Speech by Mary Harney, T.D., Deputy Prime Minister of Ireland to the Fifth Annual Conference to the World Association of Investment Promotion Agencies (WAIPA) Bangkok, Thailand, 10th February, 2000

Achieving adequate and rising living standards for the 4/5 of the world population who live in developing countries is the major challenge facing the world in the 21st Century. This can only be met if there is a significant increase in productive private sector investment in developing countries. The work of investment promotion agencies is central to bringing about such an increase in investment. Ireland has benefited enormously from the vigorous promotion of inward investment and it is for this reason that we have strongly supported WAIPA in its efforts to spread "best practice" among investment promotion agencies in developing countries.

Official development aid can help to support the preconditions for sustained economic and social development by assisting the development of human capital through health and education programmes and the development of infrastructure. However, it is only when significant levels of private sector investment, both indigenous and foreign, are generated that real living standards start to rise in a sustainable manner.

IDA Ireland has focused their resources on key target sectors e.g. in the software sector, and were able to achieve early mover advantage and a high market share through early aggressive marketing.

In doing this they were underpinned by a broad consensus in Ireland, that welcomes FDI and is committed to the policies necessary to attract it. As a result it could credibly promise that the favourable investment climate would be maintained regardless of changes in government. This was an enormous advantage because business people hate uncertainty. The type of serious long term investor that countries wish to attract requires long-term stability. While democracy may be messier at times in reaching decisions it does provide a much more solid basis for attracting the type of investment that will boost living standards on a sustainable basis. Also a liberal democracy that respects people's rights is more likely to foster the type of creativity which is fundamental to economic growth in the information age.