The Taoiseach Brian Cowen TD last week opened the Economist Conference’s First Business Roundtable with the Government of Ireland on the topics of “real strengths and new challenges”.
The conference, held in Dublin’s Conrad Hotel, was chaired by Dan O’Brien, senior editor of Economist Intelligence Unit, and attended by senior representatives from the legal, accountancy, financial, multinational and third-level education sectors. The roundtable discussions aim to produce ideas and clarity on how Ireland’s economy can accelerate and continue to grow well.
In his address, the Taoiseach outlined that navigating through the severe financial situation requires a firm, decisive approach from Government. "We are under no illusion as to the magnitude to the task, and our job is to communicate to the public precisely the gravity of the situation. The decisions we are making now will determine whether we throw away the economic progress we have achieved or whether we give ourselves and our children a prosperous future. That is how stark this situation is and that is why we have been taking the difficult decisions that we have."
He outlined four priorities for his government: managing the adjustment process that was begun with Budget 2009; developing a credible economic recovery strategy; modernising the public service; and dealing with the continuing banking and financial crisis.
The Taoiseach stated that economic recovery will depend on increased exports and that the Government will re-focus efforts on identifying and exploiting areas which generate export-led growth. "It’s important to show that Ireland is open for business. The recent trade mission to China is an indication that the global reach of Irish exports has greatly broadened."
He said the much-reported doom and gloom is not justified when taking a comparative view and called for a more reasoned outlook. "Ireland has been a prime example of where an agile, small economy that focuses on the right strategies can experience full employment. That’s going to change in the next year or two, but we mustn’t lose our courage or capacity to overcome these problems. Even if there is some reversal in this progress in the coming years, we are still in far better position than we were five or ten years ago."
Mr Cowen advocated the revisiting of budgetary disciplines, if Ireland is to find a sustainable way forward. He disagreed with the idea of avoiding cutbacks by borrowing or taxing. "Even with the adjustments that are beginning to be implemented, 10pc of total current spend has been borrowed this year – 10pc of the cost of every teacher, nurse and doctor is paid for from borrowing. That €4.7bn represents 10pc of total spend. Any extra people taken on beyond that will have to be paid for by 100pc borrowing. We have to work within our means, control our deficits and bring them back within the parameters of the EU stability and growth pact."
The Taoiseach stated that the extraordinary success of the policy of attracting foreign direct investment must now be matched by the stimulation of business start-ups and the creating of thriving indigenous enterprise. A particular priority is development which captures the full economic benefit of the knowledge and innovation created with the support of public investment in education and R&D.
He estimated that Ireland will have a 70pc service-led economy by 2025. "Services currently comprises 20pc of total world trade, and represents an area for growth where we have some advantages and ability to perform and where we can concentrate in the future."
In terms of dealing with the public sector, he drew inspiration from the success of the science and technology sector. "What we’re seeing in private industry needs to be replicated in terms of public sector ethos – and that is, we must innovate. We must agree that there are new public service delivery mechanisms that have to be put in place, and we have to accept that we have to get more for less."
The Taoiseach stressed that Ireland has a strong economic future beyond the present difficulties. "This country has an awful lot to sell. We have to recognise the new situation and face into it, by leading and working together, and ensure we get across the message of what is required in the long-term interests of the country. A significant part of the successful development of this Ireland’s economy has been the agility and pragmatism of government and business in taking decisive action. This keeps us ahead of the competition and demonstrates to the international business world that we are a place to come and do business."
The Taoiseach stated that Ireland is ranked highly as a place to do business but stressed the Government’s commitment to improving on this. He said "It is essential that we maintain an attractive environment for overseas investment, especially in the more innovative and higher value-added sectors of the global economy. The 12.5pc rate of corporation tax will not be increased."
In response to a concern raised by Paul Carroll, managing partner at A&L Goodbody, about the possibility of stricter regulation "weeding out the necessary DNA in our entrepreneurial spirit", the Taoiseach reinforced the Government’s commitment to restoring public confidence through clear and transparent principles of accountability, which can be achieved without becoming a negative burden on enterprise development. "The introduction of a regulatory system has been the right thing to do and facilitates competition," he said.
When asked what the Government could do to stem the fall-off in consumer spending, Mr Cowen’s answer was to firmly restore confidence: "The Government will do all it can in policy terms to assist business. One of the things in trying to restore confidence is to get across the full picture to people. The fact is that times are tougher, so we need to compete harder and be more productive. If we go about it in this way, confidence will return because people will see that there are no shortcuts to success. We are in a better position than most countries to get through this. The main issues are the public’s consciousness of what’s going on and what each of us can do to get us back on track."
By Linda Gillett
Pictured at the First Business Roundtable discussion are (from left) Paul Carroll, managing partner at A&L Goodbody, Taoiseach Brian Cowen TD and Dan O’Brien, senior editor/economist at Economist Intelligence Unit
This article appears courtesy of businessandleadership.com
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