asked the Minister for Finance the total amount of foreign borrowing by the State and by State companies for the year ended 31st March in 1973 and in 1974 and for the current financial year to date.
72.
Ceisteanna—Questions. Oral Answers. - Foreign Borrowing.
71.
asked the Minister for Finance the percentage of capital inflow represented by foreign borrowing by the State and by State companies for the year ended 31st March in 1973 and in 1974 and for the current financial year to date.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 71 and 72 together.
Foreign borrowing by the Government and by State-sponsored bodies, which has been guaranteed by the Government—in the years requested was as follows:
|
State-Government sponsored bodies |
||
|
(£ million) |
(£ million) |
|
|
Year ended 31st March, 1973 |
23 |
41 |
|
Year ended 31st March, 1974 |
47 |
46 |
|
From 1st April, 1974, to date |
138 |
29 |
Net Government and Government guaranteed foreign borrowing amounted to approximately 44.7 per cent of capital inflows in 1972-73 and 89 per cent in 1973-74. Figures for the current year are not yet available.
Apart from the disclosure of the enormous jump in Government foreign borrowing this year as compared even with last year, am I right in thinking that the Minister is saying that last year the percentage of Government borrowing or Government guaranteed borrowing abroad was 89.34? That was the percentage of capital inflow represented by Government borrowing or Government guaranteed borrowing?
89 per cent.
Almost 90 per cent? Is that right?
That is right.
Would the Minister agree that in these circumstances where 90 per cent of the capital inflow consists of foreign borrowing by him or guaranteed by him, it is somewhat misleading to talk, as he has been talking, in glowing terms about the capital inflow when only 10 per cent of the capital inflow is anything in the nature of investment by people other than the Government borrowings?
One of the rudimentary practices of borrowing is not to lend to people unless one has confidence in their capacity to repay and unless one has confidence in their way of life. The fact that Ireland has received such massive foreign loans is an indication of confidence by the lenders in the Irish economy. It would be very wrong for the Deputy to proceed on a line which is contrary to the advice being offered by every responsible economist and financier in the world and that is that a developing country like Ireland should follow a course of borrowing abroad particularly at a time when, as now, it is the only way in which we can avoid a damaging blow to our economy because of the oil deficits. Every international organisation concerned in this field, from the IMF to the World Bank and the European Economic Community, has advised that countries in our position should borrow abroad. This is a policy which, I am glad to say, we are able to successfully pursue.
I should like to point out to the Minister that I have not been talking on this issue of the advisability or otherwise of foreign borrowing and I suggest to the Minister that he should not put words into my mouth. I should like to point out to the Minister that recently he has been speaking in glowing terms of the increased capital inflow. I suggest to him that, since it now emerges that 90 per cent of that capital inflow is borrowing by him, or made or guaranteed by him, he should cease to speak in those terms of capital inflows.
No. The private sector foreign borrowing is also on the increase. Foreign investment in the private sector in Ireland is also on the increase.
It is about 10 per cent now whereas it was less than 50 per cent in 1973.
The percentages do not matter but what does matter is that we have this massive demonstration of the international community in the viability and potential of the Irish economy.
(Dublin Central): I should like the Minister to give a breakdown of the £138 million. What countries did that come from?
That is a separate question.
I have not those details available.
(Dublin Central): What would be the cost of servicing that?
I have not that figure available.
Will the Minister give us the figure?
I shall endeavour to do so.
Questions Nos. 73 to 76, inclusive, postponed.