Bernard Durkan (Kildare North, Fine Gael)
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Question 373: To ask the Minister for Enterprise, Trade and Employment his plans to improve the competitiveness of the economy; and if he will make a statement on the matter. [31963/05]

Micheál Martin (Cork South Central, Fianna Fail)
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According to the World Economic Forum's Global Competitiveness Report 2005-2006, Ireland has moved up four places from 30th to 26th out of 117 countries. This improvement in Ireland's national competitiveness is further supported by the findings of the National Competitiveness Council's Annual Competitiveness Report 2005. This report highlights several encouraging statistics, which show that we are broadly implementing the right mix of policies. In 2004, the number of people in employment in Ireland grew strongly with almost 1.9 million in employment by the end of the year. Consumer inflation stabilised, Government finances remained healthy and our investment in infrastructure, which stands at 5% of GDP, is approximately twice the EU average. However, the ACR 2005 also highlights two principal areas where Ireland's performance could be improved. The first is our price and cost competitiveness, which has been eroded in recent years. This, combined with a weak dollar exchange rate, means that Ireland is now an expensive production location relative to several of our trading partners.

A key factor in improving cost competitiveness is robust consumer and competition policies. The Government has already put in place the necessary measures to establish a national consumer agency to advocate the consumer's case. It has also implemented a successful reform process of the insurance sector and increased the powers and the resources of the Competition Authority, to aid it in tackling any anti-competitive practices in the economy.

Another area of concern arising from the ACR 2005, involves the significant discrepancies in the productivity performance as between different sectors of the economy. Superior productivity growth has been concentrated in a small number of sectors, with evidence of much weaker productivity growth in sectors of the economy less exposed to international competition such as retail, construction, general services and in some sectors of indigenous manufacturing. The enterprise agencies of my Department have been mandated to adjust their support strategies to the needs of their clients in the modern global economy. For example Enterprise Ireland has launched a €20 million productivity improvement fund, which will assist Irish firms in their drive for higher efficiency and international competitiveness.

The Government is determined to ensure that Ireland's competitiveness and the conditions for businesses operating here are as favourable as possible. In this context it looks forward to receiving the NCC's Competitiveness Challenge Report 2005, which is due to be published later this year.