Speech to to World Affairs Council of Philadelphia in Dublin Port

26 April 2012

by Cllr Joe Costello

I am delighted to be onboard this wonderful ship this evening to speak to you about my work as Minister for Trade and Development and to say a few words about the economy and the next step in Ireland’s course through its economic problems—the referendum on the Stability Treaty.   I am sure you are all aware of the economic tempest that Ireland has negotiated over the past number of years; while much work still needs to be done, we are making progress on setting Ireland on a steadier course. 

I am sure that everyone onboard is keenly aware of the challenges facing this country and the wider global economy.  The Government is committed to meeting these challenges.   

The Irish economy is growing again, our public finances are under control and the Government is using its strong political mandate to build upon this to deliver long term, sustainable growth. We are on track to bring the deficit below 3% of Gross Domestic Product by 2015.  We have restructured and recapitalised our banking systems. Labour costs have improved. New initiatives have been launched to boost job creation.

However, our living standards and our capacity to create jobs depend on our ability to trade and to attract investment.  For that to happen and for economic recovery to be possible, we need stability—stability in Ireland and stability in Europe.  The kind of stability that gives investors and families reasonable certainty about what the future holds.

This Government has made steady progress in rebuilding Ireland’s international reputation, which has seen investor confidence in Ireland increase significantly.  This has led to new investments and these investments are creating new jobs for our people.  Ratification of the Stability Treaty will allow this flow of investment to continue and expand.

The creation of stronger fiscal rules is an essential element of the steps that are needed to ensure stability, confidence and growth here in Ireland, and in the Eurozone.

The Treaty is an important part of that package because it provides assurance that the kinds of problem that have emerged in Greece cannot happen again.  This treaty will also ensure that the reckless economic mismanagement that drove our country to the brink of bankruptcy will not be repeated by any future Government.

Putting in place this credible commitment to responsible budgeting will be key to keeping interest rates low and unlocking credit availability for investment and job creation.

I believe that, when the importance and merits of this treaty are communicated to the Irish people, they will endorse it by voting Yes to continued economic stability and recovery. 

Despite the challenges we are facing, Ireland has a positive story to tell.  As I mentioned, the economy is growing again. Last year, GDP grew by 0.7 %.  This is the first increase in economic growth since 2007.  This growth is driven largely by exports, thanks in no small part to significant improvements in competitiveness. Ireland’s total exports for 2011 reached €172bn, an annual increase of 6% and an all-time record.  This follows a trend of recovery set in 2010 when exports grew by 8%.   You may be interested to know that 2 out of every 3 containers leaving Ireland pass through Dublin Port, where you are currently anchored. 

Our strong export performance has seen our current account balance move into surplus. Ireland recorded the third-largest trade surplus among EU member states for January 2012, reaching €3.2 billion.  

When I tell you that Ireland exports 90% of its GDP, you will understand why we must ensure that this positive trend continues and why this Government is doing everything it can to help Irish Entrepreneurs to grow their businesses overseas and to find new markets. 

Last September, the Tánaiste established the Export Trade Council.  The council, which is made up of the relevant Ministers, Departments and State Agencies and individuals from the private sector with relevant experience, oversees implementation of the Government’s Trade and Investing in a Smart Economy Strategy. The Strategy provides for the integrated promotion of overseas trade, tourism and investment and seeks to build on our strengths in existing markets and develop exports and tourism in emerging economies. 

The U.S., the U.K. and our Eurozone partners continue to be key markets for Ireland, given our strong knowledge and understanding of these markets and the embedded relationships that include historical and cultural connections. 

However, the Government is also fully committed to developing and expanding engagement with key high potential markets, such as the BRIC countries—Brazil, Russia, India and China—as well as a number of countries in the Middle East, East Asia and South Africa.  These are high growth economies with rapidly growing middle classes where there is potential for increased trade and investment.   We are already increasing our trade foot print in the BRIC markets. In the four years between 2006 and 2010 our Merchandise Exports to them have increased by 69% and our Services Exports by an even more impressive 130%. 

I believe that we will be successful in continuing to grow Ireland’s exports over the coming years. Not only because we have the right Strategy and Government structures in place, but also because Irish companies are producing high quality goods and services that are in demand worldwide. 

I saw firsthand the determination and skills of Irish entrepreneurs in finding new markets for their innovative products when I led a Trade Mission to Turkey last month. I believe that this trade mission provides a good example of the depth and breadth of Ireland’s enterprise base. I travelled to Istanbul and Ankara with 25 Irish companies, covering sectors such as telecoms, energy, environmental services, health and education. The group included an engineering services company that was building on its 30 years of international experience as well as a small telecoms company that has reached over 40 countries within its first year. Whether new or well established, whether in high-tech or more traditional industries, these companies shared a common characteristic: a commitment to delivering high quality, innovative products, and to developing strong and lasting partnerships with their customers. Above all else I believe that this commitment will ensure Ireland’s future export led growth.

I would also like to say a few words about the other part of my portfolio—development—and discuss some of the links between trade and development.  

Irish Aid is the program of assistance that Ireland provides from taxpayers’ money to help the poorest people in the world and to help those who are most at risk.  

We are very proud of the development aid programme and its achievements, and we value the broad cross-party and public support on which it is based.  Development remains central to Ireland’s foreign policy.  The programme reflects our values as a people and our sense of solidarity with those less privileged than ourselves, even at a time of great difficulty at home.  Our aid is rigorously focused on reducing poverty, eradicating hunger, helping children to survive their first year and go to school and ensuring that families have food to eat and clean water to drink. 

And I am proud to say that Ireland’s aid programme has been consistently recognised internationally as one of the best in the world. The OECD has described it as ‘cutting edge’. The centre for Global Development in Washington has rated it as one of the three most effective internationally.   Furthermore, the Program for Government  states that the Government is committed to the 0.7% of GNP target for Overseas Development Aid, with the aim of achieving this by 2015. 

It is clear that our aid is working. We are delivering results that we can see and measure.  I visited our programme in Ethiopia in January and saw the impact of Ireland’s assistance on the ground.  The environmental work that Ireland supports in northern Ethiopia has helped to protect 7.5 million people from hunger through an innovative cash for work programme, which involves the building of thousands of terraces and small dams. These public works conserve water and soil and improve the productivity of the land, ensuring that farmers’ yields are increased over the long-term.  

I also visited Malawi this year.  Our support of a Government programme to provide 1.6 million farmers with subsidised fertiliser and seeds has seen the country go from a net importer to a net exporter of maize in just a few years. This has led to enormous improvements in the number of families who now have enough food to eat.

Another programme I witnessed in Malawi involved a new design for a ceramic cooking stove whose development was supported by Irish Aid.  The stove is made locally from local clay with local labour.  It cooks better and uses only a fraction of the wood used in traditional cooking.  It saves women hours of work previously spent collecting wood for traditional cooking.  It reduces deforestation and, thereby, reduces climate change.  Those travel brochure pictures of African women gracefully carrying bundles of wood on their heads in reality represent hours of daily drudgery collecting scarce wood and degrading a fragile environment.  

The 32,000 households in which the ceramic stove was piloted are now earning 3-4 euro per month each through an Irish company set up to trade carbon credits on the international market.  Next year, the program will be extended to 100,000 households.  This is a quality project that can be replicated throughout the country and elsewhere in Africa.  It can produce enormous benefits for the local people and the local environment.  It can also produce a small cash income.  It can help to move vulnerable people from fragile subsistence to a sustainable livelihood and on towards self-sufficiency, which is the ultimate objective of Irish Aid.  

Our development programme is not a purely charitable endeavour, although its values and principles are of the highest moral calibre.  It is in our own interest to bring about a fairer and more equitable world. Such a world will bring new markets for our goods. It will enhance the prospects for peace and stability. It will enable all countries in the world to act in a more unified way to address global challenges such as climate change.  Many countries in Africa are now experiencing economic growth on a scale never achieved before. Africa is rich in economic potential, in mineral wealth and in young people. Growth rates in many countries reached 7% over the last five years.

While Aid has served Africa well, my Department’s Africa Strategy acknowledges that the needs of Africa cannot be served by aid alone. Aid does not create employment or large scale sustainable economic growth. This must be driven by private investors who have a long term interest in the development of the local economy.  Trade in Africa is about moving beyond aid dependency. It is about bringing in new investors including Irish investors to Africa to generate economic growth.  My Department has trained a focal person in each of our Embassies across Africa to increase trade capacity and bilateral trade.  In terms of partnerships, Enterprise Ireland will play a role focusing initially on the opportunities in the South Africa market. 

I am proud of the achievements that Ireland has effected in the lives of the world’s poorest. We are making a real difference by targeting our aid rigorously and working in partnership with the Governments and communities of our partner countries and with NGOs.  I want to ensure that Ireland can meet its international commitments and that that Irish people can remain proud of their contribution to the building of a fairer society, not just at home but also in the poorest countries and communities.