A talk by his Excellency Hannu Kyröläinen, Ambassador of the Republic of Finland at Austro-American Society on 14 November, 2017

100 Years of Independence: Finland in a Complex World

Excellencies,

Honourable Mr. Huber,

Ladies and Gentlemen,

Let me start by thanking the Austro-American Society for giving me the honor of being invited to give a talk on this distinguished forum. Between Austria and Finland there are many similarities both in the past and in the present, and I hope that my particular Finnish point of view will be of interest to all of you present here tonight.

The title of my remarks “100 years of independence: Finland in a Complex World” may lead you to expect a historical overview. I will spare you of that. If anyhow, somebody in the audience would like to have one, a very condensed and brief overview is offered by the following ingenious quotation in the BBC History Magazine.

QUOTE: “The modern nation of Finland is the heir to many centuries of history; it was a wilderness at the edge of early Europe, a powerful component of the late medieval Swedish empire, and a Grand Duchy of Tsarist Russia – before declaring herself independent 100 years ago.” UNQUOTE

So the BBC leaves the hundred years of independence to be covered more in detail.

It is not my intention to cover the whole history of the independent Finland, either. Rather, I will make some remarks on the position of a small state like Finland in the salient points of history of the last century and on how my country has tried to survive and prosper and how it sees its future. For nations to truly flourish is becoming more demanding with growth of complexity in our common environment. Complexity is a challenge to every state, but I limit myself to a point of view from Finland.

What I mean by “complexity”, needs to be explained a bit. In fact, explaining complexity could take a long while, as experts on systems theory argue wildly what it is and what it is not. I am not going to be absorbed in that debate, but satisfy with a pretty large consensus on certain characteristics of complexity. These characteristics are in my view relevant when applied to physical, economical of political environment.

First characteristic is a system of many actors which interact with each other. Looking at the number of actors in an international system, we have seen a growth in the amount of states. Moreover, new categories of actors have emerged in addition to states. Enterprises, civil society organizations, social media networks, other non-state actors and their consortiums have today much more influence that let us say 50 years ago. As a consequence the possible interactive relationships grow enormously.

Second feature of complexity is the capacity of actors to receive process and send information. The developments in this sphere are quite evident to everybody – we live in a constant stream of information. The challenge is to keep an open-minded but critical viewpoint to all the information available. There often is not just one truth, and truth may also be actively blurred by some.

Third essential feature is the openness of the system we live in. Even those who would prefer to keep things and dealings secret find it growingly difficult to do so.

What is important in conditions of complexity is the ability of the actors to change their behavior on the grounds of feedback. They can adapt to the changes around them.

Very important characteristic of complex systems is that they are more than a sum of their parts. The whole cannot be seen looking at the parts. A good example of this is oxygen and hydrogen. If you study them separately, it is not easy to think of water.

This feature again leads to surprising and unexpected outcomes from the interactions in the system. Sometimes these outcomes are called Black Swans.

The outcomes can lead to non-linear developments: small things can lead to big changes which cannot be restored back to the original state of affairs.

Finally, complex systems operate without a clear center or a leader. They are self-organizing. This is the way in which, for instance, many terrorist groups and networks operate today.

How has complexity with its different characteristics hit home to Finland in the course of its history? If complexity has been and is growing, how should a small nation like Finland react to it? Is the space of free will shrinking with the increasing complexity? I will not try to use recent history of Finland as an empirical backdrop to verify anything about complexity. I just make an effort to indicate certain stages in history where this or that characteristic of complexity is present.

And if you take my point about complexity, then I argue that there are strategies to cope with complexity and that these strategies are particularly important for small states. It is quite obvious that the independence-minded Finns did not give a smallest of thought to complexity in 1917. However, it is quite exciting to look at the history of Finland from that point of view.

More than one hundred years ago the Finnish people, a distinctive group already as part of the Kingdom of Sweden, developed gradually their national, linguistic and cultural self-assertion. This continued and deepened as a Grand Duchy of Russia since 1809, when Finland could develop also her economy as an autonomous unit with a currency of her own.

But this gradual development towards independence, at times rolled back by Russian Tsars, could have been much slower, if there had not been internal developments in Russia which marked an abrupt societal and political discontinuity. When the October Revolution turned the Russian society upside down, the Finns saw their opportunity, seized it and declared Finland independent on 6^th December, one hundred years ago.

The independence started under an unlucky star: next year Finns drifted in to a civil war. A consequent cleavage remained in the society, until it was largely bridged by an outside threat, an outside enemy, the Soviet Union.

Changes in military alliances between states – or today also between non-state actors – are typical situations which lead to non-linearity. Pre-war history in Europe is a good example.

The unprovoked attack of the Soviet Union on Finland in late November 1939 starting the Winter War was preceded by a real Black Swan for many European states, in particular for small states. I mean, of course, the rapprochement between the Soviet Union and Hitler’s Germany. An essential part of it was the Molotov – Ribbentrop Pact with which the two totalitarian giants divided part of Europe into spheres of influence.

Less unexpected was the brief duration of the understanding between Hitler and Stalin. When Hitler launched the Operation Barbarossa against Soviet Union in 1941, Stalin’s response included aerial bombings of Helsinki and other Finnish cities, and Finland was at war again. In her efforts to regain what was lost in the peace treaty ending the Winter War, Finland was assisted materially by Germany. However, Finland did not share the ultimate strategic goals of Hitler, and, among other things, Marshall Mannerheim did not yield to Germany’s request to strangle and destroy the city of Leningrad.

For Finland, the World War II finally ended with a separate military campaign, dictated by Soviet Union, to expel the remaining German troops from Finnish Lapland in late April 1945. Before that – over the summer 1944 – the obstinate defense of the worn-out Finnish Army in the Karelian Isthmus had led Stalin to abandon his plan to occupy Finland, and to order his divisions to join the race to Berlin, instead.

An interesting historical fact is that London, Helsinki and Moscow were the only three capitals among the warring European nations that were not occupied in the course of the World War II.

From a security policy point of view Finland’s environment was plagued by discontinuities and changes in the alliances of states, a trend that would not immediately go away with the end of the WW II.

Finland tried to react to these changes in different times by adopting policies which sought to rely on Nordic cooperation, assistance by major European states or cooperation with Germany.

The military defeat to the Soviet Union induced the Finnish foreign-policy leadership to make a harshly realistic re-evaluation where the neighborhood of the Soviet Union was accepted as a permanent fact and basis for future foreign and security policy. On the policy level this led to a conclusion that Finland as a country, which would defend her own values, integrity and territory in any case, would not let her territory to be used as a base for aggression against Soviet Union.

You could say that Finland’s foreign policy leadership saw it necessary to change foreign policy orientation to secure democracy and basic values at home. To carry this out was quite a complicated balancing act during the post-war years, when the war-time alliance against Nazi-Germany soured into Cold War, thus resulting in bigger and smaller states to take sides, and when the Communists tried to seize power in countries like Finland, Czechoslovakia or Greece through parliamentary and extra-parliamentary means. In Finland they failed on both fronts.

In this constellation Finnish Governments used multilateral institutions both to defend democratic values and to position Finland internationally. A membership in the Nordic Council sent a clear signal of Finland’s closest value community. Cooperation of the five Nordic countries, by the way, is a prime example of a system which is much more than a sum of its parts. Nordic countries and “a Nordic Model” have been and continue to be a model for many around the globe. The Nordic countries formed a passport union long before the Schengen and granted a free movement of labor inside their borders before the European Union.

Finland’s membership in the United Nations, on the other hand, offered Finland a useful political framework not only to commit herself to the values and goals of the UN Charter but also to foster her political neutrality and status outside the two military alliances, the Warsaw Treaty Organization and NATO. An important tool in this contextual policy was Finland’s contribution to the peacekeeping operations of the United Nations. The countries contributing to the PKOs were chosen mostly from countries outside military alliances of the Cold War, thus the imprint on Finland was seen to consolidate her neutrality.

Finland did not exercise policy of neutrality in the value sphere or in the economic sphere. Soviet Union jealously watching, Finland developed her economic integration with the West – with a low profile but with determination. Finland joined the Bretton Woods Institutions, arranged her relations with European Free-Trade Area (EFTA) through a FIN-EFTA agreement and joined the OECD. This Western orientation was fully realized in 1995 when Finland joined the European Union together with Austria and Sweden. After the EU accession the Finnish Government ceased to call the country neutral, and the current qualification is “a country not belonging to any military alliance”.

If the foreign policy of Finland has been adapting to changes and complexities of our environment, adaptation has been on-going also in the national economy and social development. The post-war agrarian society which – and this is illustrative – still in early 50’s received assistance from the UNICEF, has transformed itself to a large extent post-industrial society resting on innovations rather than on manual work. And yes, today Finland is among the top donors per capita to the UNICEF. Economic integration within the EU, including joining the Euro area in 2002, has played a remarkable role in Finland’s development.

A prime example of non-linear international development is, of course, the collapse of the Soviet Union and Communist system in Europe. The magnitude of this incident led even to a conclusion of the end of history. That conclusion turned out to be over the top, and the recent development of Russian domestic and foreign policy seem to restore part of the continuity. Nevertheless, non-linearity was there, and the rest of the world, especially Europe, had to cope with that.

The previous bi-polar global system turned into a unipolar one, led by the United States. Today, Russia is trying to regain its status in the global strategic setting where China, too, is increasing its influence, and the debate continues on the possible withdrawal of the United States from its leading role. This certainly has led to growing complexity in the world, where also non-state actors are claiming a bigger role.

The frontline technologies both in communication and production are more easily and widely available to almost anyone with money. This produces many challenges for traditional players in international relations – the states and their rules-based international institutions and regimes. Handling the challenges becomes more difficult when at the same time the global values to which states commit themselves having signed the UN Charter are, unfortunately, being eroded by many.

Let us take a closer look at what we are facing in some sectors.

Media is changing. We have just learned to speak about the social media, when suddenly for many in the younger generation media is only social media, and the old media, printed or electronic, is being sidelined. This change covers things from communication, customer behavior to recruiting terrorist fighters. The diminishing role of the printed media, by the way, is reducing the demand of printing paper, one traditional export item of Finland, encouraging our forest industry into bolder innovations.

The Internet of Things, 4^th industrial revolution and 3D-printing as examples within digitalization are already with us, changing both ways of production, business models as the nature of work. Many jobs will disappear, new ones will emerge. Examples of the consequences are daily and abundant. In Finland, two biggest financial groups announced some weeks ago that in each of them several thousand employees will be redundant during coming years due to digitalization.

Maybe the most significant domain of complexity is ecology. It is obvious that some forms of environmental degradation have already now lead to non-linear changes, at least in time scale of humanity. And some others may have taken place without us yet observing them fully. The climate change is very much in focus – not least because there is a UN Climate Change Conference underway in Bonn right now. But as big impact as climate change may be caused by the acidification of the oceans.

We in the EU are occupied with irregular migration and its many effects on us. There is a consensus on the need to influence the root causes of migration. Environmental degradation is perhaps not the main cause, but in many cases drought, floods or storms can be the last straw which makes people leave their dwellings and move, first to cities and therefrom abroad, despite risks.

I could continue the list, but I hope these examples make it clear that complexity and its various manifestations are growing around us.

Earlier I spoke about how complexity has changed Finland’s foreign policy environment and how Finland has responded to them. When complexity grows in every sector, and new threats and new instability are born, responding to them successfully is more demanding. But change also brings new opportunities. Grabbing them quickly opens profitable perspectives in the present winner-takes-it-all Platform Economy.

The Government of Finland recognized the fundamental and far-reaching changes in its operating environment when it published its recent report on Finnish Foreign and Security Policy. The report considered it necessary to keep a constant eye on the external environment and maintain a readiness to adjust not activities but also policy priorities in order to respond to changes. In the Government’s view the most important external variables in Finland’s foreign and security policy environment are global trends, political and security development in areas important to Finland, actors in foreign and security policy as well as international rules.

As I have already touched upon some aspects of global trends, actors of international relations and the rules-based system, let me say a few words about my Government’s assessment regarding security developments in areas close to Finland.

Changes in the international security environment, the return of Russia to thinking in terms of power politics, its internal development, the growth of its military potential and increasing military activity challenge the very foundations of the European security regime and thereby create instability in Finland’s operating environment.

The Finnish Government assessed that the security of Europe and the Baltic Sea region has deteriorated. The illegal annexation by Russia of Crimea and the conflict created by it in Eastern Ukraine has led to increased tension and military activity in the Baltic Sea region. A more tense security situation in our vicinity will directly impact Finland.

Are there characteristics of complexity in this tense situation? In my mind, there are, at least one typical feature, to which many observers have referred to. The increased military activity, including near misses in the air and air space violations, has increased the likelihood of military or civil-military incidents. They could escalate into something more serious, unintended outcomes.

What is Finland’s general approach to the challenges of complexity when we are about to start the second centenary of our independent state?

The Finnish Government Report stresses the importance of strong domestic value base and well-functioning institutions for running successful foreign and security policy. Similarly important for Finland’s over-all competitiveness are high expertise, sustainable development and open-minded innovations based on experimentation and digitalization. Thus, the responsibility for success in security and welfare rests on the shoulders of the whole society which must be both bold and agile in developing new and resilient ways if hit by a crisis. The role of education, starting from the early years and ranging to life-long learning, has a crucial role. Maintaining high degree of equality, both between men and women and in terms of income, is a Finnish asset, too.

Nobody is immune to global transformation. Small nations like Finland can influence global trends by intensifying cooperation with other actors. By anticipating the winds of change and by efficiently and flexibly tapping into its own strengths Finland can strengthen its international status and prosper.

If a state wants to prosper in a complex environment, isolation from international interaction is not an option. The Finnish people, with an exception of some small nationalistic-minded groups, believe that active participation in international cooperation best advances Finland’s interests and is a part of Finland’s global burden-sharing.

Strengthening of multilateral rules-based international order is necessary for a small nation in a complex world. A world based on cooperation, respect for international law and the UN Charter is important to Finland’s goals.

Being a country that relies on foreign trade Finland finds it important to strengthen the multilateral trade regime. Finland is strongly supporting new EU Trade and Investment partnerships. We want to improve the capacity of international organizations to tackle even new global challenges, such as cyber issues. Finland also underscores the importance of arms control.

In the security domain, too, Finland is in favor of return by all to Europe-wide cooperation, based on the principles of the Helsinki Accords and the Paris Charter. The European Union is Finland’s value community. Finland aims at bolstering the EU as a security community that cultivates cooperation among its Member States.  Finland advances the EU’s capability to transform itself and meet both internal and external challenges.

Finland is strongly in favor of developing defense cooperation within the EU. In line with this goal, Finland together with 22 other EU Member States, announced yesterday that they will join PESCO, permanent structured cooperation which aims to jointly developing defense capabilities and making them available for EU military operations.  Finland sees it timely to also develop capabilities to recognize hybrid influencing and to react to it.

To prevent armed attacks, Finland maintains a national defense capacity tailored to its security environment and continues defense cooperation with others. Bilateral and multilateral defense cooperation is an important part of maintaining, developing and using Finland’s defense capacity and deterrence. The capability to receive military assistance is an important part of defense development.

In Finland’s bilateral cooperation Sweden enjoys a special status. We have a long historical bond, shared values, diverse contemporary ties and widely integrated economies. Finland and Sweden evaluate their respective security environments mostly from similar points of departure, which is a good basis for deepening foreign and security policy and defense cooperation. Defense cooperation with Sweden aims at strengthening the security of the Baltic Sea region as well as the defense capabilities of the two countries.

The commitment of the United States to NATO and its military presence in Europe continue to be essential to Finland’s security. Finland will intensify its security policy and defense cooperation with the United States.

Russia is Finland’s neighbor, and its democratic development and stability are important. We share 1 340 kilometers of land border with Russia. The EU’s common positions on Russia form the basis for Finland’s action. Finland aims to maintain stable and well-functioning relations with Russia.

In Finland’s cooperative network NATO has a significant place. NATO is the key actor in advancing transatlantic and European security and stability. Finland’s partnership with NATO is wide-ranging and enhanced. NATO’s enhanced Opportunity Programme (EOP) is a useful instrument for us in maintaining and developing our NATO partnership. The development of military cooperation with NATO is one of the key elements through which Finland maintains and develops its national defense and the capabilities for defending its territory.

Naturally, the partnership cooperation does not include any Article 5 –based security guarantees. While carefully monitoring the developments in its security environment, Finland maintains the option to seek NATO membership.

I believe that for a small country it is both necessary and possible to prepare for the complexity around it. Surely, there cannot be any guarantee of success in conditions of complexity, however well one prepares for it.

But to improve one’s chances, there are some things even governments and countries can do. The Government of Finland does not have a “complexity strategy”, but it looks to me that it has come to some conclusions which improve the chances to surf of the wave of change instead of being submerged by it.

First, one has to recognize the complex nature of one’s environment. Secondly, one has to watch it constantly, to analyze it and anticipate its development. Third, one has to have one’s own house in order and remain at the edge of innovations and its habitants unified in their support. Fourth, one has to be agile. Fifth, develop cooperative networks. Sixth, enhance and develop cooperative action based on commonly accepted rules.

And remember what is usually said in the emission brochures: “Past performance is not a guarantee of future results”.