I am grateful for the opportunity to speak on the National Economic and Social Development Office Bill 2002, which gives a statutory basis to its three constituent bodies, the National Economic and Social Council, the National Economic and Social Forum and the National Centre for Partnership and Performance.
This Bill was initiated two weeks ago and during the wide-ranging debate on the evolution of the economy, I was reminded that prior to my entry to Dáil Éireann, I spent 20 years in the same line of work. It is a privilege that I was able to be self-employed from the early 1980s until last year.
The economy of this State over that 20 years, which is not a long time in real terms, has changed radically. At times, when one listens to the comments made in the House, one would think nothing in the State is working satisfactorily and that the situation is dismal. I am the first to admit that there are problems but we have seen considerable progress over the past two decades.
In the early 1980s there was high unemployment, inflation, bank interest rates and large-scale emigration. To this day the effects of that era are still palpable – many of my best friends from college and university emigrated. It was known as the "brain drain", we educated people here and they left. It was a sad reflection on the State at the time.
I have lived in Clondalkin all my life and I have seen the area grow, develop and change considerably. I have been involved in community activities there for many years and could see that there were parts of Clondalkin which experienced very high unemployment in the 1980s. It still exists but the rates experienced then are not the case now. We must, however, look at the effect of unemployment, not just on the individual but on the whole community. It devastated part of my constituency for a decade. People lived with no hope and the only prospect was to get out. That was a sad reflection on the country then. People had no dignity, self-worth or self-belief.
My involvement in education brought that home to me. I have been involved in the boards of management of a number of schools for some years and often we would examine absenteeism in detail. When we took the time to discuss the situation with teachers and families, we saw that many of the young people going through the educational process had no interest, enthusiasm or motivation. They came from a background where there was no prospect of employment. They could not remember their fathers ever working and their older brothers and sisters could not find work or emigrated. Motivating young people in such a system was difficult. We were fighting a losing battle. Many of those who went through the system and did well for themselves emigrated. That was the situation in the State in the early 1980s.
Today things have changed. Not everything is right, I recognise many of the problems we face and although there are still parts of my constituency experiencing social and economic disadvantage, if we look back, we can see the significant improvements that have been made since then. I meet people who suffer as a result of disadvantage on a regular basis but on a macro level the situation has improved significantly.
Participation rates in primary, secondary and third level education have greatly improved. We have broken the cycle of extremely high unemployment in areas where we thought we would never break it. There are many initiatives for children which are vital because we must get children at a young age into education. That cannot be emphasised enough because the future economic prosperity depends on it. If people living in disadvantaged areas cannot understand the necessity of education or cannot be afforded that opportunity they will always be at a disadvantage economically.
We have broken out of that cycle to an extent, although perhaps not enough. Travelling through parts of my constituency that would be classed as disadvantaged, the improvements of the past two decades are obvious. There is an emphasis on the involvement of pre-school children, there are after-school education and homework clubs and a wide range of other activities. While the area has one of the lowest take-up rates for third level education, it is far higher now than it has ever been in the past. It is not high enough but it is heading in the right direction.
More people are working in my area than ever before. They all have good jobs but more people are working. The difference work makes both to the individual and to the community he or she represents and in which he or she lives is unbelievable. All one has to do is walk down the street and one sees a different way of life. These people no longer appear grey, dull and fed up, they have a purpose and they aspire to better jobs. Many who have young children can see that their children should aspire to better jobs. Employment has given people a dignity, a self-belief and a self-esteem that many from my constituency have never had. The period from the early 1980s to date has probably seen the greatest growth in prosperity.
Those who emigrate nowadays do so by choice. Most school leavers decide to go to Australia, America or elsewhere. In the past it was known as the brain drain and it occurred because there was very little opportunity. Individuals and communities have found a dignity of which they had been robbed for so long because of unemployment. This dramatic change did not happen overnight or by chance. Much as Fianna Fáil and various Ministers would like to claim, it did not happen solely under Fianna Fáil, but over an extended period. Numerous Ministers from both sides of the House were involved in the transformation. A key element of the transformation was not merely what the Government of the day did – certainly it had a major role to contribute – but also social partnership. Social partnership, into which we entered in 1987, was a new way of doing business in Ireland. Those who engaged in it would freely admit they did not get everything they wanted but would also admit their lot has been greatly improved. There are sections that have not done as well as others. If one looks at the country as a whole, those who engaged in that social partnership from trade union leaders, trade union members, workers who were not members of trade unions, employers and nationally across the country have seen the benefit of partnership. It should be acknowledged there have been significant improvements during that period. It has been primarily due to the partnership engagement that endured here for that period. I would love to stand up and say it was a successful Fianna Fáil Government – it played its part – but it was social partnership.
When the Bill was introduced a couple of weeks ago I listened with interest to the Taoi seach, as I always do, when he made his contribution. A point to which he alluded was that Ireland's debt-GDP position is such that the ratio has fallen from 65% in 1997 to about 34% at the end of last year. In reality this means we have one of the lowest debt ratios in the EU with the exception of Luxembourg. The reduction in the debt GDP ratio has largely been achieved by the economic policies pursued by the Minister for Finance, Deputy McCreevy.
We are going through difficult and turbulent times from a global point of view. Economic growth in Ireland certainly is not what is was as there is a slowdown, with the resultant reduction in revenue available to Government. We are committed to driving the economy forward and managing it in a sustainable way. One of the key elements of that is to successfully target foreign direct investment in Ireland. When revenue to Government is reduced, despite the fact that the economy is growing albeit at a slower pace than we had been used to, but at a higher rate than the EU average and most EU states, if we want to continue our economic advance what is the best way to do that? Is it now time to consider borrowing for major infrastructural projects? I say that with a degree of caution, because borrowing in the past has not always been successful. I appreciate there are various guidelines on debt within EU guidelines for stability and growth. If we want to maintain our growth and our economic focus for the next five to ten years, is the possibility of borrowing for major infrastructural projects worth considering? This is a debate that needs to be entered into but there is a certain caution because in the past borrowing has not always been for viable projects with a financial return. At a time when interest rates globally are relatively low, it is worthy of consideration.
I mentioned earlier that I look at the whole idea of borrowing at this stage because it is important to provide the necessary internal infrastructure if we are to continue to attract foreign investment. There has been a tendency by foreign investors to try to locate around the city. As the House is aware we have adopted a spatial strategy but if we are to be successful in implementing it one of the key elements must be to provide the necessary infrastructure. Up to the current year investors have chosen to invest in and around our city. The idea of borrowing to fast track the necessary infrastructure is an issue that will have to be addressed. I pose that as a question rather than making a political statement. Members of the Opposition will probably jump on the bandwagon and say, we have to assess it in economic terms, what it will cost, what it will deliver and if the return is worth the investment. I put it down as a genuine question. Because of the economic slowdown, if we are to try to maintain our economic progress, it is something we need to look at. I am convinced it is worth trying to provide this infrastructure because we have a history of being successful at bringing foreign direct investment into Ireland.
This morning I looked at the recent IDA Ireland report which refers to direct investment into the country. It states that it was cautiously optimistic for 2003 in regard to inward investment activity, despite the turbulent global conditions. The optimism has now been confirmed by the delivery of 36 IDA supported projects with about 6,300 jobs announced since last September. That is significant. I shall refer to the nature of those jobs later. Earlier I mentioned the importance of education. That was 6,300 jobs coming from direct investment into Ireland. Seán Dorgan went on to say that Ireland's economy was in a significant transition in relation to inward investment. With the changing local and global economic circumstances inward investment has to move up the value chain and become more skills based and innovation led. That brings me to the point about the importance of education. The jobs we are getting are higher skilled.
In my area in Clondalkin, Grange Castle, a world class biotechnology campus, one of the first companies which moved was Wyeth BioPharma which will employ 1,300, more than 50% of whom will be third level graduates, high earners and highly skilled. At present approximately 600 are employed and the number is expected to increase to 900 by the end of the year. Of the 6,300 jobs to which the IDA referred, more than two-thirds would be for graduates of third level, certificate, diploma, degree and post-graduates. It is important to get young people, especially from disadvantaged areas, into the education cycle and to keep them there. This is crucial if they are to have an expectation of a job with future prospects. Certainly the jobs that have been targeted by the IDA are in that category. Some 40% of the jobs in salary scale terms would be what the IDA call above the high skills guideline of €37,000 per annum. The success story is continuing.
As a nation, we have contributed significantly to it by means of social partnership. To sustain it, we must build very rapidly on our infrastructure. I suggested earlier that if we are to fast track the necessary infrastructure, we must consider borrowing. I say that with caution. If we borrow for capital projects of this nature, it is imperative that we ensure a number of things. Construction inflation on a number of projects in recent years has been horrendous and supply and demand issues must be addressed. If we are to invite foreign investment and to adapt it to our spatial strategy, we have little choice but to put the necessary infrastructure in place. If we do that, the people I have represented in socially disadvantaged areas will have real future prospects. I have seen remarkable improvements since the early 1980s. If I were to see the same rate of improvement over the next 20 years, I would be a very happy man.
