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Economic Competitiveness.

Dáil Éireann Debate, Wednesday - 23 June 2004

Wednesday, 23 June 2004

Questions (96)

Bernard J. Durkan

Question:

98 Mr. Durkan asked the Minister for Finance the way in which he sees Ireland competing with low wage economies in the future; and if he will make a statement on the matter. [18876/04]

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Written answers

As indicated in Sustaining Progress, renewing competitiveness is central to the overall macroeconomic policy of sustaining non-inflationary economic growth and high levels of employment and is being dealt with under a broad range of policy headings. These include among others fiscal policy, income developments, competition and regulatory frameworks, infrastructure and labour market policies and the maintenance of conditions in which investment and enterprise can flourish.

As a small, open economy which is highly integrated into the global economy through our strong trade and investment links, economic conditions in Ireland are largely determined by our ability to supply goods and services to our main trading partners. It is vital in this context that wage and cost developments evolve in line with the agreed terms of Sustaining Progress.

The sound policies that built international recognition for our competitiveness and business capability have seen us through recent difficult global economic events. Ireland is, however, no longer a lower cost location for investment and the factors that have helped to make us one of the most dynamic economies in the world are becoming less relevant in the current international environment.

In order to ensure that our enterprise policies meet the needs of the economy in the medium term, my colleague, the Tánaiste, Deputy Mary Harney, established the enterprise strategy group last year. The group was mandated to chart Ireland's enterprise strategy over the next decade and to ensure that we remain the dynamic economy we are today. Under its terms of reference, the group is to develop a medium-term enterprise strategy and propose and prioritise national policy responses, taking into account Ireland's increased prosperity and changing cost and competitiveness base, future trends in demography, regulatory environment, and our physical research and development and technological infrastructures.

The group will also take account of long-term trends in globalisation, EU enlargement and the pervasive influence of technology underpinning our future. It is considering how to support industries of the future where Ireland is or can become a substantial player, with particular reference to segments of the ICT area, life sciences, food, financial services and internationally traded services sectors. The scope for new business promotion and generating more intensive entrepreneurial activity is also high on the group's terms of reference. The group has been asked to report by the middle of the year.

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