Billy Kelleher (Cork North Central, Fianna Fail)

This is a follow on from the smart economy document that was published in December. Since then many actions have been taken but the report of this group will form part of the Government's recovery and growth strategy.

We are pursuing major investment programmes in our energy infrastructure, renewable power, and energy efficiency. We are introducing incentives in a range of areas including for energy efficient investment by business. We are targeting opportunities in areas like ocean and wind power, and electric vehicles, where Ireland can establish a competitive advantage.

Despite the slump in global demand, our export performance has held up remarkably well, particularly in certain major sectors such as chemicals, pharma and the life science sectors. Medical and pharmaceutical exports grew by 22% in the first half of 2009, while exports to the key export market of the United States grew by 18% over the same period, in spite of the unfavourable currency climate. Overall, Ireland has seen modest export growth for the first six months of 2009, growth that contrasts with the double-digit export declines of some of our major trading partners.

The International Monetary Fund envisages a significant return to global growth in 2010 of over 3%, which will greatly enhance Ireland's ability to benefit from an export-led recovery. Indeed, the recent return to growth in export orders in both the manufacturing and services purchasing managers index lends credence to the prospects of an export-led recovery in Ireland. Due to the especially open nature of the Irish economy, we aim to benefit substantially from a global economic recovery.

Restoring cost competitiveness in Ireland is made more difficult by the inability to effectively devalue our currency, and the current weaknesses in the dollar and sterling, the currencies of two of our more important trading partners. However, in spite of these difficulties, we have made good progress in controlling costs and we are restoring competitiveness. The ESRI recently predicted that, with our current control of costs, productivity should grow by over 3% in 2010. Combined with projected wage decreases of 2.5%, this entails a significant improvement in the competitiveness of the Irish economy. The process of restoring competitiveness is set to continue into 2010. Indeed, the speed and extent of our economic recovery depends on how quickly our competitiveness can be restored.

I spent last week in China promoting Irish enterprise and driving partnerships with Chinese businesses. Both the vastness of the challenges and the uniqueness of the opportunities of the global economy are all too evident in China. It is a key market for us and one that will help drive our export growth. I saw quite clearly that there are challenges out there but, equally, there are opportunities. We are making progress in the marketing of Ireland as a place to invest and purchase. I am confident that with the measures I have outlined and the measures that will be included in the budget, which will be difficult for the people and cause pain and upset, we will cope with the challenge to make the country competitive so that our exports can be sold competitively and we can retain and create jobs at home.

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