Irish Trade Promotion Abroad: Discussion with Department of Foreign Affairs and Enterprise Ireland.

I welcome Ms Mary Whelan of the promoting Ireland abroad division of the Department of Foreign Affairs, who has considerable experience as an ambassador — to which I presume she will add in the near future. I am glad she is present. I also welcome Ms Angela O'Farrell, counsellor, and Ms Elizabeth McCullagh from the promoting Ireland abroad division. From Enterprise Ireland, I welcome Mr. Giles O'Neill, director for Europe, and Mr. David Delaney, head of Government relations. I thank our guests for coming before us.

The purpose of this meeting is to discuss Irish trade promotion abroad. Members will recall that when he came before the committee last month, the Minister for Foreign Affairs, Deputy Martin, stated that currently there is no more important task for his Department than the work of promoting Ireland's economic interests overseas. The committee would like to explore how and the extent to which the Department is responding to this imperative and whether it has been obliged to adapt and reprioritise to take account of the changed global economic landscape.

While the Department, through its network of embassies, has a distinctive role in promoting Irish trade abroad, it is the responsibility of the State agency, Enterprise Ireland, to accelerate the development of Irish companies in global markets. The committee will be keen to explore with Mr. O'Neill and Mr. Delaney how Enterprise Ireland is ensuring the development and promotion of the indigenous business sector and to hear what synergies exist between the work of the Department and Enterprise Ireland.

Before we begin I am obliged to advise the witness that while Members of the Houses enjoy absolute privilege in respect of utterances made at meetings of the committee, witnesses do not enjoy absolute privilege and, accordingly, caution should be exercised, particularly with regard to references of a personal nature. I invite Ms Whelan to address the committee and we will then hear from Mr. O'Neill. Thereafter, we will take questions from members.

Ms Mary Whelan

It is a great pleasure to be here and I thank members for the opportunity to address the committee. As the Minister stated, a key priority of the Department of Foreign Affairs — there is none higher — is to promote Ireland and advance its economic interests overseas in co-operation with other Departments and State agencies. If the Chairman will allow, I will go beyond discussing trade promotion because the committee probably wants to deal with the broader economic issues.

The priority to which I refer is not new for the Department. It is one to which we have attached importance throughout our existence as a Department, particularly in the past 15 to 20 years. It has been fully reflected in our strategy statements and in business plans, at home and abroad, during that period. This objective is delivered through our network of diplomatic missions, the fundamental rationale of which is to advance Irish interests internationally. We see our embassies as the eyes, ears and voice of Ireland overseas.

The promoting Ireland abroad division, PIAD, is made up of three sections that were partly brought together in the past 12 months. We have a staff of 15. The main section of the division deals with bilateral economic relations. In any given week the work can vary across facilitating international agreements of an economic nature — double taxation and social security agreements — working on the economic aspects of high level inward and outward visits, working with our embassies and other Departments on issues relating to the reopening of export markets for Irish products, responding to requests for assistance from business and putting together training programmes for those of our staff going overseas. Since February of this year, the Minister has established a unit to monitor foreign press coverage of the Irish economy and to work with other Departments and agencies to provide material to enable our overseas offices to influence this coverage.

The third area of the division's work relates to promoting Irish culture. We encourage our diplomatic missions to use cultural events to promote a broader awareness of Ireland and to harness our reputation in this area to promote broader economic goals. We work closely with Culture Ireland and are represented on its board. We also provide information material on Ireland in a variety of languages.

The promoting Ireland abroad division, PIAD, is the focal point within the Department for work relating to trade and promotional work, but key aspects of the Department's overall work in that area in Ireland is also carried out in other divisions. For example, the Irish abroad unit in the consular division is responsible for Irish communities overseas and will organise the Farmleigh Global Irish Economic Forum in September. Our Anglo-Irish division deals with the all-island economy and will take the lead on the follow up to the strategic review of relations with the United States. The EU division is engaged in matters relating to EU relations with third countries. Much of the work of the EU division could be seen as central to Ireland's economic relations. The PIAD co-operates with other divisions on these various initiatives.

I will turn now to how we interact with other Departments and agencies in Ireland. As I said earlier, we are the ears, the voice and the eyes of Ireland overseas, but we do not have policy responsibility in most economic areas within Ireland. Primary responsibility for trade policy and trade promotion policy rests with the Department of Enterprise, Trade and Employment, to whom Enterprise Ireland and the IDA report. Other Departments also have a key role in this area, such as the Department of Agriculture, Fisheries and Food, to whom Bord Bia and Bord Iascaigh Mhara report, and the Department of Arts, Sport and Tourism which has responsibility for one of our largest service industries, tourism and for the promotion of Ireland as a destination for English language learning. While other Departments are also involved, these are the more important ones.

We work closely with these Departments and their agencies. For example, we are an active member of the Asia strategy group, which is chaired by the Secretary General of the Department of Enterprise, Trade and Employment, and which oversees implementation of the Government's Asia strategy. Our embassies in Asia report regularly to the group on the implementation of the strategy. We are represented on the market access group for food exports, which is chaired by an assistant secretary of the Department of Agriculture, Fisheries and Food and, at the group's request, our embassies have supplied detailed input into its work. My division of the Department of Foreign Affairs is also represented on the group on international tax issues chaired by the Department of Finance. This group has been considering issues relating to proposed changes in the US tax regime. The group set up to oversee the implementation of the recommendations contained in the strategic review of relations with the United States is chaired by the Minister for Foreign Affairs and includes representatives of all relevant Departments and agencies. That group met for the first time today.

We involve the main promotional agencies in our annual training programmes for those going abroad. For example, we had two training sessions of two and a half days each in May at which we had representatives from the IDA, Enterprise Ireland, Tourism Ireland, Bord Bia and Science Foundation Ireland. This ensures that when our personnel go abroad they understand the priorities of the various agencies. We also would encourage all ambassadors going to major markets to meet with personnel in the various agencies.

I would like to make one final point before moving on from the division in Ireland. The close relationship with the agencies is also demonstrated by the fact we have a person seconded from the IDA to work with us for a year and, previously, we had a person working with the Department for a two-year period. In turn, one of our people is seconded to the Department of Enterprise, Trade and Employment, at counsellor level.

I turn now to the economic work of our embassies. As the committee is aware, the Department maintains 75 overseas offices, 57 embassies, 11 consulates general and other offices and seven permanent missions to international organisations. While their specific contribution will differ, depending on market conditions and related factors, bilateral missions are keenly aware that they have a role to play in promoting trade and investment. Staff are expected to discharge this role in a dynamic manner. In other words, they should not wait for the phone to ring but should get out and promote Ireland.

Embassies promote an awareness of Ireland and its business potential, report on economic trends and developments, support Ireland's trade and investment objectives, act as a problem solver on regulatory issues, provide a network of contacts and assistance, and support other Departments and agencies and, as appropriate, individual companies. Markets differ and this affects how work is organised in each embassy. Trade with countries in the Single Market will clearly put different demands on embassies than trade with a country such as China, Saudi Arabia or Russia, where the state retains a strong role in the economy.

In more developed EU markets, such as France, the focus for embassies tends to be on promotional, networking, media and reporting activities. In other developed markets, such as in the United States or Japan, in addition to promotional work, the embassy will be closely involved in issues affecting wider economic interests. For example, our embassy in the United States, which closely monitored the tax proposals of the leading candidates during the Presidential election last year and hence was in a position to advise at a very early stage on the proposals of the Obama candidacy, is very actively engaged on the tax deferral issue and, at the request of the ambassador, is working closely with the IDA in this regard and an IDA person has been assigned to work in the embassy in Washington on the issue.

In new and emerging markets, promoting a general awareness of Ireland can be important, as can assistance in resolving problems and growing business. For example, we may think we are well known in China, but there are approximately 60 cities in China with a population over 5 million and in some of the larger provinces we do not even scratch the surface. People are not really aware of Ireland and we need to help them become aware of who we are if we are to promote a relationship there. Therefore, we do basic promotional work as well as detailed work on behalf of individual companies and agencies. The potential for developing economic relations is a key consideration when considering establishing a diplomatic presence overseas. The focus of the recently announced embassy in the UAE will be economic, as will the focus of the proposed consulate in Atlanta.

On the issue of co-operation in overseas markets, our embassies and consulates work closely and co-operatively with other Departments and agencies. This is expressed in a variety of ways. In a number of cases, embassies and agencies are co-located in the same building — the Ireland House concept — for example, in Madrid, Tokyo and New York. In some other cases, while occupying separate premises, staff are listed on the embassy diplomatic list. An example is the recently opened Enterprise Ireland office in Sao Paolo.

Ireland House is not always a viable option because of the need for different administrative and business centres. For example, in Italy the embassy is in Rome, but the Enterprise Ireland office is in Milan. In Germany, the embassy must be in Berlin, but the main economic area is along the Frankfurt Rhine corridor. Where Ireland House makes sense and assists agencies, we are open to that idea. We are also open to helping agencies if it assists them to be on the diplomatic list. However, this does not always assist them and in some cases agencies may feel it is better not to stress they are a Government agency. This would be a minus rather than a plus in more free markets.

In major markets where agencies are also present, ambassadors have been instructed to convene regular meetings to co-ordinate and report on promotional activities. People meet each other on a daily, weekly or monthly basis. However, to ensure there is a longer-term strategic view, we have asked that they meet twice a year in a more formal setting to compare calendars and to look at opportunities where they can work together. It can be a case of looking further down the line. For example, the cricket world cup will be held in India in 2010 so already our embassy in New Delhi will be liaising with IDA Ireland, Enterprise Ireland and Tourism Ireland to see how this occasion can be used to promote Ireland. Events such as this must be planned for well in advance. It is similar to the rugby world cup when the Irish team training base was in Bordeaux and a series of events was organised around that venue. We try to co-ordinate those type of activities.

Ambassadors regularly host events for Irish promotional agencies. In some larger states, such as China, Poland or France, ambassadors have led agency visits to specific provinces to highlight the benefits of doing business with Ireland and to create a basic awareness of Ireland. Embassies are expected to be active and dynamic. I was looking for an example that would enable the committee to get a sense of what we do. I refer to a recent example from the past two weeks. Our embassy in Tokyo recently took an initiative with the Department of Communications, Energy and Natural Resources and working with ComReg, Enterprise Ireland and the IDA to organise the first Japan-Ireland forum on ubiquitous innovation. For those who do not know what is meant by "ubiquitous innovation", it means the third wave of the IT revolution. Approximately 127 attended this event including 87 representatives drawn from 58 companies. Embassies, consulates and agencies work closely on the establishment and support of business networks. A good example of this would be the Green Room launched in 2007 in the embassy in Paris which brings together young Irish professionals in France. This started with 60 members and now has more than 350. For those members who might like to see what that type of activity looks like, it has a very good website which received financial support from our Irish abroad unit. The web address There are similar types of organisations in other cities such as the young Irish professionals in New York and something similar in London, which have been initiated or revived by a consulate or embassy.

Close co-operation takes place around ministerial visits to make the best use of the promotional opportunities presented by such visits. This typically involves the Department of Foreign Affairs working with the relevant foreign government, business and with Irish agencies to ensure the maximum economic benefits. This is most evident with regard to travel around St. Patrick's Day but it also happens at other times of the year, such as the Taoiseach's visit to Japan in January, the economic parts of which were co-ordinated by the Department and also his visit to Beijing last November. In a number of cases officials from other Departments are seconded to work in our overseas offices. The most obvious example of this is the permanent representation in Brussels. Other examples include our permanent representation in Geneva and embassies in London, Madrid, Berlin, Rome, Warsaw, Washington and Singapore.

The above is a broad outline of what the Department of Foreign Affairs does and, in particular, what work our embassies undertake. We are constantly looking for ways to improve our capacity in this regard and we would welcome any ideas from committee members.

We will hear from Mr. O'Neill and then take questions for both areas.

Mr. Giles O’Neill

I thank the Chairman and committee members for the opportunity to make a presentation on Ireland's trade promotion abroad and Enterprise Ireland's role in supporting Irish exporting companies. I am joined by my colleague, David Delaney, head of Government relations.

It has long been a truism that Ireland's economic health depends on our ability to sell our goods and services overseas. A total of 80% of everything produced in Ireland is exported, making Ireland one of the most trade-dependent countries in the world. Looking forward, the success of indigenous manufacturing and, increasingly, the success of service companies in securing export sales will be a key driver of job creation and job maintenance. However, the current economic environment presents many difficulties for exporting companies. Most world economies are showing negative growth, particularly the UK, the US, Germany and France, which are our major markets. World trade declined by 9% in 2008. A strong euro has impacted on our competitiveness in the sterling and dollar areas. The answer to the economic challenge we now face is a return to export growth which drove the economy at the beginning of the boom. More Irish-owned companies than ever before are exporting to international markets and in 2008 Irish enterprises grew their exports even in the downturn. Many of these are new technology enterprises set up within the last ten years in areas such as cleantech, medical devices, life sciences, computer software, international services and functional foods.

Currently, Enterprise Ireland's strategy in international markets comprises four key elements: helping Irish client companies sustain their existing business in the UK and US; providing intensive support to expand sales in the eurozone area; working with selected companies who have the scale and experience to exploit opportunities in fast-growing markets such as the Gulf states, China, India, Brazil and Russia; and identifying opportunities arising from government stimulus programmes in the UK, US and other key markets.

Enterprise Ireland has 32 overseas offices. Our staff are both expatriate and locally recruited and are drawn from business sectors relevant to our client base. We work largely on a one-to-one basis in advising and supporting both start-up and established companies to increase their overseas sales. We assist Irish companies in identifying and evaluating market opportunities, making introductions to target customers and decision-makers and in determining the correct distribution channels for their products or services. Through our extensive business networks we provide access to external expertise and market connections. Other services include the provision of sales office incubation units, trade fair and trade mission support and introductions to technology and funding sources.

In Ireland we will continue to promote the development of entrepreneurship and start-up companies, improve the research and development capabilities of clients, help them drive down costs through lean manufacturing and productivity programmes, and invest in the management and selling skills of clients — all crucial components in making our client base export-ready.

Enterprise Ireland is working closely with the Department of Enterprise, Trade and Employment in implementing the Government's Asia strategy, the smart economy recommendations and also in monitoring the rise of protectionism in key markets which would create further barriers to growth.

Abroad, Enterprise Ireland works in close co-operation with the Department of Foreign Affairs. Embassies play a crucial role in accessing key decision-makers, hosting customer events, developing business networks and lobbying on market access issues and trade barriers. In addition, we work closely with local ambassadors in addressing Ireland's reputational and image issues. Enterprise Ireland has signed a memorandum of understanding with Invest Northern Ireland, setting out how the two organisations will co-operate in trade promotion in international markets. Northern Ireland companies have full access to the services of our overseas network.

Enterprise Ireland is striving to work proactively with clients using all mechanisms available to it to help sustain companies in the context of the current downturn. Success in international markets is vital for Ireland's economic recovery. I thank the Chairman for the opportunity to address the committee and I wish the members well in their deliberations. I will be happy to answer any questions.

Mr. O'Neill referred to the fact that in 2008, Irish enterprises grew their exports even in the downturn. I believe there is considerable scope for doing this. We are such a small country and the markets are so big and we should be able to take shares and segments of the markets. As he said, many of the companies doing this were formed in the past ten years. They are getting out and chasing business.

Ms Whelan referred to the question of being proactive and building work and business with the help of the embassies. There was a good example of that last week. As the Chairman of this committee, I was invited by the chairman of the foreign affairs committee of the Romanian Parliament to go to that country to advise it on the best way of drawing down funds. We think we are very bad at the moment, but countries like Romania think we are doing awfully well and are keen to follow in our footsteps. Like the rest of the world, we are having a little hiccup at present. When I agreed to go to Romania, I made it clear that I felt the purpose of my visit could be a little broader. I spoke to the Irish ambassador to Romania, Mr. John Morahan, about the arrangements that were being made. Representatives of Enterprise Ireland participated in the visit.

Two officials from the Department of Finance went to Romania to speak in detail about how these things work. We spoke mainly to Romanian parliamentarians and ministers of state, approximately 65 of whom were in attendance for most of the day. The ambassador said it was tremendously helpful that such a wide range of people were involved. I gave a general talk and answered many questions from a political point of view. I explained how Irish politicians approached all these problems. The Romanian parliamentarians were very interested in such matters. The detailed expositions that were given by the officials from the Department of Finance fitted very well into the seminar. The representatives of Enterprise Ireland also gave some advice. I had suggested that we should meet representatives of Irish companies that operate in Romania, if they felt like coming. Such a meeting was arranged for the day before the seminar in the parliament building. Deputy Durkan, as the Chairman of the Joint Committee on European Affairs, was also present. We had a very good gathering. It was excellent.

Mr. Giles O’Neill

I understand that five companies were represented.

Representatives of eight companies, five of which were Enterprise Ireland client companies, came to the meeting the day before we went to the parliament building. Other companies expressed an interest but were unable to be represented. Some people from here expressed an interest. We did not have much time. Members of the Oireachtas attend and are involved in many parliamentary functions like that I have mentioned. The ambassador, Mr. Morahan, who sent us a letter after the visit to emphasise that it had been particularly helpful, did an excellent job of tying the various strands together. I will ask the members of the committee to comment.

I wish to make it clear that I would not characterise what is happening in the economy as a hiccup. It is actually quite disastrous. Some 400 jobs have been lost in Waterford city, which is in my constituency, over the past week. I am sure Enterprise Ireland and IDA Ireland were heavily involved in bringing the companies in question to Ireland. Some 174 jobs were lost at ABB Limited last week. Bausch & Lomb announced this morning that it intends to let 120 workers go. Over the past seven years, my dealings with Enterprise Ireland have been fantastic. It is a very professional organisation that does fantastic work around the world. Things have changed, however. As Ms Whelan said, there is a need to be proactive and to understand the seriousness of the situation in which we find ourselves. We need to consider how to proceed as we try to deal with it.

Can Mr. O'Neill tell the committee what kind of ongoing contact Enterprise Ireland has with companies that are suffering? He mentioned that it evaluates market opportunities and makes introductions to target customers. Does it contact companies on an ongoing basis to find out how they are doing? Does Enterprise Ireland relate the development and progression of its systems to the companies it brings to Ireland and which export from Ireland?

I would like the members of the various delegations to outline what their biggest problems are. What do they identify as the biggest issues, domestically and globally, being faced in the business environment by the companies with which they deal? We need to know what those issues are. What issues are being encountered by the witnesses on a regular basis? The biggest problem for ABB Limited, which announced last week that it intends to close its Waterford operations, was that its orders dried up. When the construction industry collapsed in Ireland and the UK, the company, which makes transformers, no longer had a market. What do the various organisations represented at this meeting say to such companies? Do they try to find markets that the companies have not identified?

Ms Whelan mentioned the United States in the context of the ongoing debate on the tax deferral issue. I accept that it might seem extraneous from the standpoint of the promoting Ireland abroad division of the Department of Foreign Affairs. For the past year, I have been concerned about the extent of Ireland's influence on Capitol Hill. I am not the only person to have warned about certain problems, as such the tax deferral issue, which are coming down the line. I am concerned that Ireland might not have the appropriate sway or weight on Capitol Hill to deal with these issues. When a delegation from the House of Representatives visited the Oireachtas yesterday, I was surprised to hear a Congresswoman from New York, who is the chairperson of the Hispanic caucus, say that Ireland will not get a bilateral deal with the US on the issue of the undocumented Irish. For me, it was something of a watershed statement. Until recently, the Irish-American lobby had some fairly significant weight on Capitol Hill when it came to legislative matters. It was quite extraordinary to hear a Congresswoman who represents the Hispanic caucus make it clear that there will not be an agreement between Ireland and the US.

Along with certain other people, I have been warning about this serious problem for some time. We have a difficulty in this area. The comment I have mentioned was very worrying. When we talk about issues like tax deferral, we have to ask ourselves what kind of contacts we have on Capitol Hill. What weight do we have on Capitol Hill when important issues like this come down the tracks? I am afraid I am starting to think the influence Ireland can bear on legislative matters on Capitol Hill is not what it used to be. We need to work on that.

I thank Ms Whelan and Mr. O'Neill for their contributions. I have had nothing but good experiences of the officials from the Department of Foreign Affairs and Enterprise Ireland who represent Ireland overseas. I am always amazed by their level of professionalism, commitment and dedication. They punch well above their weight when they represent all aspects of our country.

I would like to respond to a couple of the points that have been made. To what extent do Irish officials monitor press coverage abroad? I am concerned about the amount of negative coverage at home. I refer in particular to untrue or exaggerated coverage. Is it having any impact on Ireland's reputation in other countries? Is there anything we can do about it at this level?

I would like to ask Mr. O'Neill about the construction sector. He spoke about the need to develop Irish industry abroad. Has there been an increase in the number of Irish developers who are working in other countries? Do opportunities exist that they could tap into?

I understand that great opportunities exist in the English language learning sector. What level of co-ordination takes place between the relevant agencies, particularly on issues such as visas? Clearly, a number of Departments are involved in this area. Should specific measures be taken in this regard?

Deputy Deasy raised the issue of taxation. What is the position on the noises emanating from Washington about possible changes in the taxation regime?

We have a number of excellent missions abroad and new missions are being opened, for example, in Dubai. Are there other areas of the world which offer opportunities and where we could open new missions?

The Farmleigh Global Irish Economic Forum is a major event in the calendar this year which provides great opportunities. Perhaps the programme should be broadened to give participants an opportunity to study their genealogy or, more important, make contact with the counties from which their forebears hail. There is any number of examples of substantial and successful businesses located in what are regarded as remote parts of the country because some of those involved had roots in the counties in question. Perhaps the Farmleigh forum should try to promote different counties.

I join colleagues in thanking our guests who do valuable work. I am not sure I get a sense of the urgency of the propaganda that is necessary. This task was undertaken previously in the 1940s when Seán McBride was Minister for Foreign Affairs and Dr. Conor Cruise O'Brien was hired to make the case for Ireland because we were dealing with a very hostile environment. Unfortunately, it is a feature of the degenerated times in which we live that the word "propaganda" has acquired a bad name. Explaining a policy to secure public support for it is a necessary function. We are in a dreadful time in which enormous reputational damage has occurred. This is one immediate focus in relation to the image of Ireland.

One of the points that arises is the confusion that the body politic here — the hegemony or Government — imposes on the likes of Ms Whelan. What must she defend? Some things are indefensible. An interesting parallel one could draw is the case of the United States in the context of the election of President Obama. I do not believe President Obama or anyone acting on his behalf will find it necessary to defend Bernie Madoff. At the same time, Mr. Madoff represents a sizeable part of the American intellectual formation, namely, the notion that one could trust the stock market and people who did funny things without doing anything real or productive. Alan Greenspan, the greatest old fraud of them all, totters around suggesting he did not understand that which he was approving. Listening to him speak about these matters, one realises the extent of the rot that had set in on the other side of the Atlantic. The United States has gained enormously internationally as a result of the Obama Presidency. Young Americans travelling abroad are doing so with more confidence and are being better received.

That is one aspect of reputation. On the other side, it is curious that we will, as a secondary effect, experience the economic impact of what Mr. Madoff did. When I was a young student in the United States, taxi drivers would talk to one about the Dow Jones Index and tell one whether it was up or down. The United Nations was a nation of shareholders where people trusted the stock market. They did not know it would be so comprehensively corrupted from the top. The result of this corruption has been a collapse in the spending of elderly people who make up a significant proportion of the market. The old aged have become the new poor who will go back to work, as they never intended, because they no longer have the investments they believed they would be able to realise in preparation for retirement or the income from equities they had trusted.

What will we do about the issue before us? The first lesson is that it is time to make up our minds about what is defensible and what is indefensible. We are in an entirely different world from the one we inhabited just a short while ago. The Greenspan notion was that the Government of the United States had to capitulate to Wall Street. In many interviews he stated Wall Street had to be given the mortgage related products it demanded because banking had driven on and into a new international version of itself. That world has vanished. This creates immense problems about the kind of new international economic order which is emerging. While it will be entirely different, it will also be full of opportunities.

On the issue about which we are speaking, defending and promoting Ireland abroad, it is crucial that we realise that we cannot defend bad banking. The more truthful and straightforward we are, the more credibility we will have. Why should the most highly educated, creative, innovative and bright people, the 43,000 graduates who have entered a sea of unemployment, carry the downside of the behaviour of a small group of unproductive people, a network clique who all knew each other, exchanged roles and positions and facilitated each other's fraud? I can say this because I have privilege but I hope to say it publicly and often.

If I was speaking about Ireland abroad, I would ask who are the most known and respected Irish people. Curiously, they are writers. It is interesting to note Ms Whelan's reference to Culture Ireland. There is immense respect for Ireland in the cultural area. We never took cultural industries seriously. When I had responsibility for the cultural industries between 1993 and 1997, I remember a time when the income to Ireland from the sale of U2 records exceeded that from Guinness. Apart from music, we had a massive expansion in the film industry where annual gross expenditure in the economy increased from £11.4 million in 1992 to £186 million in 1996. This produced many associated jobs. Culture is an area in which we have credit and opportunities and enjoy respect. The use of the Diaspora is extremely important in this regard because many of them are active in performance and so forth.

As a matter of interest, in 1995 when Stokes Kennedy Crowley compiled a report, the same number of people were working in the cultural industries, albeit in different conditions, as were working in banking. It will be important, in defending Ireland's reputation, to shine a light unremittingly on the small group at the top of one tiny section of the economy. We must call this our "Madoff section". We had our Bernie Madoff people, but we only had a few. It would be wrong to drag the economy, the prospects of graduates and the economic opportunities down with that. I get the impression that there is a sense that perhaps we can put it behind us, get back to where we were and take off again. It will not work and it should not work.

There is a problem in terms of the language we use, which is heavy, imitative and derivative. I am not too keen on the notion of the smart economy. I believe in innovation and technological adaptations. I read the literature about digital natives and digital immigrants from people such as Marc Prensky in MIT. The direction in which the literature is going is that the most important thing is the creative society because it creates endless models of the smart economy and innovation. One version of technology, for example, could destroy creativity. It is creativity that counts, but we do not find people talking enough about creativity. We find people talking about innovation, which is often not clear. We find people talking about smart-dom, as it were.

Mr. O'Neill is correct about one thing, namely, that right through the downturn we are making an enormous amount from services, for example, which is a huge component of our exports. That is wonderful. I am very pro-exports. I find the language fuzzy. In terms of the propaganda about Ireland it is unclear what is being defended and what is being let go, what is being fired to the wolves. We were unlucky to have people who were as silly, stupid, ostentatious, vulgar and un-Irish as all that. We should offer them up for a start.

Moving to the next part of the question about what we can do, it is very important that we have an institutional set of targets. There is nothing as ridiculous as the amount of damage that is done to Ireland's reputation by the so-called ratings agencies, Standard and Poor's, Moody's and others. They are heavily conflicted. How many Irish people know the amount of shares that Warren Buffett owned in those ratings agencies? The ratings agencies gave AAA justifications to products that were the tools of criminals. Every now and then Members of the Dáil get into a tizzy because we might be downgraded. We need to keep our confidence and be able to put out our story.

I had a chat with the late Tony Ryan about the joys and perils of launching a company in either New York or in London. We had very different politics. There was quite an opposition to much that we do. When I was Minister for Arts, Culture and the Gaeltacht with responsibility for the film industry, I had to go to Los Angeles and hold a lunch in Jimmy's to deal with poisonous propaganda being issued by the British tabloids about the film incentives I was introducing. That is what I am talking about in terms of defending our reputation. I am entirely supportive of it, but it needs to be really sharp. It is not about the meetings that were held in such and such a place, where people made a note on it and we were looking for people who were under an obligation to listen to us so that they would not get too bored. It needs to be really sharp, clever stuff in order to defend jobs.

I am very interested in what Mr. O'Neill has said. The cultural industries have potential and we could be doing a great deal more in that regard. We could have done many things previously such as the possession of international rights. I was very involved in the promotion of film and while I achieved certain things, I would like to have done a great deal more on music, which was an obvious one. There is a strong case for much of what we do abroad, for example, the importance of the eurozone as a trading area, apart altogether from the security it gives us on guaranteeing the currency. We should have used downtimes in FÁS for the training of people in foreign languages. We should be in the eurozone selling and doing new things.

There is no point in waiting for a recovery or the end part of a new demand that has been created, because demand is not going to return easily in the United States, contrary to what has been suggested by Alan Ahearne. It is not an ordinary cycle like the ones he studied. It is worse because so much demand has collapsed. One could be talking about new products altogether, such as for example in the patent bank in Brussels, purchasing technologies, entirely new start-ups that are suitable for the highly-educated population that exists.

I am all in favour of people talking positively. I agree with what Enterprise Ireland is trying to do. Its achievement was in the real economy. All the assistance should come to the real economy. I will conclude with my most political point. If I had to make a choice between continuing to subsidise the ghosts of those who brought us down and investing in a stimulus package for the real economy and through Enterprise Ireland, I would have no hesitation in choosing the latter.

I apologise for my absence as I had to attend a vote in the Select Committee on Justice, Equality, Defence and Women's Rights. I thank the witnesses for attending the committee and for their presentations. I commend them on the work that is being done through the Department of Foreign Affairs and Enterprise Ireland. From what I have heard from constituents and from my own observations from trips abroad, meeting embassy staff and my interaction with staff from Enterprise Ireland, I find that in the main the work being done is excellent.

I will not reiterate what Deputy Higgins said. He was a little unfair to Dr. Alan Ahearne in saying that his view is just about cyclical economics. It is not that simplistic. I will give the Deputy a copy of the presentation he gave to us yesterday.

It is a pity he did not influence Mr. Greenspan. He could have given him the tablets before he did so much damage.

We will not go there. I would like an update from Enterprise Ireland on the operation of the viable, vulnerable business fund and the funding of €50 million this year and a further €50 million next year. How many firms have applied for funding? I accept the scheme is at an early stage, but has any funding been made available to export companies? I am pleased that in the 12-month period from June 2008 to June 2009 Irish exports were down a mere 5% compared with UK exports which were down by 25%. The European average was approximately 20%. Compared with our EU colleagues, our market is performing exceptionally well in the current climate. That is something on which we must focus.

Medical devices is a growth area in Ireland currently. What training is provided through industry or third level institutions and at fourth level to assist in the growth of that industry? My concern is that we will not have the human resources to back up that industry. We have been particularly successful in the research and development area in 2008 and to date in 2009, even when the general picture has been gloomy. I would like to hear what we are doing in terms of training and education in the relatively new growth areas to ensure we can offer the necessary human resources to back up the companies involved.

The Asia strategy group and the focus on the Middle East has been discussed by the committee with the Minister and his officials. I am pleased with the move we are making into Abu Dhabi. It is a massive market and we need to have penetration and coverage there. I want more information on staffing and our strategy. Are there particular areas in the Middle East, particularly the Gulf states, that we are seeking to focus on? I note that in north Africa, in particular, our approach is pretty light. We have nothing but some embassy staff.

The export market in Libya is opening up greatly. Mr. David Miliband is visiting the Houses of the Oireachtas today. It is not the case that Britain has stolen the march on us but that we should consider strategies for Libya and how we can increase our market share in that country.

Reference was made to English language courses and to the supports we are giving to companies and tutors to grow our market. Countries such as England and Australia have been particularly successful but we seem to have slipped back over the past ten to 15 years in terms of attracting visitors here to learn English. I refer to students of all ages. We seem to have lost our market share. This is a massive industry and is worth in the order of £5 billion per year in the United Kingdom. Australia, because of its proximity to Asia, is capitalising greatly.

The Department of Justice, Equality and Law Reform can have an input in this area because it determines the ease with which citizens of states beyond the European Union can acquire entry visas and student visas. I refer, in particular, to the Middle East, Asia and North and South America. We have lost a large portion of our market share. The industry could be very valuable to us. I might ask more questions on the basis of the answers I receive.

I welcome the delegates and I was very interested in their presentations. I am well aware of the significance of their work.

Ms Whelan referred in her presentation to the criteria taken into account by various missions. These include political stability, the size of the economy, the existing level of economic engagement with Ireland, the potential of the market for increased trade and the presence or absence of semi-State agencies, but there is none concerning human rights. Is a criterion in this regard always excluded as a matter of principle? Is there co-ordination with human rights sections within the Department? I ask because of the developments in respect of China, which Ms Whelan instanced. It is a very exciting and interesting country and I have been there on numerous occasions, almost always to discuss James Joyce, in whom the Chinese are very interested. As Deputy Higgins implied, Joyce is an avenue into a country such as China, which has an interest in culture. However, the circumstances in Tibet are appalling and certainly not improving. People have been sentenced to death for engaging in human rights demonstrations. If there is no support for human rights, I am quite certain the next generation of Tibetans will opt for violence. They have said to me that nobody is listening or cares and that nobody is giving them any support whatever. They claim they are all going to die and their culture is to be extinguished and that they might as well take a few Chinese with them. To avoid this, it is necessary to have a moral perspective as well as a purely financial one.

It is not just a question of the Tibetans because we must also consider the destruction of the Uyghur culture. Extraordinary insensitivity is demonstrated on the part of the authorities in Beijing regarding the destruction of the cultural heritage of these communities, including the built environment in provinces such as Xinjiang. Is there any human rights or moral perspective?

The concern of the young people in New York is most important. There are graduate groups there who want to mobilise the diaspora. One of the key elements comprises graduates from all our different universities. We were supplied with a very interesting article by Trina Vargo about the tax situation. She is always very bright and acerbic and can sometimes tell us some uncomfortable truths. Sometimes she gets into trouble but I quite like that. I am visiting the United States in two weeks to do a series of public interviews organised by her. Almost as soon as this series was organised, the Trinity graduates in places such as California were looking for tickets. They are aware of what is occurring and can certainly be mobilised. I was delighted because they are my voters and I therefore have no difficulty informing them of my presence in the United States.

Deputy Higgins mentioned cultural exchanges, which are very important. The Department of Foreign Affairs has consistently recognised the centrality of culture, for which I am grateful. In particular, it has used resources in Dublin when dealing with foreign dignitaries. The James Joyce Centre in North Great George's Street could not survive as a purely commercial entity. This is not possible, nor is it anywhere in the world, yet its visitor numbers have increased. The number of visitors is higher than that for the James Joyce Tower, which is extraordinary because it is directly central to the novelUlysses.

In the past month a few dignitaries visited the James Joyce Centre, including Alexander Knaifel, the leading Russian composer. The first thing he asked me to do was give him a tour. I had never heard of him but did not actually let him know that. In the past two weeks, a very brilliant Indian-born American at the forefront of cancer research, by way of using stem cell technology to interfere with leukaemia, visited the James Joyce Centre. He and his wife are passionate about James Joyce and visiting the centre was the only thing he wanted to do. The head of one of the big drug companies here asked me to have dinner with him and I gave him a tour of the centre.

I find the issue of St. Patrick's Day very interesting. I heard the popular view on the radio and there was a storm about those who travel abroad for St. Patrick's Day. How informed was this view? It was very populist and stirred up to some extent. Is there a benefit or yield associated with the kinds of visits in question? I have no personal axe to grind but believe some of the criticism was a little unbalanced. There was a lack of recognition of how useful visits can be. I remember performing in the theatre in Texas when, coincidentally, President McAleese visited. I was invited to a function and saw the way she was able to work a room and speak on economic issues without a note. The audience in Texas really warmed to her.

Consider the quite significant issue of exports in the current economic climate. I believe I heard on the radio this morning there was an increase in our exports — I cannot remember the exact percentage — and that the European average has decreased. That is amazing. We need to emphasise these matters, not just internationally but at home. We are in danger of disappearing into the mire. In this regard, consider the position of people like me, who have managed at last after 65 years to clamber onto a rock of financial security. I do not have a mortgage and my bank account is not in the red. It is only recently that this has happened. However, the economic pain is like a sea washing around and I cannot enjoy my good fortune — I am totally selfish — while the rest of the country is wretched. The news story that our exports have increased and those of every other state have decreased is wonderful and we should be singing it on the front pages of newspapers.

Are entrepreneurships and start-up companies still being held back by red tape? This was one of the problems. This is in contrast with some South American countries which are prepared to take the risk of allowing people to get off the ground and have got rid of much of the red tape involved in setting up a company, allowing almost instant companies. How much bureaucratic discouragement is there in Ireland?

Last night I listened to Joe Jackson on the radio playing his favourite old vinyl records, one of which was "Ac-Cent-Tchu-Ate the Positive". We are not just beholden to the bloody US. We are doing them a favour. Irish companies have large investments there and employ US citizens in the US, a fact we should let them know about.

Small budget films are a very different animal to what comes out of Hollywood. Many Irish produced ones have won many awards around the world for acting, scriptwriting and music. Music is an example of brand identity. One could not buy U2, for example. While they are estimable and wonderful people, I find their music to be some kind of background noise. It certainly does not turn me on and I cannot understand the phenomenon but I am grateful for it. That could be used like James Joyce whose brand identifies Ireland in a way one can never buy. Sinéad O'Connor is another example, particularly the time she tore up a picture of the Pope on television.

The Senator should not forget her brother, Joe O'Connor.


I was delighted at Deputy Higgins's skite about Standard and Poor's. It was a digression but a welcome one. As I have said in the Seanad, I cannot understand how they get away it. These blackguards were completely corrupt. They were being paid by commercial companies to rate them and, of course, they gave them good ratings. He, who pays the piper, calls the tune.

Standard and Poor's, intellectually and morally bankrupt, then had the almighty gall to tell us to change our Government. I cannot believe being told what to do by that shower. This is an opportunity to take a smack at them. I would like to see other countries ganging up on the rating agencies and establishing a fully independent international rating agency because the existing ones are no bloody use to man, beast or fowl.

We cannot overstate the importance of the Department of Foreign Affairs in promoting Irish trade. It has been rumoured that an bord snip nua has proposed a cut in resources going to embassies abroad. Does the delegation believe embassies should be given more funding and have their remits extended to promoting Irish products abroad?

Ms Mary Whelan

The first of Deputy Deasy's questions relating to the largest economic and trade problems abroad would be more for Enterprise Ireland. However, there would be no difference in our answers. The main problem is the collapse of international markets and the drop in imports and exports, evident in the contraction in consumer spending. Our tourism figures are down because people are travelling less. The best for the Irish economy is to support international recovery. The G20 has started this process but no one country can do this on its own.

Ireland's strength is that it is in the eurozone; its weakness is that much of its trade is with countries outside the zone whose currencies have weakened in value. Again, Ireland cannot solve this matter alone.

Deputy Deasy also referred to the Irish influence on Capitol Hill. I would not agree with him on some of the points he made. With St. Patrick's Day, no other country in Europe or elsewhere gets such exposure to Washington, the new Obama Administration and Capitol Hill. If any other country can do that, we would be interested to note it and try to be better next year.

The degree of access is incredible with the Taoiseach meeting the US President, Mr. Obama, the Minister for Foreign Affairs meeting the US Secretary of State and the Tánaiste and Minister for Enterprise, Trade and Employment meeting the US Secretary of the Treasury in three months of the Administration being formed and meeting legislators in Capitol Hill.

I worked there for seven years and saw many a St. Patrick's Day event. In the days of Speaker Tip O'Neill, it would not have been tolerated if a Hispanic member of Congress attempted to dictate the relationship of Ireland and the US or even dare to suggest Ireland had no interest in seeking a bilateral deal on any subject. There was a reason Ireland got 36,000 green cards in the 1980s and 1990s, why we were treated differently with the visa waiver and other issues.

Has it got to the point that we have become so irrelevant that a Hispanic lobby can hold a gun to our heads on an issue that has to do with the southern US border and little to do with 10,000 undocumented Irish on the eastern seaboard? While we may have access to Washington on St. Patrick's Day, we need to realise the extent to our influence in Capitol Hill and the Administration has changed.

Congresswoman Nydia M. Velázquez pointed out the US is going for the comprehensive immigration reform. In that context, it does not wish to break it off with bilateral agreements. It is also believed there are many more undocumented Irish than 10,000. What the Irish Government does is a matter for it to decide. Early on, it wanted to go for the comprehensive immigration reform but that was not possible in the timescale at that stage. We felt it might be timely for a bilateral agreement at that stage.

This is now very urgent in terms of the timing. They were looking for the extra seat they got, which has given them the magical 60 they wanted. That has just emerged today. Certainly they were very committed as regards being helpful to Ireland.

Ms Mary Whelan

As regards the overall relationship, the first day of the strategic review of Ireland's relationship with the US was commissioned by the Taoiseach. As the committee will be aware, Ambassador Collins reported in March, and the report was published at that time. That was precisely to deal with the issue which Deputy Deasy identified, namely, the need to avoid complacency and reinvigorate that relationship. There are between 30 and 40 specific recommendations and, as I said, I attended the first meeting on the implementation of that strategy this morning, which was chaired by the Minister for Foreign Affairs. There is a very strong commitment from all the other Departments involved to ensure that those recommendations are met – and to ensure that this relationship remains central to our foreign and wider economic policy.

Deputy O'Hanlon mentioned the monitoring of press coverage. He made a valid point to the effect that sometimes what we read about ourselves abroad is what we say about ourselves at home. We seem to believe that we are engaged in a domestic discussion at times. Now with the Internet one frequently finds that executives overseas are as likely to googleThe Irish Times as the New York Times or the Irish Independent as any other publication.

I shall come back to some of the issues Deputy Higgins raised in that area in a moment. On the English language learning issue, that is something on which a significant amount of work has been done and certainly there have been problems in the past with visas. We have found that many of those problems are being resolved since the Department of Justice, Equality and Law Reform put its own visa staff into a number of our embassies. We have staff, for example, in Beijing and in Cairo, covering the Middle East, generally, as well as in a number of other locations. This is certainly helping to deal with that particular issue. There are reputational issues in that sector as well to be dealt with and we need to ensure quality of control there.

As regards the global economic forum in September, we hope that this will be the first of its kind. This year, because of the primacy of economic issues, it will deal with the whole question of economic regrowth and so on. It will also look at reputational issues as well as culture and broader issues pertaining to the diaspora. It is hoped that if this is a success, as we believe it will be, we will be able to branch out into other areas in the future. Some of the matters raised by the Deputy are also issues that are taken up in the US strategic review, for example some of the heritage matters, and these also will be pursued. It will not be a one-off, and it is the beginning of something that, hopefully, we shall all look back on with pride.

Deputy Higgins mentioned propaganda. I prefer not to use that word because propaganda might not be true, and every word, of course, that we utter in defence of the reputation of Ireland and the economy is important. In that regard it is not at all a case of defending the indefensible. It is a case of saying that the Irish economic situation must be viewed in the context of what is happening globally. Japanese exports have——

It is called spin.

Ms Mary Whelan

No, it is not necessarily spin. We are in the same boat as everybody else in this context. If one looks at a very comparable economy, for example, Singapore, it is experiencing very similar problems because it built its economic model in the same way Ireland did — namely, outward looking. Our domestic markets are not big enough, so we have to export. However, we must believe in ourselves and that is where we come to in recreating an image of Ireland – as other countries will have to do for themselves.

We have to look at our underlying strengths. We have an educated workforce, far more educated that it was in the last Irish recession in the early 1980s. I shall give examples of some of the figures we are putting together, in this regard, for our embassies to use abroad. The World Bank, in its Doing Business report for 2009 says that Ireland is one of the easiest countries in the world in which to do business. It is ranked seventh out of 181 economies for ease of doing business.

The UNDP report for 2008 says that in terms of quality of life Ireland is among the highest ranked countries in the world on the UN's human development index. The OECD report on education for 2008 found that Ireland had one of the most highly educated and highly skilled labour forces in the world. It said that Ireland's 25 to 34 year olds had an above average level of qualification. One can go down through comments such as that. That investment in education was made by many Governments over a long period, and the benefits are still there. The future is in innovation.

It is in creativity. I use all those figures as well.

Ms Mary Whelan

That is what I am saying. We are not propagandising in a bad way, not even spinning. We are saying, in effect: "Don't be blinded by what is happening now. Look to what is underneath that, and what we have been doing."

I shall quote another source, the benchmark report from the Confederation of Danish Industries, which was published today. That shows Ireland secured sixth place out of the 29 countries surveyed as regards our performance in terms of globalisation. Some of the highest ranked relate to internationalisation and openness. These are the types of things we are saying to our interlocutors overseas.

On the question of culture we had a small cultural section which we incorporated into our economic work because, as the Deputy says, it is a way of developing Ireland's reputation. There is a strong brand recognition there and I am not just talking about the high end of culture, in so far as there are any ends. I refer to productions such as Riverdance which is enormously popular in China, for example. There is also the matter of our cultural success or lack of it on the sporting field, for example the achievements of the Irish rugby team. That is part of our culture as well. We have found very frequently one can move from that into the so-called creative society area.

A good deal has been published about Irish writers, or music even. What is less well known is the economic side of our creativity as well. Irish scientists, for example, are seeking to put a small booklet together at the moment, just pointing to our creativity in the scientific area.

Deputy O'Brien raised the question of Abu Dhabi and our strategy in the Middle East and the Gulf states. The previous Taoiseach went to Saudi Arabia and the UAE, I believe, in January 2007. The work in this area had started before that, but this was the beginning of a new phase in terms of looking to develop our economic relations in that region. Arising from that was the decision to open the embassy in Abu Dhabi. In a sense we see Abu Dhabi as almost a new model of embassy in terms of trying to strengthen Irish relations with the Gulf area as a whole. Previously, the embassy in Riyadh tried to cover the entire Gulf region. They would divide the countries between them now and we will look for opportunities. In those countries it is very important to have high-level visits in the region. That is what facilitates access. When the President visited Bahrain and Abu Dhabi some time ago, for instance, there was an economic component to her trip. She is always very anxious to work with the agencies and so on in developing that type of programme. The Tánaiste has visited the area twice in the past year, and the Minister for Foreign Affairs was there recently. There are definitely strong moves afoot to develop that relationship.

Even in that part of the world we are seeking to develop a cultural relationship, and again, to come back to what Deputy Higgins said, Ireland participated in an EU film festival in Riyadh. The significance of this will be appreciated since there are no cinemas in Riyadh. Therefore, for EU states to come together and create that venue would have attracted a good deal of attention.

Are there any specific areas within the Middle East that are part of our strategy? If there are such specific areas, what are they?

Ms Mary Whelan

I will ask Mr. O'Neill to come back on that. There are other areas where we would have been quite active, which would have come about partly because of those visits. An example is the scholarship programmes. We are now listed in the King Abdullah scholarship programme, which means that we are now able to bring generously funded students into Ireland to study in the Royal College of Surgeons and in the IT sector. That has a good tie in with the language schools. Some of the students coming under the CASP programme would not have great language skills. We have a programme developed with the Department of Justice, Equality and Law Reform so that they can come here in advance and develop their language skills in Athlone Institute of Technology and the Institute of Technology Tralee, before going on to study at other third level institutions.

We are very thin on the ground in South America.

Ms Mary Whelan

We are indeed.

We make very little effort and there is great goodwill towards us in several countries.

Ms Mary Whelan

Back in 1996 or 1997 we only had one embassy in Latin America. That was in Argentina and it was opened immediately after the Second World War to ensure the importation of wheat from that country, and also because we had a community there. Back in 1996 we were looking at where we should open new embassies, and we decided that when resources became available, we would open an embassy in Mexico and in Brazil. It took a long time, as resources do not fall off trees, but we eventually got around to doing that. One wonders where we would be today if we had not thought about developing that further.

Deputy O'Brien mentioned North Africa. We have an embassy in Cairo and we have somebody here today from the Egyptian Embassy. Our embassy in Rome is accredited to Libya, and the ambassador and the people there make every effort to access Libya as often as they can. I must say that it is not always easy for us to get visas. Mr. O'Neill might want to say something about trade promotion.

We are working with others to try to improve the English language situation. As our Minister was previously in the Department of Education and Science, he has a particularly strong commitment to develop these links.

Would Ms Whelan agree that we have slipped back in market share for English language learning among English speaking countries?

Ms Mary Whelan

I do not know where we would be in comparison to other countries, but Mr. O'Neill can come in on that. We should certainly be trying to grow that business outside of Europe, but Europe is still a major market that we should not take for granted. The biggest number of students studying English in Ireland is from Italy. The eurozone allows us access to hard currency, so that is great. We should be growing other markets, but I have a personal hobby horse that we should not ignore what is on our own doorstep.

Senator Norris spoke about human rights in China. In my time at the Department, I have never been aware of a situation where we pulled our punches on human rights. I was our ambassador to the UN Commission on Human Rights in Geneva for five years. During our Presidency in 2004, I had to deliver speeches on the human rights situations in China and in other places, and I never got an e-mail from the Department telling me what I could not say. We are respected by a lot of countries because we do not prevaricate.

A vote has just been called in the Dáil. We will have to suspend soon and come back afterwards.

Ms Mary Whelan

Deputy Timmins referred to an bord snip. It would be easy for me to say that we should be immune to all the cuts. We all know the reality of the situation and there will have to be cuts everywhere. Would that they did not fall on us, but they probably will. We hope to preserve our capacity to support Irish industry overseas as strongly as we can, regardless of our resources. If that means we should become smarter and should do more with less, the committee can be sure we will try to do that.

I want to clarify what Congressman Neal said about the 12.5% tax situation. He said that the view of President Obama is that deferral is not tax avoidance. Therefore, Ireland will not have a problem in that respect. Ireland does not have "brass plate" companies in an office somewhere. Genuine business is done here and there are 93,000 people employed by American companies in Ireland, while there are 83,000 people employed in the US by Irish companies. Congressman Neal felt strongly that the position would be secure for Ireland.

A question was asked about what people in Romania thought about our situation. The GDP per head of population in Romania is €5,365, whereas our GDP is €43,000. However we handle the money, we have much more wealth in the country and the Romanians saw we had been successful and wanted to know about it.

Sitting suspended at 4.55 p.m. and resumed at 5.25 p.m.

I remind witnesses that the proceedings of the committee are recorded and transcribed and will thus be available to members and others. Members are still making their way back to the meeting. There were two votes in the Dáil and may be more in due course. I invite Mr. O'Neill to proceed.

Mr. Giles O’Neill

Perhaps I should wait until the members who asked questions have returned.

I am inclined to proceed. There are several amendments to the legislation being discussed in the House and only two have been dealt with thus far. As the Chairman said, there may well be more votes.

Yes. I understand Deputy O'Brien was anxious to get here. However, we will proceed.

Mr. Giles O’Neill

I will answer some of the questions after which my colleague, Mr. Delaney, may wish to add more. We are all aware that these are particularly difficult times. In my experience, the place to be in such difficult times is as close as possible to the client. Our structures allow for that, with individual executives having small portfolios of client companies for which they have responsibility. The only way to execute that responsibility effectively is by discussing with clients their business needs, the difficulties they face and what can be done about them either independently or with our support. I may be oversimplifying the case somewhat but the clear message we are getting internationally and within Enterprise Ireland is that the main issue for client companies is sales. That is, companies are achieving insufficient sales to continue at their previous pace of development. This has a cascading effect down the business and the only options are to make themselves more competitive by taking costs out or to downsize the business or look at other opportunities.

From an international trade promotion perspective, we are probably busier than we have ever been. More people than ever before are coming to the international offices of Enterprise Ireland seeking help and support. It is our job to provide whatever assistance is required and we do so in various ways. As I said, the main concern is to increase sales and, as such, what client companies are mostly looking for is customers. One of the key actions we have taken this year is to develop a programme that helps client companies to retain and develop customers. An effective way of maintaining customers is by deepening and broadening the existing relationship with those customers. That can be done by getting closer to them, and the best way of doing that is to bring them to Ireland and show them what one can offer them ahead of the competition. We are providing extensive support for client companies in this regard in respect of both their existing customers and potential new customers. Nothing is easy in these very uncertain times, but with the resources we have internationally, we are doing everything we can to help the large numbers of clients coming through our doors to secure their existing market share and expand into other markets.

Deputy O'Hanlon asked about press coverage. Enterprise Ireland is working closely with embassies internationally in trying to counteract negative press. For example, in France we have worked in conjunction with the ambassador and the IDA in engaging a French public relations company with which we have a commercial relationship to convey our message to various elements of the media in that country. We continue to work with this company in order to turn the tide on that negative coverage.

Deputy O'Hanlon also mentioned the construction sector, which leads one to the question of where are the opportunities internationally and to be specific, where are the opportunities in the Gulf raised by Deputy O'Brien. On a scale of one to ten, the construction sector, in respect of products and services, is hitting an eight or a nine in the Gulf. A huge number of Irish companies in that sector work with us across the Gulf, in central and eastern Europe and in the United Kingdom. The numbers of companies that are really trying to internationalise is incredible. We have invested a great deal of time and resources into trying to help them do so. It is not an easy task for some companies that were largely home-based and which supplied construction products and services to the local economy to internationalise such business. The Leadership 4 Growth programme, in which 30 of Ireland's leading chief executive officers have participated, has helped to bridge that gap. That programme, which has just been completed, encompassed subjects such as doing business in the Middle East, central and eastern Europe and the United Kingdom. It has really opened client companies' eyes to what is required, as well as helping them to prioritise those markets they should be targeting.

Deputy O'Brien asked about the market share in educational services of Enterprise Ireland client companies. That is a difficult question to answer and I will ask Mr. Delaney to outline how Enterprise Ireland supports that sector. However, given the level of client interest we have in this regard, it serves as a useful demonstration of how we allocate our resources. We have put more resources than ever before into the Gulf because of client demand. While our resources are limited, we reallocated resources based on opportunity and client demand. There is much interest in the Gulf at present and we have put in more resources there at the expense of other locations.

I apologise for interrupting but does this mean Enterprise Ireland is on top of the education sector?

Mr. Giles O’Neill

I hope so.

There has been a greater concentration on education in the Gulf region.

Mr. Giles O’Neill

Deputy O'Brien asked about the sectors within the Gulf and the focus definitely is on construction products and services. Those are the companies that are banging on our doors most and on which we are spending a great deal of time and resources in an attempt to develop a position for them. Moreover, we are having some success in the Gulf and other similar markets, such as the central and eastern European. Senator Norris asked how important is Saint Patrick's Day. From our perspective, it is tremendously important to have Ministers travel overseas at any point in the year. They are a great support and provide us with tremendous access through the embassies. When we have sufficient notice and can build plans into our calendar of events that are based on clients, sectors and opportunities, it is of great help.

Deputy O'Brien also mentioned the stabilisation fund on which I will ask Mr. Delaney to touch in a little more detail. However, this is a clear indication from Enterprise Ireland, in response to the current economic situation, that we take it extremely seriously. Not only are we galvanising our resources internationally to help clients secure existing sales and win additional sales, we also are willing to invest in those companies to help them do so. This constitutes a major change and sends out a strong message for our international teams. As I stated in the presentation at the outset, much of the work we do is one on one. It pertains to companies coming to a market with a particular product or service and asking whether Enterprise Ireland can help to sell it. Enterprise Ireland spends a great deal of its time engaged in this activity and the ability to support companies in respect of both the financial and market development perspectives is a tremendously strong message. Mr. Delaney will deal with the pipeline shortly.

Hopefully, I have covered the questions I noted as being particularly relevant to Enterprise Ireland in respect of the indigenous and international trade promotions side. If members think I have missed anything, they should say so. However, it might be picked up by Mr. Delaney.

Mr. David Delaney

Hopefully, I will sweep up a few of the other issues. I have to hand a few statistics but hopefully I will not bore members to death with them. I will begin with the proviso that any member who has further detailed questions should contact us. The role of my office obviously is to facilitate our parent Department in any inquiries it might have as to the manner in which we dispose of our large budget. It also deals with the other Departments and has bilateral relations with most elected representatives. When issues, problems or challenges arise in their constituencies, the notes from their constituency clinics often end up directly on my desk or with my team. We are more than happy to address any particular company or sectoral concerns from the enterprise centres to companies seeking funding. Members should make contact with us at any stage and we can continue the dialogue.

I will begin with the enterprise stability fund on which a couple of members touched. Thus far, the fund is proving to be highly successful. I should note it is in addition to other substantial funding arms and mechanisms of Enterprise Ireland, which provide direct support to companies of approximately €80 million to €100 million. Consequently, this fund constitutes an additional €100 million over two years. Our other funding on research and development and growth or productivity continues apace and this fund is in addition to it. I will provide some figures on the fund to members. As they can imagine, hundreds of companies have been in contact with us regarding the fund. We are confident that we will get the bones of the €50 million out to the companies by the end of the year. There is no doubt about it for this year. At this point, I should note the commercial sensitivities in respect of discussing the funding of individual projects. We will report on it as usual in an annual report. It is fair to state that at present, more than a dozen companies have been approved and are getting funding. By the end of the year, I expect that figure will be in excess of 150 companies.

While members do not wish to know their identities, can Mr. Delaney clarify that companies have by now received funding through the stabilisation fund from Enterprise Ireland?

Mr. David Delaney

Yes, they have received legally binding letters of offer from Enterprise Ireland, which they then can take to their banks or other co-funders as evidence of Enterprise Ireland's investment. In general, that greatly increases their credit chances. Members will be interested to note that the largest cohort of requests have come from the construction and food industries, which probably comes as no surprise. The food industry is our largest export area and Enterprise Ireland probably takes it more seriously than any other export, particularly in respect of functional foods. We perceive this industry to have great potential in future, certainly in respect of functional foods. If members have any further questions on the stability fund or regarding particular applications from their constituencies, we will take them.

To clarify, is Mr. Delaney stating that the €50 million allocated for this year will be spent this year?

Mr. David Delaney

That is our intention and we are doing our best. Obviously, we have strict commercial valuation criteria and there are criteria of which we must be aware that will keep us within EU guidelines. Companies still must fulfil criteria and still must have a viable business plan. We have professional evaluators, who in many cases are highly trained people with postgraduate qualifications, who will go through one's business plan. While we would love to give out the funds willy-nilly to an extent, we will be audited by the EU and by our parent Department and must be able to stand over our practices. In general, the mechanism of redeemable preference shares is used, which also should result in a return to the State when we take a stakeholding in such companies. However, it is a cost effective method for these companies to secure credit in a credit market that essentially has collapsed.

What are the EU rules in this regard? Was Enterprise Ireland using the criterion of 15%, as far as direct state aid is concerned?

Mr. David Delaney

Obviously, it depends on the region and on how one defines state aid. For example, were we to issue redeemable preference shares at a rate of 3% when the market rate is at 8%, technically from an EU perspective the rate of subvention being given as state aid would be 5% and we must be mindful of this. Moreover, the EU keeps an extremely close eye on the limits. However, we are mindful of what our competitor enterprise agencies across Europe and, probably more important, globally, can offer. We want to push to the fore and to try to at least match them or to give better products to our potential clients in Ireland. Other entities in other states obviously have similar funds. For example, the fund in Northern Ireland is considerably smaller. Our fund is a lot bigger and complements our other funds of €40 million and €50 million each. Hopefully, many companies are in receipt of a range of funding, be it from a growth fund, a research and development or a stability fund.

Regarding the EU element, are there any issues with EU strictures or regulations preventing further growth or business promotion? Has Enterprise Ireland come across these things? I have dealt with them in respect of people who, when trying to set up in Waterford, are surprised by how little state aid can be given because of EU regulations.

Mr. David Delaney

We send any feedback to our parent Department, which engages with the various arms of the State and through the EU Commission on a number of state-aid programmes. We do not lobby on behalf of clients, but we supply feedback when asked. Given the criteria set down by the EU, Ireland continues to punch above its weight. This fund is innovative, like our other funds. They do not break any rules, but they push them to the maximum to try to deliver to clients.

Deputy O'Brien mentioned start-ups. I could give him the 2005-07 figures, but I should preface them with a statement. As he is aware, Enterprise Ireland is a relatively unique agency in that it sets targets in advance, usually every three years. Our strategic plan sets targets for high-potential start-ups and research and development spend per company — whether it spends €100,000 or €500,000 — and publishes these targets in advance. Up to 2007, we had achieved all of our targets. We will report on 2008 in a matter of one week or ten days. Since it will be laid before the Houses of the Oireachtas, the Deputy will get a chance to see it, but we must give it to our Minister in the first instance, as he can appreciate.

Between 2005 and 2007, 221 start-ups were created with the support of Enterprise Ireland. The target was 210. In 2008, our target was approximately 80 start-ups. While we cannot pre-empt the contents of our annual report, we are confident of having achieved the target. Many of the start-ups in question are in wide and varied industries. Some are in the cultural sector. Others are in the film sector, for example, start-ups in other companies in receipt of other moneys, such as the technological aspect of film making, editing and other matters that I do not fully understand. We are involved in the technological side of the film making industry.

Each time the budget goes over €1 million, there are 52 skills involved, from hairdressing to electrics, from sets to art. It is skill rich and sustainable. Its multiplier is 50% greater than in other areas.

Mr. David Delaney

In a broader definition of culture, several of our companies are involved in the gaming industry, including console gaming, in terms of design, distribution and technology. This could be considered cultural. Those companies have sizable exports. This covers the high-potential start-ups under the stability fund.

May I ask about the stability fund? My question does not have a catch, but it is a fact that where a company has got into difficulty with its main bankers or creditors through asset negotiations, that is, bad purchases in assets, and if one wants to save the three quarters of the business that is separate from the asset — I have particular things in mind — there should be a way of saving the employment and core activity. To put it bluntly, if someone doing well in a particular activity decided to get involved in property and exposed himself or herself through borrowings on a site that is now worth approximately 10% to 20% of its original value, why should this drag the entire firm down?

Under the United States of America's strategy, it is considering ring-fencing some of the core activities so that a toxic asset can be separated from the firm's productive activity and offering foreclosure strategies that would enable people to rent back and senior employees to undertake management buy-outs. In this way, the asset issue is separated from the employment issue.

Mr. David Delaney


Mr. David Delaney

The bottom line for Enterprise Ireland is that the business must be viable. We would take a company's range of assets and liabilities into account.

I apologise for interrupting, but my last point was provoked by the matter of Enterprise Ireland's letter. When one receives the letter, which is valuable and important once issued, and brings it to the bank, the bank begins to look through the filter of the total liabilities of the person involved rather than his or her productive activities. The whole thing has to go down with the person. In this case and leaving NAMA aside, the banking issues are standing as an obstacle to Enterprise Ireland's genuine attempts to save the productive part of the business in question.

Mr. Giles O’Neill

We would expect the bank to be involved at an earlier stage of the process. When we are in discussions with client companies on supporting a viable business plan, the bank needs to be around the table.

At an earlier stage.

Mr. David Delaney

It is worth mentioning that we have an ongoing relationship with the banks, although it has changed with the recent change in the banks' ownership. We are working with them more closely. We are trying to make decisions that reflect the totality of the company. Given the ownership issue, the Government is considering such questions through the commission on the regulation of banks, if that is the right title. Hopefully, guidelines or policy changes to make our aim easier to achieve may result. I understand that the commission is considering it.

For the record, while some fine people have been appointed in the interim, their duty will be to the shareholders and the bank if there are no changes in company law. The notion of public interest appointees who are able to deal with, for example, the unemployment issue is a complete nonsense. There is no evidence that they have had any effect. After a distinguished former Member was recently interviewed, I told him how thoroughly immersed in banking matters he was as opposed to public interest matters.

While I take Deputy O'Brien's point that the banking commission will need to address the business issue, many of my constituents have approached me about it. It is extraordinary that the vociferous chambers of commerce have been slow in addressing it. The Minister of State has been meeting different people in the cities. I do not know what is wrong with people if they do not realise that the banks — let us move to try to forgive some of our memories of them — are wrecking one town after another. I have dealt with small companies that managed to get temporary liquidity and so forth. Had they gone near their banks, it would have been absorbed into the black hole that was their debt in the banks and the banks could not have cared less. Let the main banks in Galway write to us if they feel like it, but they could not care less if the whole of the city was unemployed.

Just one minor point to provide balance, Deputy Higgins has not mentioned the fact that the Minister for Finance and, therefore, the taxpayer is a major shareholder in the banks. While the Government appointees are responsible to the shareholder, the major shareholder in the two main banks is the State. He needs to take this into account.

I do, but it is——

He has not mentioned it. For that reason, I wanted to put it on the record.

It is an intergenerational transfer of toxic debt onto people who have not yet been born.

We could have another discussion on that.

It is called sharing the madness.

It is called nationalisation.

Could we leave Galway and go back to Mr. Delaney?

Mr. David Delaney

Deputy O'Brien raised the issue of medical devices, a field in which we are heavily involved. I will provide a couple of numbers. We have more than 20 business incubation centres, six specialist bio-incubation centres in various universities, and more than 230 companies in campus incubation centres, which employ approximately 1,100 people. Much of this work is in the bio-medical area. We are pushing it as far as we can.

Is the information available on the non-commercial aspect of this?

Mr. David Delaney

It was in previous annual reports and the new annual report will have it. This will be laid before the Houses.

Can a copy be sent to the clerk?

Mr. David Delaney

We will organise that. At the micro level, the committee is aware of the Enterprise Ireland innovation vouchers. While these are only €5,000 each, they are proving very successful and help the academic side come closer to the business side. In excess of 550 vouchers from 2008 will be paid out, representing some €3 million. There are six south-eastern applied materials research enhancement centres in the 11 institutes of technology in Ireland. In excess of €30 million was deployed by Enterprise Ireland on more than 130 commercially focused research projects supported under the commercialisation fund. Several new, high potential start-up companies emerged from research sponsored by Enterprise Ireland. In excess of 20 agreements for licensing new technology were signed in 2008 as a result of Enterprise Ireland funding. In excess of €16 million was approved by Enterprise Ireland in support of in-company research and development projects.

Can Enterprise Ireland provide a note on this material?

Mr. David Delaney

Yes, and we can provide the annual reports to the clerk for speedy transmission to Members.

Deputy Deasy referred to his constituency and job closures. As the Tánaiste stated recently in replies to parliamentary questions, all agencies work in a co-ordinated manner. There is a co-ordinated approach to get to companies that are in trouble and to try to help them as soon as possible. When companies approach trouble, those in or around the companies approach us and tell us that they have ideas for business. We try to follow the model of Digital Electronic Corporation. When that company was in trouble, Enterprise Ireland and its legacy agencies got involved. One could calculate that more people are now employed in Enterprise Ireland supported initiatives flowing from Digital Electronic Corporation than Digital Electronic Corporation employed. When companies are in trouble, representatives of Enterprise Ireland go out meeting companies on a regular basis through its network of eight regional offices. We recently had a series regional roadshows that tackled topics such as sterling and the eurozone. These were well attended. We are in regular contact with 800 or 900 companies and we are attempting to reignite contact with another 1,000 companies. The message from Enterprise Ireland is that we are open for business and we are trying to help companies however we can.

I refer to the Chairman's comments on public tendering across eastern Europe. Deputy O'Brien referred to the Gulf. The African Games are coming up and many economists have said that irrespective of the manner in which recessions dip and flow, states will spend a great deal of money on state projects. There is a general trend, no matter how recessions go. Much money will be spent on the African Games and Irish construction companies are working together. Some are doing so in consortia, following their work on the leadership for growth programme. We encourage them to work as consortia for the first time. This is a cultural shift for construction companies. Some companies work as consortia and bid for projects in the African Games, the London Olympics and the schools building programme there.

Thank you. We could go on for quite a long time but everyone has had nearly enough. There are various matters we would like to discuss in more detail. Perhaps we can follow up on some areas later. The committee plans to explore Ireland's interests abroad and follow up that issue. It is regarded as very important. We want to hear the views of the key State agencies and the private sector on the role the Department of Foreign Affairs should take in that area. We want to encourage the dynamic development to which Mr. Delaney refers.

Mr. Delaney referred to research and development. We have been pressing that in recent times in meetings in Parliament. We have a great number of PhD and masters degrees. When one sees the numbers in various universities, one wonders where the innovation goes. One should not get a PhD unless one does something new and different. I went through the process, spending 13 years in research and development.

There are serious questions about the heads of universities and what they are trying to do to the universities. We could have a whole session on that.

We could.

They are not creating but imitating everything they have read about rather than being creative.

I agree with Deputy Higgins on the importance of creativity and research. The Japanese refer to imitative innovation and did much development on this. I do not mind how one goes about it as long as we get it to happen. From contacts with other committees on foreign affairs and from our members meeting others, people ask us about things. People see where we are and ask us how we drew down funds from the EU. Ireland did so successfully and we are anxious to be helpful. When the ambassador organises something comprehensive, it suits everybody. The event last week was excellent. The Chairman of the Joint Committee on European Affairs attended and contributed. We had a worthwhile seminar.

We want to produce a report to support what the Department of Foreign Affairs is doing. The Department of Foreign Affairs does not appear to have enough people in the trade operations section. The same applies to Enterprise Ireland. The man who came to us — Mr. David Butler — had responsibility for Hungary, Bulgaria and Romania. He was great but it stretches him a bit far. He can be helpful in all those areas and it was a great occasion for him. He had many people who he wanted to contact there.

The committee is happy to do anything it can do. Deputy Higgins stated he was the Minister with responsibility for arts, music and culture and he has tremendous contacts. My brother was the managing director of Polygram and Polydor. He is regarded as the father of the Irish recording industry because he was the first to start recording Irish people. The people here have great contacts and it is important to use them. We get frustrated when we get to places and cannot contribute in practice as much as we know we could. The event last week was great and the ambassador was tremendous. He brought everyone together. The embassy arranged for the two finance people to join us and play their part. This is important, particularly in respect of tenders. We got much information on tenders from the people trying to do business there. They told us what was happening. If we can be as real as possible in those areas then all the better. We plan to produce a report and we would like to receive further information from the witnesses on the various segments involved. We have a research service within the House and it will assist us in compiling the report.

Africa was mentioned and we are very much involved there. Our embassies, NGOs and religious do tremendous work there and Ireland has a fantastic reputation. They seek more support and help from us and we should do much more. I will not tell the witnesses some of what they say when they speak around the table on what the Department of Foreign Affairs should invest because I was deeply involved in 1987 and I probably had the largest budget at that time. I might tell the witnesses afterwards. People are very concerned about real development and our position internationally, and about working in partnership with the countries there.

I thank the witnesses for attending and for staying with us for so long. We wish them well and hope those who will travel soon will be very happy and successful where they go. Their contributions here have been excellent.

The joint committee went into private session at 6.05 p.m. and adjourned at 6.10 p.m. until 4 p.m. on Tuesday, 7 July 2009.