ADDRESS BY THE PRESIDENT OF IRELAND, MARY McALEESE TO THE JEDDAH ECONOMIC FORUM SUNDAY, 12 FEBRUARY
ADDRESS BY THE PRESIDENT OF IRELAND, MARY McALEESE TO THE JEDDAH ECONOMIC FORUM SUNDAY, 12 FEBRUARY, 2006
As Salaamu Alaykum wa rahmat Ullahi wa barakatu
(Peace be with you and the mercy of God and His blessings)
Distinguished Guests, Excellencies, Ladies and Gentlemen
There is a photograph in the Irish Embassy in Riyadh which resonates particularly with me. It was taken during a visit to Ireland in 1919 by His Royal Highness Prince Faisal bin Abdul Aziz, later of course King Faisal. This was the first official visit that we know of by a member of the Saudi Royal Family to Ireland, which means that the relations between Saudi Arabia and Ireland go back at least 87 years.
During his visit to Ireland, Prince Faisal made a call on the Viceroy – the representative of the British Crown in Ireland – because Ireland was still under British rule at that time. The photograph was taken at the Lieutenant Governor’s residence – which since Independence is now the official residence of the President of Ireland – and is my home.
This personal connection makes it a double honour for me to address this 7th Meeting of the Jeddah Economic Forum. Since it was first held in 2000, the Forum has made a most constructive contribution to thinking and development in the region. I am sure that this year’s sessions on “Seeding Potentials for Economic Growth” will be equally important.
1919, when Prince Faisal visited Ireland, was a turbulent time in our history. It was during our War of Independence, which led to our self-government in 1922. Both Saudi Arabia and Ireland have travelled a long road since then and I thought that we could usefully share the experiences of our journeys. I will tell you something of Ireland’s journey, and for this mini‑travelogue, I have chosen the title:
When Everybody Grows, Everybody Wins
I intend to use this title as a signpost on the road which we have taken, with many twists and turns, to our present state of economic and social development.
We are a country which has undergone an economic and social revolution in the past 10 years, so enormous have been the changes which have taken place both in our economy and in our society.
We are a country, which in living memory has moved from the heart-rending separations of emigration, which split families apart for generations. We are now a country of net immigration, welcoming every year a large number of people from around the world to our shores. Their presence in Ireland provides us with new insights into the immense and invaluable diversity we can find when we open our doors to others.
We are a country, which has known at first hand the sheer bleakness of endemic poverty and the personal toll of relentlessly high unemployment. But, today we have achieved a GNP per capita of over 30,000 Euros and we have almost full employment.
Old Friendships; New Possibilities.
Is Ireland’s experience relevant to other countries? Can other countries benefit from our development choices, from the lessons hard learned by our people and the successes hard won? Every country is unique and I would not presume to suggest how others might succeed economically. I believe however that sharing knowledge and experience for mutual benefit and growth is the very essence of globalisation productively used. With your forbearance, therefore, I will tell you Ireland’s story.
There is an old Irish saying “ar scath a chéile a mhaireann na daoine”, which means “people live in each other’s shadow”. It is a belief of mine and one I have spoken of on many occasions. It is a poetic way of saying that we have an absolute need for interaction with each other in order to grow and develop our full potential as individuals and as nations.
We speak of globalisation today as if it were a new phenomenon, but in truth it has always been an aspect of our humanity – that instinct in all of us as social animals to trade and exchange ideas with those around us in order to go forward, to progress. Where would Europe be today if it had resisted the flowering of mathematics, of astronomy, of medicine, which took place in the Arab World and spread outwards during the Middle Ages? Had it resisted, it would not be Europe as we now know it.
In Ireland, we have achieved historic levels of economic success and prosperity. But we have also had the experience of striving over and over again to make progress only to be confronted by the emptiness of failure. In speaking today about my country, the choices made, the failures and the successes, I hope that others may find elements of our journey useful in helping to chart their own individual path to economic development.
The Celtic Tiger in the making.
Celtic Tiger Ireland was not born in one single conclusive act. It developed over time and a number of fundamental elements were key contributors to it. These include:
Firstly, Openness , embracing
An openness to international trade in goods, services and new ideas
Substantial inward investment flows; and
Membership of the EU and Eurozone, with proactive participation at the heart of Europe.
Secondly, Inclusiveness , embracing
The provision of free quality education for all our citizens, regardless of their economic status, sex, religion or social position;
The removal of barriers to employment and participation in the economy which some people, particularly women, had faced; and
A Social Partnership approach to economic development which involved the government, employers, trade unions, farmers and voluntary sector in hammering out a national consensus.
Thirdly, a Strategic Focus on the Future, embracing
The pursuit of pragmatic and innovative Government policies; and
An increasing emphasis on nurturing technological innovation.
Ireland - an Open Economy
Ireland is now one of the most globalised economies in the world, with the huge growth in employment and incomes that we enjoy going hand in hand with increased openness. But belief in an open trading environment was not always a feature of our trade policy. It was arrived at slowly and through our own unique and often painful experiences.
1930’s Ireland was a country far removed from the Ireland of today. It was a country of carefully constructed protectionism in the form of high tariff barriers and restrictions on foreign ownership. This was aimed at developing native manufacturing industries and in the beginning it seemed a successful strategy.
But, this early success was soon overshadowed by failure, and the cost in human terms was immeasurable. Emigration, especially of young people, became substantial. During the course of the 1950’s, over 400,000 Irish people, out of a total population of less than 3 million, are reported to have left Ireland to find work.
It was against this background of personal hardship and family loss that Ireland turned to confront and embrace the considerable challenges of free trade.
The Anglo Irish Free Trade Area Agreement, which we signed with Great Britain in 1965, ushered in a new era with the phasing out over a 10 year period of all tariffs on goods from our then largest trading partner. Eight years later, in 1973, Ireland’s external economic orientation and focus became further embedded when we joined the European Economic Community, now the European Union or EU.
The trade and investment liberalisation that culminated in Ireland’s EU membership were pivotal in shifting the Irish economy to a new phase of economic development. But, even so, the rewards of EU membership were not instant. Difficult choices had to be made before we firmly embarked on the road which has led to Ireland becoming the confident, outward looking trading nation which we are today.
With the enlargement of the European Union, which Ireland fully supports, we are now part of a market of 456 million people, over 100 times larger than the size of the Irish domestic market. Because of our willingness to embrace openness fully and pro‑actively we have benefited hugely from the creation of the EU Single Market in goods, services, capital and labour and from the wider trend towards global trade liberalisation.
Ireland - an Inclusive Society
Our ability to compete effectively in the global market has been underpinned by the development of a skilled and highly educated work force, with a strong focus on business - relevant skills and, crucially, the capacity to embrace change. Ireland’s education system is one of the best in the world in meeting the needs of a competitive economy according to the 2005 International Institute for Management Development World Competitiveness Report.
It was Ireland’s inclusive extension of free second-level education to all Irish citizens, introduced in the 1960’s, which 30 years later was to deliver undreamt of rewards. It was that step, taken with the aim of giving everyone in society an equal chance to grow and develop, which over the years honed the competitive edge of our labour force and was instrumental in growing our economy.
In the 1990’s we took steps to further consolidate this approach by greatly widening access to third level education for our citizens. Since then, the proportion of our working population with third-level qualifications continues to rise and is likely to reach 40% by the end of this decade. The number with qualifications in science, technology and business is also growing.
Like Education, the Social Partnership process, has been one of the foundations of Ireland’s economic transformation. Launched in 1987 and endorsed by every Government since, this process has brought together all of the key elements in society – the Government, the employers, the trade unions, the farming sector and the representatives of the community and voluntary sectors – to build a national consensus around economic and social policies. It is a process which has brought rich dividends in terms of employment, growth and social cohesion.
Ireland – a Forward Looking Nation
Forward‑looking and innovative Government Policies have also contributed significantly to our success. These have included:
the introduction of a low rate of corporation tax to encourage greater foreign direct investment and specific targeting of foreign direct investment in key areas such as IT, financial services, biotechnology and pharmaceuticals; the development of major programmes for investment in infrastructure through our National Development Plan, including, most recently, a transport investment plan to take us to the year 2010; and, crucially a constructive focus on the consolidation of Ireland as a knowledge-based society, with a five-fold increase in research investment allocated over the course of the current National Development Plan to 2006 and the development of a major new strategy for Science, Technology and Innovation to take us to the year 2013.
Ireland Today – the Celtic Identity in the Global World
The Irish economy is now one of the world’s most dynamic and globalised, with extensive external trade and investment links. In January this year, Ireland was ranked the most free economy in the European Union and third in the world behind Hong Kong and Singapore.
The Irish Financial Services Centre is one of the leading locations worldwide for internet banking, insurance and investment funds. It is host to more than half of the world’s top 20 insurance companies and to more than half of the world’s 50 largest banks.
Irish companies are also building a worldwide reputation for delivering innovative high technology products and services. In today’s technology-led marketplace, the competitive advantage of a nation depends on the ability to innovate. Ireland’s competitiveness is increasingly based on knowledge, innovation, flexibility and the ability to work together with international partners and customers.
The driving force behind the spectacular growth in Ireland in recent times has been foreign direct investment. Much of this is concentrated in the areas of Information Communication Technology and Pharmaceuticals. US investors, in particular, accessed Ireland as a ‘gateway’ into the European market, an important attraction for many such companies being our EU and Eurozone membership. There are now more than 1,000 overseas companies operating in Ireland including 7 of the world’s top ten ICT companies.
Today, Ireland has one of the highest concentrations of ICT activity and employment in the area of the Organisation for Economic Cooperation and Development, OECD.
We have become the location of choice for many world-leading companies and not just in the ICT sector. 13 of the world’s top Pharmaceutical companies also have plants in Ireland. In recent weeks, the world's largest biotechnology company, Amgen, announced plans to invest up to €1.3 billion in a manufacturing operation in Co Cork.
With 40% of our population under 25, our ability to use knowledge quickly, flexibly and creatively is seen as a distinguishing and valuable feature of Ireland which world class companies can profitably use.
It is important to remember that the Irish experience of development is recent and may therefore be relevant to those countries who seek to emulate our progress. The changes have taken place in my generation. I recall very personally the electrification of rural Ireland when I was a child – my grandfather would have none of this new electricity in his house, fearful as he was of bills - for his was a subsistence economy. And I watched as my grandmother continued to read by candle and oil lamp and to do her laundry by hand while my grandfather’s more progressive neighbours installed electric light, used washing machines, listened to the radio and watched television! I eventually inherited their house and the first thing that I did was to electrify everything!
I cite this personal anecdote only to stress and underline that the Irish experience of development is recent, relevant and may be applicable to any country that is embarking on the same path.
Globalisation - The Challenge and Potential
Ireland has come a long way from the days of mass unemployment and mass emigration. And the truly historic achievement of ending these twin repetitive blights upon our society deserves to be savoured by our people.
But, economic success can never be taken for granted and the major challenge for Ireland now is to ensure the sustainability in the global market of our strong economic performance. We will do this by maintaining a climate conducive to investment and job creation. The Government has already identified a number of key areas for attention in this regard. Ambitious strategies are being developed. New commercial links and partnerships are being forged.
In our time, the rapid advances in technology mean that distance is increasingly being removed as an impediment to trade. And there are increased opportunities for all communities to derive mutual benefit through constructive exchanges across the whole spectrum of economic, social, scientific and political life.
I believe that, if used wisely, relations between countries can be re-invigorated through this increased process of globalisation and taken to new levels of vitality and growth.
Saudi Arabia has become one of the most modern and dynamic economies in this region. It is the destination of around €300 million of Irish exports each year and Irish business people have watched closely the strong growth in Saudi banking, telecom, engineering and construction. We have seen the strategic plans of your government to implement vast infrastructure projects over the next years and attract foreign investments that will diversify your economy. Gulf Air now operates a direct link to Ireland and the Irish airline Aer Lingus will fly to the Gulf from next March.
But one of the most significant links between our two countries does not appear in any trade statistics. There are around 1,500 Irish people living and working in the Kingdom who are employed in a wide range of jobs – doctors, nurses, bankers, engineers, economists, teachers, computer professionals, farm managers and many others. They contribute not only to the Saudi economy but, in their daily interaction with their Saudi contacts, to a deepening of the understanding between our two peoples - ambassadors for Ireland in Saudi Arabia, ambassadors for Saudi Arabia in Ireland.
Today, in 2006, there is unlimited potential for Saudi Arabia and Ireland to learn from each other, and extensive opportunities for the mutual enrichment and the betterment of our peoples. Already, we have seen our cooperation deliver immense rewards in the Agricultural, Dairy Processing and Food Processing areas through the establishment of the Al Marai Dairy Farm by my fellow countyman Alastair McGuckian in the 1970’s. That initial project has since been developed and transformed into the largest integrated dairy operation in the world. And there are many other areas where such constructive cooperation is possible.
Ireland is recognised as a world leader in promoting inward investment and in devising practical, organisational and financial supports for overseas companies. And we have the hands-on experience and knowledge to help other countries develop a similar approach.
Often, countries have the financial capital necessary to develop, but they need assistance with diversification and with management skills – something we have already learned and developed.
Ireland has also become adept at investment and financial funds management and Irish companies have accumulated a wide ranging consultancy expertise, which has helped implement projects in the four corners of the world.
One example of this has been the development of Special Economic Zones to facilitate and encourage exports. Drawing on the experience of Ireland’s Shannon Free Zone, with its well proven success of attracting global leaders across industry sectors, we have advised countries from the Middle East to Asia on the concept and development of Special Zones as generators of economic activity.
Other areas where a specific Irish brand has been successfully adapted by Irish companies to different geographical regions include Duty Free Shopping Complexes at International Airports, Health Complexes comprising teaching Universities and Hospitals, Food Related Industries, Tourism Schools and Education, Information Technology and Telecommunications, Engineering and Construction and Thoroughbred Horse Breeding.
The Human Dimension – Ever at the Heart of Progress
Ireland does not have an unfailing recipe for economic progress but the experience we have gained on the path towards economic development has taught us some valuable lessons and opened our eyes to some important truths for the future.
We learned – the hard way - that avoidance of change and an inward-looking approach could not protect employment or living standards and we have come to see the importance of openness to new approaches and methods in stimulating creativity and economic growth.
We have learned that economic success and social inclusiveness are inextricably linked and we have come to see that in today’s global world we cannot compete effectively unless we maximize educational opportunity and labour force participation for all our citizens.
We have learned that, as always, it is the human spark of imagination, ingenuity and innovation which, when given room and encouragement to grow and develop, can deliver the richest rewards not just at the level of the individual but more widely for the benefit of society in general.
But it would serve us all well to remember that this is a journey only begun, not a journey completed; that wealth and development should be a means to a long desired end and not the end in itself; and that our ambition should be to complete the journey to a true social order, where no life is wasted, no life is marginalised and where each and every life is given a chance to blossom and to achieve its full potential. That is and should be our most important gift to our children and to future generations, so that indeed as everybody grows, everybody wins.
Shukran jazilan. Thank you very much.