Mary White (Fianna Fail)

Before commencing my statement I concur with our two Senators from Donegal that there is a major problem in their area and in the Border counties, following the Troubles and the civil strife on the island of the past 30 years. One has to visit the Border counties and Donegal to see the difference in economic development between there and the rest of the island. The advice from the two Senators is on the ball.

I wish to focus on two areas, the development of the mid-west region by the IDA and our new position in the ranking of industrial developed countries and competitiveness. Last week the chairman of IDA Ireland, John Dunne, officially opening its new office in the National Technological Park in Plassey in Limerick said:

The IDA is confident in the growth and development prospects of the mid-west region ... and for the country generally over the next few years ... The national economy is sound and a possible growth rate of 4% or less next year, reflecting an inevitable slowdown in construction, is still exceptional in western European terms.

The mid-west region of Clare, Limerick county and city, and north Tipperary has a strong base of overseas companies. There are 49 IDA client companies in the region employing nearly 11,000 people.

Mr. Dunne continued:

Education, skills, research and innovation [the new portfolio of the Minister of State] must be the defining advantage for any location in the future and particularly encouraging are young students to choose science and technology courses at 3rd level. The Mid-West has a substantial advantage in the quality and excellent reputation of its third level institutions; the University of Limerick, the Tipperary Institute and Limerick Institute of Technology, giving a strong impetus to research and development projects, and industry and academic collaborations ... These academic institutions are the key to holding onto your young people in the Region ... to satisfy the needs of the new breed of knowledge-led and high skilled investors and for building a local innovation culture.

As I said at the two parliamentary party meetings we had to discuss the Shannon Aer Lingus issue, the mid-west region is a perfect example of successful decentralisation but it has very serious problems at present.

Commenting on the Aer Lingus Shannon to Heathrow service John Dunne said:

IDA Ireland believes that a robust and dependable infrastructure is essential if it is to continue to develop the economy, provide higher quality better paid jobs ... Easy access to a hub with global links has been a key factor in securing investments against competition from the UK, Germany, France and other European centres. While Heathrow is clearly not the only such hub, it is perceived as an important link in accessing global customers, and in some cases a central location for corporate meetings.

It is the crossroads of the world. As far as airports are concerned, Heathrow is the number one airport in the world. Mr. Dunne continued: "Given the importance of the issue, it is incumbent on all of the stakeholders ... to work together in a constructive fashion to find a solution which will fully facilitate the future development of the Mid-West and, indeed, of the whole Western seaboard". Those stakeholders are the local authorities, the elected representatives of Clare, Limerick and north Tipperary, FÁS, Shannon Development, Shannon Airport Authority and the academic institutions. If a new airline is not found for that service the Government should demand that Aer Lingus divert those slots currently serving the Heathrow to Dublin and Cork routes which are not at full capacity. There should not be a vacuum on the Shannon to Heathrow route. Flights from Shannon to Heathrow should continue seamlessly when Aer Lingus withdraws on 13 January. To lose four return flights a day from Shannon to Heathrow will be a disaster for the area. Academics and right-wing newspapers have no understanding of the fast moving connections that business people need. Unlike them, business people are not in ivory towers dealing with theory; they must move fast.

It is very hard to get knowledge-intensive industries away from Dublin and the eastern region. We want them to locate in the more regional parts of the country. It is even more difficult to attract those industries which need even better communications.

I return to the new index of competitiveness of the world's top 30 economies. Sadly international trade is not contributing to Ireland's growth as in the past, which has not been mentioned in this debate. At the moment we are ranked 13th of the 30 countries for attracting foreign direct investment. While I accept this is a new index, we have lost our position — in another index we have dropped. India has the top slot in the latest index, followed by Poland, Thailand, Argentina and China. Those countries all maintained substantial cost advantages over Ireland. Within western Europe, Belgium and Switzerland are ahead of us on a competitiveness basis. As Switzerland is not in the EU it does not figure in the EU statistics.

In February Dr. Don Thornhill, launching the report, Ireland's Competitiveness Challenge, identified the main challenges facing the enterprise sector. The composition of economic growth has changed. Ireland's Competitiveness Challenge notes that domestic consumption and construction investment have replaced net exports as the drivers of growth. Supported by high and fast-growing private debt levels, construction now dominates employment and economic growth. There is a problem and there is no point in putting our heads in the sand on the matter.

Dr. Thornhill continued to say: "In a small regional economy like Ireland, economic prosperity ultimately depends on our ability to sell goods and services abroad". If everybody is working in the public sector and the non-productive sector we might as well close down the country. We earn our money through trade. People buy our goods, which is why the multinationals have been successful — they pay us money for the goods we have produced. Dr. Thornhill added: "While we are a still a strong trading nation, our share of world markets has begun to dip as resources have shifted towards domestic consumption and construction". In this regard it is crucial to expedite the national development plan as it will remove infrastructural bottlenecks, enhance the skills of the labour force, and improve the business environment for research and innovation. Concerns have been expressed that the NDP will lead to further price inflation. This can be easily resolved by tighter management of Government projects and allowing more international competitors to enter the market.

I look forward to the Minister of State putting on the record today the money being invested in innovation, which is within his remit. I congratulate Mr. Barry O'Leary on his appointment as the new chief executive of IDA Ireland. He has spent many years in the pharmaceutical sector and he will be outstanding. I thank all the Senators who complimented my husband, Padraic. I was side by side with him for 20 years while he did that job. It was a great honour and privilege to be in that position. My husband has been invited all over the world to advise on how Ireland created the Celtic tiger. We recently returned from Korea where the ex-Prime Minister and top businessmen spent an intensive two days listening to his advice on industrial development.

As a public servant, I was not permitted to become a member of a political party. However, I worked with Albert Reynolds when he was Minister for Industry and Commerce and he was very proactive, gutsy and nerveless and he took risks. Even though Fianna Fáil was in Opposition and my husband was in a delicate position for me to become a member of the party, I joined because I witnessed at first hand how the party could drive the country forward and help to erase the massive unemployment of those years.