Forum,
For over ten years, the Ambassadors Conference Business Forum has been the place where representatives of German business meet the some 230 heads of German missions. This conference is far more than merely a nice opportunity to network in pleasant surroundings. There are enough other events for that in Berlin’s political scene. Instead, when the worlds of diplomacy and business meet here, we diplomats are keen to find out what’s on business people’s minds. We need to understand exactly what problems you are facing.
We need to be aware of your concerns and expectations if we are to communicate them to the outside world. After all, this is also one of the many tasks of German foreign policy.
At the same time, you, the representatives of companies, have an opportunity to hear at first hand what the conditions are like in the places where you are already doing business or want to become active – and to do so in a very condensed form here in the Federal Foreign Office. In some cases, this saves you a journey of several thousand kilometres.
Put briefly, this is the place where we can discuss what we expect of each other, so for my second term of office it didn’t cross my mind not to uphold this tradition, which started in my first term.
So, welcome to the Federal Foreign Office!
Ladies and gentlemen,
Traditions do not survive simply by being upheld. Every now and then, they need to be dusted off in order to remain viable and valid in changed times.
The first change that we made to this year’s Business Forum is that for the first time, the opening speech will not be given by a man. Business is becoming more feminine, including here!
It is therefore a great honour and pleasure for me that the President of BUSINESSEUROPE will be the first woman to open the Business Forum – benvenuta, cara Signora Marcegaglia!
Emma, we met in the midst of the European crisis. At the time, you were president of the Italian industry association. You are a businesswoman yourself. You and your brother manage one of the world’s leading steel-processing companies. You were recently appointed chairperson of the board of Eni, Italy’s largest company. And you have monitored the impact of this crisis on the real economy like few others.
The two of us are united in the belief that the long-term stability of the European Economic Area will depend on whether European industry succeeds in repositioning itself. In your speech, you will explain where we stand as regards this issue and how we should evaluate it in view of the shifts of power in the global economy.
When I started my second term at the Federal Foreign Office, I returned to the same office. However, the world around it had changed dramatically. The world is experiencing a level of disorder not seen for decades. Crises and conflicts have moved tangibly closer to us. The conditions under which foreign policy must be made have changed radically.
In a world that has not yet found a new order 100 years after the First World War and 25 years after the end of the confrontation between East and West, we Germans are having a hard time defining what responsibility means to us. In these changed power structures, we don’t have a compass to show us exactly what is and isn’t right and necessary, what is ethical, or what politics can and can’t achieve.
At the same time, many of our partner countries are looking expectantly to Germany in the current situation. And there are many reasons for this.
Our partners in Europe are preoccupied with the economic crisis and its consequences. The United States continues to be the only superpower but it, too, is currently experiencing that even governments in the Middle East are not prepared to simply follow its lead and that it has limited influence on the world's trouble spots. The resources for international conflict management are also limited. That is why more and more people are looking to us. They call for a level of engagement commensurate with our expanded status – and they call for engagement where others have fallen by the wayside. An intelligent and active foreign policy is now no longer merely an option, but an obligation. It’s a must in the light of the responsibility we share with our partners and, what’s more, it‘s in our own interest in this dangerous world. Many people would like to think that we live in some kind of Shangri-La, safe from the turmoil of the world. But I fear this is an illusion. That is why it’s a pity that the discussions about Germany’s responsibility in the world are sometimes tinged with a hint of panic, as if responsibility automatically means deciding to send German soldiers off on military adventures across the globe.
And because this is the case and because we cannot simply note this fact and then ignore it, the Federal Foreign Office and I consciously launched a debate. In the Review 2014 process, we are examining the principles of our foreign policy activities. At a time when we face the possibility of a new division of Europe, at a time when the situation in the Middle East and the Arab world is undergoing fundamental change – at such a time, we cannot shy away from questioning old certainties. And this is precisely the point of this year’s Ambassadors Conference. For the first time since the review process started, all 230 German ambassadors are here in our Berlin headquarters, and we are having a very lively debate on what all these developments mean for our work.
Ladies and gentlemen,
At this point, the business people here with us today may well be asking themselves why Steinmeier is telling them this, especially here at the Business Forum. Surely this forum is about other things, such as export figures and trade? And apart from that, surely diplomats have their hands full at the moment? During a crisis like the one we are currently experiencing, can foreign policy afford to take time for navel-gazing?
Naturally, I have asked myself the same questions. And I have asked myself and my colleagues
whether foreign policy should not be a tower of strength, especially now, and ignore or at least postpone critical and self-critical questions.
In order to answer these questions, I want to tell you about two recent reports. The first was a major study on global flows by the McKinsey Global Institute, which concluded that Germany tops the overall list as regards connectedness. What I found particularly interesting about this study was that the researchers didn’t only measure the classic flows of imports and exports. You know better than I do how strong we are in that field. Instead, McKinsey also measured two other flows, namely of people and data. And Germany is among the leading countries in these fields, too. Did you know that the percentage of people living in Germany who were born abroad is now as high as it is in the classical immigration country, the United States? Or that Germany attracts the third-largest number of students from abroad in the world? Or that Germany has the second-largest volume of international data flows?
To sum up, no other economy is as connected with the world as ours is. This is our greatest strength – but at the same time, it is also our weak point. Every geopolitical change has a greater impact on the German economy than it does on the economies we compete with. This means that we cannot be indifferent to what is happening out there in the world. And it means that German business in particular cannot and must not be indifferent to the debate that we are conducting in Germany on responsibility in the world. So I would very much like to encourage you to get involved in this debate.
I mentioned a second report. This was commissioned from the Körber Foundation by my Policy Planning Staff, and it showed something different. Our aim was to find out what Germans expect of our foreign policy. In response to the question, “Should Germany step up its international engagement?”, 37 per cent said “Yes”, but 60 per cent said “No”.
So no country is more connected than Germany is – and at the same time, almost two-thirds of our citizens want us to stay out of world affairs?
That, ladies and gentlemen, is the balancing act German foreign policy currently has to perform.
We need to talk about the fundamental antagonisms involved here, and how we can overcome them and bridge the gap between expectations and willingness – and we also need to discuss these issues with German business.
Our day-to-day work in promoting foreign trade and investment shows us that German companies are increasingly facing considerable difficulties in many countries, despite the good market conditions. There are a number of reasons for this, including corruption, a lack of legal certainty, and state intervention that distorts the market. How do we deal with this? What does it mean for your sales and investments? And what conclusions should we draw from this phenomenon as regards our approach to such governments?
The old model was that policymakers create order, the economy creates profit, every country is responsible for itself, and good diplomacy ensures that everything remains as peaceful as possible. This model is no longer valid. In fact, it may never have been valid in the first place. Literally every topic of concern to us can no longer be seen as a purely national issue. The more global the problems are, the less they can be solved by individual players, and the more governments and companies need to act in concert. And this applies more to Germany than it does to any other country. I would now like to briefly present the implications of this for us in three hypotheses.
My first hypothesis is that rules and order are good for business.
If the world is a marketplace, then Germany lies at its heart. Our stall is one of the most impressive, and our contacts extend to every corner of the marketplace. It is very much in our interest that order prevails in this marketplace and that people are safe and have opportunities – all of this forms the basis on which our trade can flourish. As the most connected country in the world, Germany has more than most to benefit from a peaceful, free and rules‑based world order.
In the debate within Germany, there is often a misconception that this order is, as it were, par for the course. But in fact when we look out into the world, we see that this order is the exception rather than the rule in history. That’s why we have to invest in this order by implementing active policies. And Germany in particular should do more than other countries to provide what is needed to maintain it.
On the one hand, this means that we have to help resolve crises and conflicts. However, it also means that we have to help minimise the causes of many conflicts. Hence, it matters to us whether people around the world have access to education, employment and health care, or whether they have to flee from abject poverty and war.
This is especially apparent when we look at Africa, which is why we’ll be examining the situation there shortly in one of the four conference forums. The economic opportunities in Africa are huge – I saw this more clearly than ever during my visit to Africa at the end of March. In Africa, new partners with an understanding of business and good governance are gradually emerging. But the economic upswing has to benefit ordinary people. I’m convinced that German business can play a part in this.
My second hypothesis is that it’s important that what is profitable for some does not harm everyone else!
There is no global contract. But if there were, it’s clear that each participating country would insist that companies’ actions must benefit society as a whole rather than harming it. Don’t get me wrong: this isn’t a call for altruism. Business shouldn’t give handouts – it should invest responsibly!
In a world much less regulated by common rules than we would all wish for, but which – at the same time – is more interconnected than ever before, what we call “soft power” is increasingly important. If the “peaceful marketplace” is to become firmly established, it has to be more than just profitable. Rather, it also has to be the more convincing social model for people. And this hinges on our conduct on the ground. I believe that this concept makes perfect sense to each of you, to anyone operating at a global level in their company. It’s a concept which those in positions of responsibility have to keep in mind when making individual day‑to‑day decisions. However, it’s also a concept which can lead to considerable conflicts of aims in many production locations. We know that. And that is one of the reasons why we are focusing on the topic of business and human rights in one of our workshops today.
Especially with regard to Africa, however, I’d like to take this opportunity to remind you of the strengths of German entrepreneurship: German companies not only offer high‑quality technical solutions, as world market leaders tend to do.
For it’s also true to say that German corporate activities are not focused on the short‑term exploitation of resources, but that they are designed for the long term, marked by genuine social partnership and inextricably linked to aspects such as vocational training.
My third and final hypothesis is simple – Germany is not an island. I know that this is patently obvious when seen from a geographical or historical standpoint. In some people’s minds, however, it isn’t always so clear. Of course, that doesn’t apply to those present here today! The crisis of the past years is a good example. Some people believed – and still believe – that we are living in a kind of Shangri-La here in Germany.
But anyone with even a rudimentary understanding of economics knows that if other people are in the red today, we ourselves will have a problem in the future. Germany will never be able to remain strong in the long term if its European neighbours are doing badly. The result of our interconnectedness in Europe is that something like a “crisis of others”, a crisis that won’t affect Germany, no longer exists.
Ladies and gentlemen,
Foreign policy is not just about crises and safeguarding German interests in the world, for it also has to help maintain Germany’s ability to meet the challenges of the future. The Federal Foreign Office sees itself here as a translator and facilitator that conveys the expectations of the rest of the world regarding Germany’s innovative edge to our fellow Germans and, at the same time, helps German companies to make contacts abroad. This ability to meet the challenges of the future does not come about by itself. It has to be constantly readdressed.
We are rightly proud of what we have achieved thanks in part to the reforms carried out in the past. However, no one can rest on their laurels. Competitors and conditions change, and for that reason companies also have to constantly evolve and adapt their game.
The dream of the wonderful night of football in Maracanã came true because our team began a root-and-branch renewal a decade ago. But more than traditional German virtues such as hard work and discipline – yes, they still exist – were needed to win the World Cup. We played as a team: Müller and Klose on their own would not have been enough – players like Özil, Khedira and Boateng were needed to make our team complete. Likewise, business and policymakers have to be bolder than ever before about discussing how we can put together the best team for Germany. This includes issues such as migration, integration and international vocational training programmes.
However, it was not just talented individual players who made it possible for Germany to win the World Cup. No, it was their teamwork and ability to adapt creatively to new conditions which helped German football to gain a previously unknown lightness combined with exceptional efficiency.
German business has perhaps the best individual players in the world: brilliant young researchers; internationally renowned champions of industry; and the “German Mittelstand”, the small and medium‑sized enterprises that are the envy of the world. They form the backbone of our business team. Thanks to an intelligent industrial policy and strong and competitive German companies, the value chain has been preserved more completely in the German economy than it has almost anywhere else in the world – and this also was the result of plenty of practice as regards interaction with companies and different sectors.
And yet, we have to recalibrate this interaction if we want to remain successful in future. Brazil, France, Spain: each of these countries won a World Cup title during the last twelve years, and yet their teams didn’t do so well in 2014.
The pitch on which we have to redefine how our players interact is called Industry 4.0. Germany’s performance as a leading export nation will largely depend on whether we manage to transform the challenges of Industry 4.0 into opportunities and to incorporate them into all segments of the value chains.
This applies to companies of all sizes: large corporations, the small and medium‑sized enterprises usually run by families, and highly innovative start‑ups. For this, we need more people to set up businesses in Germany. And to that end, we have to look more closely at what is happening in Silicon Valley, São Paulo or Shanghai. We’ll talk in more detail about this important issue later on today.
Ladies and gentlemen, guests,
It is important to the Federal Foreign Office that we exchange views with German business – this isn’t just a service we offer. We are your partners out there in the world. We provide support; where necessary and feasible, we open doors; and we offer analyses and evaluations. For this we need your feedback and ideas, as well as your criticism.I would like to sincerely thank all our partners and backers. In particular, I would like to thank those companies whose material support has enabled us to have you as our guests here today, namely Airbus, Daimler, NXP, Siemens, SAP, Deutsche Telekom and the Metro Group.