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"How is life? Better than the alternative. It's the same with globalisation. That is the message I want to give here."
This is how Markku Pohjola, Deputy CEO of Nordea, began his speech on the theme of "Globalisation: More opportunities than threats" at the Nordea Union's Annual General Meeting.
As can be clearly seen from his approach, Pohjola painted a very positive picture of globalisation and its effects. He was followed as a speaker by the International Secretary of the Danish Finance Sector Union, Annette Mikkelsen, who presented a more balanced picture.
Markku Pohjola maintained that globalisation is here to stay and that development will continue unabated.
”My point is that those who take an active role will prosper. If you try to avoid it you become a loser,” he said.
He also said that the Nordic region and the Nordic economy have every prospect of becoming winners in the globalisation process.
"We are moving actively into the new markets and are reaping the benefits of the expansion of the global economy."
Pohjola believes that the future looks bright for the finance sector in particular, as the demand for financial services will grow more rapidly in the emerging markets.
He used India as an example. Practically all of the major companies in the world are increasing their presence there due to the low costs and the highly-skilled labour force. Most back office-work can be done anywhere in the world, he stated.
In answer to a question, Pohjola said that even Nordea could directly or indirectly outsource IT services and IT development to India, for example. He felt, however, that setting up Nordea call centres in India was a "long shot". He also emphasised that there are operational areas that will definitely stay put, and mentioned asset management and EE-banking services as being among these.
"If you really want to benefit from globalisation, then cross-border mergers are a natural element. Where a bank's headquarters are located is becoming less and less important," said Pohjola.
He presented figures showing that an increasing proportion of the personnel of major Swedish and Finnish companies are employed abroad. And he finished as he began:
"There is no alternative to globalisation."
Pohjola was asked whether he couldn't see any threats, for example in the form of growing unemployment in the West. He answered that unemployment is always "a concern", but that closed borders are hardly a better alternative than free trade and competition throughout the world.
Millions of jobs threatened
Annette Mikkelsen presented forecasts that clearly show that hundreds of thousands of jobs are threatened by offshoring:
Two million finance jobs in Western Europe will go offshore to low cost countries by 2008, according to a Deloitte Consulting report. UK financial firms will transfer 350 000 jobs (30 per cent) abroad by 2015. Germany, France and Italy are each expected to offshore about 140 000 finance jobs by 2015.
Low pay costs are often used as an argument for such moves, but Mikkelsen demonstrated that offshoring often entails unexpected expenditure.
She concluded that globalisation has both advantages and disadvantages.
Advantages include:
• It has the potential to become a win-win situation if proper employment standards are observed.
• Cost savings can be re-invested and create new jobs.
• Consumers get cheaper products and can consume more.
Disadvantages include:
• Not always profitable, unforeseen costs.
• Human consequences for those who lose their jobs
• Risk of a global "race to the bottom" for salaries and conditions.
"The expected results have been achieved in only half of the cases," she said.
A trade union strategy for dealing with the negative aspects of globalisation is to sign Global Framework Agreements, where global companies commit themselves to observing core labour standards wherever they operate and to opening doors to national unions to organise abroad.
Union Network International (UNI) has signed such agreements with seven companies, although none of these are banks. The British trade union Amicus has signed a similar agreement with the major bank HSBC, which has 218 000 employees in 79 countries. This agreement covers, for example, the right to be consulted in every case of outsourcing, two years prior notice of plans to globalise UK jobs and a focus on re-training.
Amicus has also drawn up a Negotiator's Checklist for such situations.
Annette Mikkelsen ended her speech by providing a number of answers to the question:
What can you do as a trade unionist?
- Demand lifelong learning.
- Get in early.
- Make sure that decisions are made on a rational basis.
- Negotiate good agreements for employees that lose their jobs
- Co-operate internationally.
- Organise, organise, organise.
Bengt Rolfer
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