Interview for CCTV-9 (Dialogue)
Beijing, 26.10.2008 | interview
Tian Wei (Host): Welcome to another edition of Dialogue on CCTV International. I’m your host Tian Wei. The 7th ASEM summit has concluded successfully in the Chinese capital on Saturday. Attending the summit are state leaders both from Asia and Europe, including the President of Slovenia, who is also on a state visit to China. And I’m very glad to be joined here by Danilo Türk, the President of Slovenia. But before we go to a discussion with him let’s take a look at this background report.
Hello, Mr President. Welcome to Dialogue.
President of the Republic of Slovenia, Dr Danilo Türk: My pleasure.
Tian Wei: You are here to attend the 7th ASEM summit held in Beijing. What do you see, briefly, as the major achievement, you think, from the summit?
Dr Danilo Türk: I believe that the first achievement was its timeliness. It provided a forum for consultations, for exchange of views at a critical moment when the entire world is discussing the global financial crisis. Obviously, policies, which governments put in place, are now, for the time being focused on the national needs. But we are already starting consultations on how to approach international aspects and what to do at the global level. So I think that this forum provided an opportunity for an exchange of views and preparation for subsequent meetings on this matter.
Tian Wei: Right. And you are here also for a state visit, which will bring you to many parts of China.
Dr Danilo Türk: Correct. Well, I have met the President of China and the Prime Minister. I plan to go to Chengdu in Sichuan Province and then finish my trip in Hong Kong. So, I will see several parts of China in a five-day visit and I think that this will be a very important, very useful visit for me.
Tian Wei: Sounds very exciting. Just as the exciting results of this specific 7th ASEM summit. You have a joint statement with all the other state leaders coming to the summit, one concerning the financial crisis. All of you supported, according to the statement, the November 15th summit in Washington D.C. about the current financial crisis. But are you seeing any possible concrete result out of that meeting as so many people now are already talking about that one.
Dr Danilo Türk: Well, I hope that the Washington summit will provide a way towards establishment of new and better principles and rules governing the international financial system. Obviously, today and yesterday when we discussed these issues we were not able to discuss any specific proposals. That will come later. But it is important that we get the same sense of direction, that the international financial system should become more rule-based, should have stricter principles, there should be more international supervision and so in that sense the system will be changed. Now, changing of that system may take a while. You cannot expect that to happen overnight but the important thing is that the direction is being set and ASEM7 has helped in that regard.
Tian Wei: You talk a lot about the monitoring and the overall system change. There has been a lot about debate, which is what should be the role of the government and what should be the role of the free market. We had once the pendulum is swaying to the very end of the free market. And how far do you think this pendulum might sway back to the governments? What do you think should be the role of the government?
Dr Danilo Türk: Well, the role of the government should be regulatory. I don’t think that there is anything new about this. It’s just that the governments left too much space to market forces and we now see that this is simply inadequate. We have, as a result of this, free market excess. There were many excesses that happened, problems that ultimately taxpayers, citizens, people for whom the governments are responsible have to pay money. This is not a situation, which we would like to repeat. Therefore stricter controls, better insights, more transparency, all these are needed and governments will have to provide the appropriate regulation.
Tian Wei: And as you may know the debate is already going on. It’s not only about the regulations anymore. It is even more than that, people are talking about changing the current international financial system. From your perspective of, in Slovenia, how do you see the possibility of the change of this system? And where is it going?
Dr Danilo Türk: I think that one has to compare two international institutions: World Trade Organization on the one hand, which has undergone a very profound change in the past two decades. We now have many more rules and much more effective institutions for dispute settlement and other institutions dealing with trade in goods and services. The international system has developed very far from where it was some 20 years ago. If one looks at the financial part one can see that the International Monetary Fund hasn’t evolved very much. It has more or less remained what it was two decades ago. Obviously, the lending policies have changed and they can change again so as to respond to the current needs. But very probably we need institutional change, which will give a stronger voice to countries like China, for example, and other countries that have to be part of this financial system and its decision-making. So, I think that the time for institutional change is coming and it will have to be worked out with some degree of care and precision.
Tian Wei: Well put, Mr President. And now we see it’s not only the international system that needs some improvement, to say the least, but also each individual economy. I was reading some press reports from the both Central and Southern European countries. There have been some difficulties with the economic growth rate just as the rest of the world. There has also been some slumber of the consumption capabilities. From someone, from a country, Slovenia, very exciting economy, that is experiencing your transformation, how do you see these two difficulties right now?
Dr Danilo Türk: Now, Slovenia has an advantage, it has a dual advantage in fact. Slovenia is a member of Eurozone, so we have euro as common European currency and that provides a layer of protection for the national economy in our country. Secondly, we have a fairly conservative banking sector. Our banks did not engage in more adventurous types of lending and other types of financial innovation. And that means that they are quite healthy right now. We, of course, have to protect the banking sector in Slovenia and that’s being done. The government has issued guarantees for the savings and deposits in the banks. So, at the national level we have done what is needed to protect our economy and we believe that in that sense we are on a good footing. On the other hand the slow-down in growth is likely to be a global phenomenon, which is also probably going to affect Europe and our own economy.
Tian Wei: Right. It’s actually affecting the Chinese economy at this moment.
Dr Danilo Türk: Yes, although it is not yet clear how far down it will go and we, I think, have to do everything to make sure that the growth rate does not decrease too much. And I think that at this kind of time it’s important to keep in mind the advice of John Maynard Keynes and his suggestions about the role of governments in such a situation. The governments should not allow consumption levels to be reduced to a point at which the entire economy suffers. Now, exactly what kind of measures is appropriate will be for each government to work out.
Tian Wei: What about for you?
Dr Danilo Türk: We are having a discussion on this matter. There are two schools of thought in Slovenia. Some people believe that austerity with regard to public spending is necessary, others are suggesting that the economy has to be protected also by government spending and we haven’t yet concluded that discussion.
Tian Wei: It is very hard to make a decision now that won’t have a negative impact, let’s say a few years from now, especially when it comes to the spending and the consumption.
Dr Danilo Türk: Correct. It think this discussion is still at a fairly early stage. So, in Slovenia we certainly do not have definitive answers. I’m not sure whether any economy around the world has a definitive answer at this point.
Tian Wei: And that’s why we have all of these summits, to discuss about it.
Dr Danilo Türk: Exactly.
Tian Wei: But there are two at least concrete difficulties that maybe your economy is facing. One are the ever more expensive intervened loans in the international market. And for a country like you, which is developing quite fast, certainly that is going to be a difficulty. On the other hand your country, your economy depends a lot, just like China, on the export. And with the slow-down of economy worldwide this is going to be another difficulty. How do you see these two issues?
Dr Danilo Türk: We are concerned. These two issues are very real. We think that export is a must for Slovenia. We are an export-oriented economy and we are likely to look for additional markets. I don’t think we have explored all the markets that are available. Slovenia is not a large economy so it shouldn’t be too difficult to find a market niche outside those areas to which we have been exporting so far. And secondly, as far as the interbank loans are concerned, we hope that international measures will stabilise the world banking system to a point at which the actual flow of money will be adequate so that real economy doesn’t suffer. At the ASEM7 meeting here in Beijing a lot of discussion was devoted to that and there is practically total agreement in that regard. So, let’s work out measures to ensure that the financial flows continue.
Tian Wei: Interestingly, just now, Mr President, you talk about your economy and its relations with euro because you are right now in the Eurozone. And before your country joined the Eurozone there were some politicians in your country who said this, if I could quote here, " This is the first time," he said, "that we have our destiny in our hands", he said. "Never was the neighbourhood, the region, Europe, so kind to small countries," he said, "we are aware of that and want to use that opportunity." However, we’re talking about now, in financial crisis, which is hunting every country. So is that true, is that care for relatively small countries still there in Europe, in the Eurozone, for example?
Dr Danilo Türk: Yes, it is. And now we can clearly see that those small countries in Europe that are not members of Eurozone are facing more serious problems. Eurozone means protection and we now can say empirically, our experience has confirmed the kind of optimistic view, which you quoted. The answer is yes, economies outside Eurozone have more serious problems.
Tian Wei: Now, you, when entering the Eurozone, you have done some great job. One is, it represents a break up from the past. It’s an honour for your country to be with the European family. On the other hand also you have managed to grow the economy, increase the growth rate, while at the same time decrease the inflation. However, many other people also say, "Well, the life has become more expensive in Slovenia.” And also on the other hand the Eurozone policy, which is one size fits all, as they put it, is still not tested out so far. So, how do you feel about these pros and cons, even now you are sitting in the Eurozone?
Dr Danilo Türk: I think that on balance we have gained from being member of Eurozone. There were some concerns about the level of inflation that we have experienced in the last year or so. But that inflation was not primarily a result of our acceptance of euro as our currency but came as a result of other factors. There was heavy investment in construction and in other types of activity, which as a whole then led to higher prices. In short, I think that euro has not affected us in that sense negatively but it has provided protection. We feel safer in Eurozone. We don’t think that if the control functions, which are now vested in the European Central Bank in Frankfurt, were attained in Slovenia that we would be better off. We do not feel threatened by any authority that exists in the Eurozone.
Tian Wei: And inside the Eurozone there have been, Mr President, some suggestions of either setting up sovereign wealth fund, suggested by the French President Mr Sarkozy, and also some other measures to fend off the financial crisis. Do you think that might be workable or you think that we are still, Europe is still so far, too far from where the suggestion is?
Dr Danilo Türk: Well, the first impression is that euro is not prepared for something like that. But we live in a time when things are changing more quickly than before. As you know, the efforts to find a solution to the current financial crisis may require a degree of innovation. So I would not want to rule out any innovative idea that exists, although Europe is not well prepared for innovation at this very point. We need more discussion among ourselves.
Tian Wei: And you’re watching Dialogue. Our guest today is the President of the beautiful country Slovenia and we’ll be back right after this break.
Welcome back to Dialogue and welcome back as well, Mr President, the President of Slovenia. Just now, Mr President, we’ve been talking about the economy in your country. I know that you have a lot of observations of what is going on in China because your country shares a lot of similarities with the economy of China. All depends on a lot: on the investment and also export. How do you see China’s measures so far when it comes to fend off the negative influences of the financial crisis?
Dr Danilo Türk: First of all, I would like to suggest that we don’t make this analogy too strong. I mean, China is a huge economy, a huge factor of the global economy and Slovenia’s economy is small. So one has to understand the scale, the difference of scale. Given that we have to understand that whatever China does to stabilise its economy helps the global system. I think the global economic system has nothing to gain from unstable China. So we have to be very attentive and very understanding of the government’s measures to secure stability and to secure growth in China. So, I think that these are strategically the important foundations upon which the international economic system can be built. I don’t think that any criticism at this point would be warranted.
Tian Wei: Well, at the same time Europe is China’s largest trading partner, including from Slovenia. So how do you think, earlier you’ve been talking about the establishment of the so-called new international financial system, how do you think China and Europe possibly can work together for a better possibility?
Dr Danilo Türk: I think they have to talk a lot more, they have to exchange ideas about what kind of institutional change will be necessary. I think how to reshape the International Monetary Fund for example, how to develop the practices, the policies of the World Bank, whether there is any need for an institutional change in the context of the World Bank, whether there is a need for an additional international institution of some kind. I believe that the institutional side is always the most difficult side and it comes towards the end. Once it is clear what kind of policies are necessary on a long-term basis and what kind of rules will there be, I think that institutional issues are not the first ones to be resolved. But having said that I think China will have to have a very strong voice in any discussion on the reshaping of international institutions.
Tian Wei: Beside China how do you think China and Europe possibly can have an even stronger voice combined together? Are there some ultimate interests between the two that would make these two come together?
Dr Danilo Türk: I think that both China and Europe have interest in stable growth and healthy growth. Europe, obviously, is an economy, which doesn’t have very high growth rates compared to China, for example, but this is because it has achieved a great deal already. China, as we are always reminded, is a developing economy, it’s an emerging market, it’s whatever terminology you use, it’s an economy, which needs high growth rates. So, I think, from Europe we have to see China as a country, as an economy, which genuinely needs high growth. And we have to support those policies, which provide high growth rates in China, which in term means better export possibilities for Europe, better investment possibilities for Europe. So in that sense I think we have common interests, we have very strong base of common interest and I think that should be explored and also developed.
Tian Wei: Reforming the old system can always be the most difficult task. And in a joint statement issued by the 7th ASEM summit here in Beijing you have, all of you state leaders supported that the IMF, organisation that you’ve mentioned just now, very frequently, still being, playing a central role for those economies who are crying for help in this financial crisis. However, many other also point out the IMF had a credibility problem, beginning from the Asian financial crisis 11 years ago.
Dr Danilo Türk: Correct, there is a credibility problem and there is hope that that credibility problem can be removed. It can be removed by additional financial facilities, additional lending facilities of the International Monetary Fund, by additional policies adjusted to the needs of our time. This is no longer the time when cutting social spending was the only policy that the International Monetary Fund was advocating. And finally, this is a time perhaps to look at the quota system and see how the quota system could be reviewed again, perhaps changed, with different arrangements relating to special drawing rights for the future. So, all these things should be looked together as a set of issues, which are vital for the future of the International Monetary Fund. The International Monetary Fund is not written off. Nobody wants to write it off but if the credibility problem is to be solved one has to think about all these different types of change, some of which relate to policy and resources, which can mobilised on a short-term, but others would require a longer-term vision.
Tian Wei: Just now we’ve been talking about the achievements, Mr President, of this time’s 7th ASEM summit held in Beijing but now let’s talk about the achievements your great country Slovenia has made during your presidency of the European Union in the first half of this year. What do you think might be biggest result that you have got during presidency? And it was exciting to be the president of the presidency of the European Union by the way.
Dr Danilo Türk: Yes. It was very exciting but it was not as exciting as it is now. And I’m not complaining. I should also explain that because at that time we didn’t have the financial crisis that we now have. Although the difficulties were expected they did not erupt yet. So the European Union was very much focused on the issues of environment, on greenhouse gases, on establishing a system that would allow European Union members to reduce greenhouse gas emissions and in that way prepare the Union for global negotiations on global warming. So we worked very hard on a timetable, which would ensure that European Union has proper policy of reduction of greenhouse gases in place. And if that happens European Union, obviously, will have a leading role in the subsequent negotiations. That was our vision and we were very happy that that succeeded. We negotiated that timetable, we succeeded with it, we started to implement it. The problem now is that sometimes it appears that global warming issues are not as urgent as the ones resulting from the current financial crisis. So, we have to make a double effort and that’s why the current presidency is tougher. Our view is that we have to persist with the agenda as developed under Slovenian presidency on the issues of global warming. It is more difficult to do than was before but it is equally urgent.
Tian Wei: You are really someone that is very experienced in handling all of these multicultural and multilateral issues because, if I remember right, you were serving as the ambassador for your country in the UN and presiding over quite a number of Security Council meetings.
Dr Danilo Türk: Correct.
Tian Wei: And meanwhile you were also later working for your country in the UN though serving as UN Assistant Secretary General for politics or political affairs. How do you compare, it will be very interesting, your experience of serving as the president of a EU presidency country, what’s your experience in the UN?
Dr Danilo Türk: Well, there is nothing like the UN. And I was lucky enough to be Assistant Secretary General to Kofi Annan who was Secretary General of the UN involved in many innovations. So, we worked very actively on prevented diplomacy, developing new techniques, new practices in that regard. We worked a lot with regional organisations. I used to come to Beijing frequently for consultations on Asian issues and so forth. So, I have been a part of very exciting process in the United Nations at the time when UN was improving. I hope that this process of improvement is continuing. In the European Union it’s very different because there we have an established system, which works according to rules, which have been determined earlier on. The agenda may be new but the system of work is well established. So, we had to work hard on an agenda like global warming or a preparation of negotiating mandates for partnership with Russia, for example, and other projects but that need not require that much innovation than the previous era in the United Nations had. So if you ask me what the difference is I would say: well, we had to innovate more in the United Nations and we have to be more conscientious about the system of negotiations in the European Union.
Tian Wei: Right. And how to work together for one mandate, that is very important. Talking about one mandate, of course, the Lisbon Treaty has always been there for everybody to agree and yet we only have 19 out of 27, if I remember right, who are ratifying the Lisbon Treaty. You have been working on this treaty as the presidency of the EU for quite some time. How do you, what do you think are the real difficulties?
Dr Danilo Türk: One has to understand that European Union is still an organisation of sovereign states. So when it comes to ratification of a treaty, even Lisbon Treaty, which is a reform treaty of European Union, then one has to be very careful because the ultimate decision belongs to the national parliaments of Member States. In that sense sovereignty of Member States has not been reduced. And in those countries where they need to consult the entire population they are doing it. In other words, European Union is relearning the lesson of its own nature, a nature of a system based on nation states. That makes the process more difficult but I do not have any doubts. I believe that some time next year it will be completed and we shall have an improved institutional arrangement at the top of European Union. But to conclude, I would also like to say: we also have to understand that there are limits to what one can achieve with institutional change. Certain policies cannot be put in place if Member States do not agree, irrespective of how strong the institutions are. So, we shall need a lot of work on coordination.
Tian Wei: That is, a lot of work is needed because when it comes to negotiations with the EU, for example, many other countries outside the EU would say, "Well, it’s very hard to get a decision at this moment."
Dr Danilo Türk: Exactly.
Tian Wei: But what can be exactly done because every country, as you said, has its own very different interests?
Dr Danilo Türk: I think that if one looks in trade negotiations one can see what can be done because European Union is a single trading actor and is very effective in trade negotiations. On other issues the question of competences of European Union bodies is more complicated. And even if there are common positions in case of a need of change as a result of negotiations, it’s difficult to obtain that change. So European Union becomes slower in adjusting its positions to the negotiating needs. I believe that this problem will remain. I don’t think that any solution will come overnight but that we shall learn from the experience in the area of trade and apply it elsewhere.
Tian Wei: Very interesting. Because according to the treaty of Lisbon (Lisbon Treaty) you are going to have this quality majority vote by the year 2014. You have the vote and not only reflecting other country but also the number of population inside that country. And also according to this specific treaty would allow specific country to withdraw from the EU. Where is this treaty leading Europe to, do you think?
Dr Danilo Türk: My experience tells me, and that experience comes from the UN, from various other organisations, that the formal rules, the rules, which govern the numerical proportions, are not applied directly in politics. I think that people will realise that it is much better to have consensus than to have majority voting. So I think the new rules, which would allow majority voting in case of need, are likely to have an indirect effect. People will be more attentive and more diligent in working out consensus positions because that other option of majority vote is always there. We have seen this dynamic in WTO, in World Trade Organization, where voting was possible in the past but was not applied very often. Then we have seen this in the Security Council of the United Nations also, where voting is the rule, but very often there are very strong political reasons not to go for a vote but rather to negotiate to a point at which a consensus decision is possible. And I believe that the effect of these new rules in the Lisbon Treaty would be to strengthen the will, the readiness of Member States to negotiate so as to achieve consensus.
Tian Wei: Very interesting. I see you, Mr President, a politician with a lot of sparkles and inspirations. You certainly understand the situation so well for your country. I really want to ask you this question, just a personal question: your predecessor has been quite a dynamic person. He talked about the role of the politicians inside your country and also all over the world. He even criticised politicians though he is a politician himself. But how, what kind of politician do you want to be – for your country and for your people?
Dr Danilo Türk: Useful politician. I would like to be a useful politician. I don’t think that we should have a unified style among politicians. Each person is different. But I think that we can all be helpful if we understand that we are there to serve. And serving requires to listen, serving requires to try to understand the needs of the country, the needs of the people and to accept a certain amount of conflict, because normally you cannot make progress if you don’t allow a certain amount of conflict. So avoiding conflict is not a good policy. Finding a consensus is a good policy. But sometimes before your reach consensus you need to have a degree of conflict. In short, my style would be consensus-oriented with the understanding that that process requires conflictual situations occasionally and that one should not refrain from them. Conflicts are part of life.
Tian Wei: Conflicts and challenges - they are both part of life, right?
Dr Danilo Türk: Exactly. And of course in China you have great proverbs about crisis being an opportunity and …
Tian Wei: Well, everybody is very familiar with that phrase now.
Dr Danilo Türk: Exactly. Now it’s very fashionable, it’s very topical in our time.
Tian Wei: That’s very true. And final question for you, Mr President. We are talking about a difficult world at this moment: with war against terrorism going on still, with the international financial crisis. Many aren’t resolved – the issues climate change and poverty. Where do you think the position of your country is and where do you think or where do you hope your country is heading for in the near future?
Dr Danilo Türk: I think we need to accept the need for change. There is a great need for change in every area that you mentioned. And we have to be prepared for that. This is not easy because people generally don’t like change. If things are not really bad they generally refuse to change. But if one takes terrorism for example: we have been made to believe that terrorism is a main threat to international security and that the means to deal with that threat are involving use of force. That’s why the term "war on terror" has been coined. I don’t think that is accurate. I think one has to look again at what the real problems are and find solutions, which do not involve military means. That’s also change. And I hope that that change will come soon where the change is due. And so one could go from one area to another and see that in many places we need new policies and in some cases also new institutional arrangements. And although none of them will come immediately we have to work for them to come eventually.
Tian Wei: We need to be confident about that. I learnt two words from the conversation with you, Mr President, change and innovation.
Dr Danilo Türk: Correct.
Tian Wei: Thank you so much.
Dr Danilo Türk: My pleasure.
Tian Wei: Danilo Türk, the President of Slovenia. Thank you.
Dr Danilo Türk: Thank you very much for having me.