Persson backs globalization

(AFP) - Swedish Prime Minister Göran Persson on Wednesday hailed globalization and free trade as beneficial for all but insisted that national policies were needed to ensure social safeguards.

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Being able to combine free trade with a competitive industry and at the same time maintaining and developing a secure safety net and a good education system, that is I think a challenge," Persson said.

"If we manage to do so, then I think there are opportunities for everyone in globalization," he told reporters in Stockholm after a meeting with the OECD's Canadian Secretary-General Donald Johnston.

The two men discussed the program for the annual OECD ministerial meeting in Paris next week, to be led by Persson under the heading "Enabling Globalization".

Persson's attempt to put a more humane face on globalization - the trend toward market-driven free trade - after years of massive demonstrations around the world to protest of what many see as its ruthless nature.

The topic has been especially hot in Europe since the EU expansion last year, which sparked fears in many old member states of an influx of cheaper labour from the new, mainly Eastern European members.

As an indication of the mounting tension over the issue, a Latvian construction company accused of wage-dumping in Sweden was for instance forced into bankruptcy earlier this month after unions blocked its employees from working in the Scandinavian country for more than three months.

In Sweden "we've had structural changes that have been painful for individuals. In the broader pictures it has been advantageous for the economy, but there are always individuals who risk to be left behind," Persson explained.

"The domestic politics must always be designed to secure (the citizens') situation, give them a new start, give them a new chance, give them a new education. Otherwise globalization and free-trade will end up as regarded as something as a threat to ordinary people," he added.

Persson insisted that there were "many more opportunities" than threats in globalization but added that "we must not be naive."

"There is a risk that there might be a growing resistance, not least in economies that have very low economic growth."

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