Mr. Angel Gurría:

She is a frequent visitor and has worked a lot with us. Financial sector vulnerabilities also need to be further addressed. While non-performing loans on bank balance sheets have declined by approximately 60% since their peak, the stock remains high. It is still in the double digits and it should be addressed.

The OECD Economic Survey has a special chapter on productivity.

It paints a contrasting picture, showing that foreign-owned companies outperform local businesses by a wide margin and that this margin is getting wider. The labour productivity index of locally-owned firms has remained practically flat over the past ten years, while for foreign-owned firms with a baseline of 100 in 2006, it has risen to almost 400 in manufacturing and, almost eight times, to 800 in services, such that in ten to 12 years it has multiplied. Regional disparities are large too. Data from the Central Statistics Office show that the gap in disposable income per capitabetween the Border, midlands and western region and the rest of the State has not been reduced since the early 2000s and is still approximately 10%.

The resilience of the Irish economy and the fight to make growth inclusive hinge on boosting the productivity of local businesses and equipping workers with the skills to improve their outcomes. Only approximately 6% of the population aged 25 to 64 participated in education and training in 2015 compared with over 15% in Britain and almost 30% in Sweden. Irish-owned companies in most sectors have reduced employee training since 2000, when they should have been doing the opposite. The Government could allocate a greater share of funding under the national training fund for training for those already in employment. Online education could help but some workers and jobseekers may be caught in a vicious circle because, according to the survey, only 48% of Irish individuals had basic or above basic digital skills in 2017, which is 9% below the EU average. Therefore, if attempts to upskill are online based only, at least half of them would not be in a position to access it simply because they do not have the basic skills to do so.

Obstacles to entrepreneurship which could be addressed include high regulatory barriers that make it hard for innovative new firms to gain a foothold and reinforce the position of incumbents. There are costly regulations relating to commercial property and legal services. The cost of business failure is too high. Modern entrepreneurship means being able to learn from experimentation and this sometimes means being allowed to fail and learn from mistakes and to get back up again. The firms have to make an effort too to improve their management skills and invest more in research and development but, again, Government can help by creating an enabling environment. It can also help citizens through reforms focused on housing, health and getting back into employment.

Ten years ago, when I was last in Ireland, ghost estates and unsellable property were making the headlines. Today, housing affordability is the issue for many people. I note that one of the national policy objectives of the Project Ireland 2040 is to prioritise the provision of new homes at sustainable locations and at an appropriate scale relative to location. While the latter is the preferable problem to have, it is still a problem and it needs to be addressed. The Government has implemented several policy measures to improve affordability but any long-term solution must focus on increased housing supply. Abolition of unnecessary housing regulations that raise costs and reduce the potential for greater density is a priority. So too is pushing the market to put well located but underutilised swathes of land to good use. To achieve this, the introduction of a broad based land tax would be a useful weapon.

The health system is another area of concern. There are worrying trends in terms of cost, patient satisfaction and waiting times. There is a graph in the study on waiting times, which shows that waiting times here are a multiple of those in New Zealand, Spain, Germany, France and other countries. In Ireland, waiting times for some treatments range from two to three weeks to six months. While there is scope for further improvements in health spending efficiency, a path to providing universal coverage should be laid out, keeping in mind the likely impacts of population ageing. There is a video game in which a little face known as the Pac-Man eats everything. Ageing does this with budgets. Ireland has a demographic window of opportunity in that its population is still younger than the populations of most of its peers in Europe. It must use this time to prepare for a time when ageing will catch up with Irish society and it will experience vast increases in health expenses.

Apart from housing and health, employment is a concern. This might sound surprising given that unemployment rates have been falling, but some groups, such as young, low educated individuals and women, must be encouraged to further participate in the labour market. They are under-represented. One way to do this is to change those aspects of the social welfare system that make people worse off when they take up a job.

Ladies and gentleman, the financial crisis is now behind Ireland, due in no small part to its dedication to promote better policies for better lives. The OECD looks forward to working with Ireland and for it in fulfilling this mission and in showing how, in the words of William Petty, "a small Country and few People, by its Situation, Trade, and Policy, may be equivalent in Wealth and Strength, to a far greater People and Territory."