Vol. 409 No. 1
14 Mr. Deasy asked the Minister for Industry and Commerce if he will outline the particular areas in which he anticipates our trade with liberated eastern European countries will expand in the next few years; and if he will make a statement on the matter.
The new east European markets have yet to develop as serious priorities for the majority of Irish exporters. Niche opportunities exist and are on the increase.
The best short term prospects are to be found in the sectors in receipt of support from international organisations such as the European Community's PHARE Programme and the targeted funding of the International Monetary Fund. These opportunities are primarily, though not exclusively, in the services sector and it is in the provision of consultancy services that Irish companies have been most active and successful.
To date Irish companies have obtained contracts to the value of some £10 million. CTT believe that with adequate development and a targeted marketing approach on the part of Irish exporters contracts to the value of £35 million to £50 million per year can be obtained in each of the next three years.
Sectors with immediate opportunities include telecommunications, for which significant external financial assistance is available, and the food industry which is in need of substantial modernisation. The potential in these areas is much greater if equipment sales can be linked with or follow from the supply of consultancy services. I am convinced that with the correct marketing structures and strategy we will be well positioned to service these developing markets.
We were quick to identify the potential of these emerging markets and CTT opened new offices in Czechoslovakia, Hungary and Poland in November 1990. Several group and trade missions have already taken place. The Taoiseach, accompanied by a business grouping visited Czechoslovakia in April. I led trade missions to Hungary and Poland earlier this month. Further group visits are planned for later this year.
In visiting the markets I was particularly struck by the similarities in the difficulties facing eastern Europe in seeking to re-orientate and restructure their economies and those which we here in Ireland tackled and overcame in the early years of our economic development. It is for this reason that consultancy services available from Ireland are all the more relevant, based as they are on practical experience.
Overall these markets present long term opportunities but it is important to be in at the beginning and I believe that the range of services available from Ireland is ideally suited to their needs and is being well presented.
Does the Minister agree that one of the problems about selling into eastern Europe at the moment is their inability to pay in hard currency? Is there any strategy or plan the Government can devise whereby they could give extended credit on behalf of exporters and take up the charge for that credit which might assist us in building up a reputation in any one of the countries from which we may benefit in the future?
Given the state of the public finances here with the public debt of more than 100 per cent of GNP, I do not think we are in a position to finance the purchases of other countries in that way. We are conscious of what their difficulties are, of the fact that they have been exacerbated by the sudden change on 1 January this year in their trading practices with the Soviet Union, of their consequent dependence on the European Community, and we are doing everything we can to further trade within the limitations mentioned by the Deputy. However, as I pointed out in my reply, there are not insignificant sources of external funding and many of our firms are able to avail of those at present in the short term.
It is the cost of that credit which is the problem.
As economies develop in the central and eastern European countries, I have no doubt that they will be able to generate worthwhile trade for us and for others in the years to come.
Is the Minister satisfied that he has adequate funding available, and in particular to CTT, for the financing of their offices in Czechoslovakia, Hungary and Poland? Perhaps the Minister could outline to us the budgets available to those offices to enable them to impact on behalf of Irish exporters and on behalf of the trade groups? The Minister might outline to us what funding is available to those three offices and what personnel are available.
I do not know the amount for the specific offices. I would need notice of that because I do not have that information. The Deputy will be aware that under this year's Estimates there is a significant increase, happily, in the funds available for the marketing budget of CTT, mainly related to Structural Funds which we will be able to draw down this year and next year. I visited two of the three offices. They are manned by one Irishman and one local staff member and I would like to take the opportunity to say that we are getting extremely good value because the people manning the offices are very active, enthusiastic and successful and are of great help to the Irish companies on whose behalf they are working. They are, in every way, a credit to this country.
Subsidised credit would be a great help.
Has it yet been possible to establish the extent to which these new establishments have been successful vis-à-vis the other EC countries who will also have established trade missions and the usual contacts such as the Minister has outlined? How would we compare with them at present?
Given our size, proportionately we do better than most of the others for, among others, the reasons I gave in my reply on the way the people in those countries are able to identify with our political and economic history and our anxiety to achieve economic independence from a large and dominant neighbour, which is precisely the situation in which they find themselves. For that reason I think proportionately perhaps we do rather better than most of the larger EC countries.
