Address of An Tánaiste At the OSCE Economic Seminar on Stimulating Foreign and Domestic Investments

Welcome Address of An Tánaiste and Minister for Enterprise, Trade and Employment, Mary Harney, T.D. At the OSCE Economic Seminar on Stimulating Foreign and Domestic Investments Dublin Castle Conference Centre 16^th -17th February 2004

On behalf of the Irish Government I would like to welcome you to Dublin and to the Second Preparatory Seminar for this year's OSCE Economic Forum.

I particularly welcome Mr. Lubomir Ivanov, Deputy Minister of Foreign Affairs of Bulgaria, representing the Bulgarian Chair-in-Office of the OSCE. The Bulgarian government knows that it has Ireland's and the EU's fullest support in its important responsibilities as Chair of the OSCE in 2004.

I would also especially like to welcome my counterpart as Deputy Prime Minister of the Kyrgyz Republic, Mr. Djoomart Otorbaev.

I am very pleased to welcome the Economic Coordinator of the OSCE, Mr. Swiecicki and all his team to Ireland.

And above all, I warmly welcome all of the delegations who have travelled to this important meeting this morning from United States, Canada, Central Asia and from all over the European region.

This is the first time an OSCE meeting has been held in Ireland. I am very pleased that this Seminar coincides with Ireland's Presidency of the European Union. It gives us an opportunity to demonstrate in a practical way both Ireland's support, and the European Union's support, for the OSCE and its important work.

Our goal for our new neighbourhood

Ireland has always based its foreign policy on the principles of the rule of law and a multilateral approach to security, economic and political issues. We have always been strong supporters of the United Nations. For the same reason we support the work of the OSCE as being crucial to extending stability, prosperity and freedom in the OSCE neighbour hood.

I know that the OSCE has recently held an important Ministerial meeting in Maastricht at which important new policy documents were agreed - including for the OSCE's Economic work. The European Union looks forward to the implementation of those polices in 2004. We attach particular importance to pressing ahead with the work to promote good governance and economic reform as essential factors in economic development. We also have to press ahead to implement the Action plans on Trafficking in Human Beings, so that we can redouble our efforts to combat what essentially is the modern form of human slavery.

As EU Presidency, and OSCE participating State, we recognise the need for greater and better international cooperation if we want our shared neighbourhood to be an area of freedom, democracy, prosperity and security. This is our goal within the European Union, before and after the accession date on May 1^st, when ten new Member States join the Union. It is also the goal which drives our Presidency in terms of the EU's external relations policy.

May 1^st, will be the highlight of Ireland's Presidency of the EU. It will be an historic event that dovetails very well with the goals and the work of the OSCE on a continental level. It will contribute to greater stability, prosperity and freedom in the whole of Europe and in neighbouring regions. It certainly has nothing to do with creating a so-called `fortress Europe', or new dividing lines, of `ins' and `outs' on the European continent.

Any fair examination of the EU's external relations, both political and economic, will show that we are fully engaged in working towards our shared goals of security, prosperity and freedom across our whole region. And with accession, that work will be all the more relevant to all of us.

Migration flows

Some recent media attention on the accession of the ten new Member States has focused almost exclusively on the question of the migration of peoples from economically-deprived areas in south-eastern Europe to wealthier countries in the EU. This has been painted in negative and threatening terms.

There has been an attempt to stir up fears and anxieties about waves of poor immigrants taking welfare and jobs in wealthy countries.

Ireland and, I am confident, other EU Member States, intend to manage any potential new migration in a way that is consistent with our obligations, and rights, under European Union and international law.

But more importantly, we will be addressing this issue consistent with our overall vision of what economic development and solidarity means for all of Europe.

Our commitment to economic development and solidarity is most of all about lifting standards of living and prosperity for people in their home countries.

All the evidence, and all our experience, tells us that this is what people most want.

Easier migration and labour market access in wealthy countries can never be as powerful for meeting human needs as strong, well-grounded economic, political and social development in people's home countries.

I think that this is an approach which is very much in line with OSCE thinking on how political, economic and human security are all interlinked. We certainly believe that real and sustainable solutions will only come from integrated policies and co-operation built on freedom, human rights, the rule of law and good Governance. This certainly influences our approach to this issue at national and international level.

Like all States, Ireland will deal with migration and security issues. But we will not be doing so outside the context of the bigger picture of how we intend to promote and achieve economic prosperity and security for the whole continent. Nor will we lose sight of the need to strengthen co-operation and solidarity with our neighbours, near and far.

Ireland's experience

Ireland's experience in the European Union over the last thirty years bears this out. Good governance and a rock solid commitment to democracy and the rule of law was the basis for our EU membership. We have received tremendous support from the EU in structural funds, cohesion funds and agriculture payments. At the same time, for many years, we did not get the domestic conditions right to maximise the value of this support.

We lost control of public finances in the 1980s. Investment conditions were poor. The incentives for work, risk-taking and innovation were smothered. We were not sufficiently open and competitive.

As a result, emigration featured to a large degree in our country in the 1980s.

But we came to a political turning point and a determination that we could not, and should not; build our economic development on the basis of a permanent safety valve of emigration.

The cost of involuntary emigration was very high, socially and economically. It was unsustainable. And our experience was that, when we started developing better economic conditions at home, many Irish people returned to Ireland.

Role of Foreign Direct Investment

This is where the role of foreign direct investment has been very important.

Foreign direct investment, by itself, was not the solution, just as transfers from the EU were not the solution on their own.

By creating the conditions in which foreign direct investment would flourish, we were creating the conditions where domestic enterprise, investment and initiative could also flourish.

We developed a strong public service. We stood by our constitutional principles and upheld the rule of law. We worked to resolve the conflict in Northern Ireland by peaceful means. We invested in education. We lowered taxes radically. We made national agreements with trade unions and employers on wages and economic policy. And yes, we competed vigorously for foreign direct investment.

We became more open, more attuned to international markets, more willing to adapt.

The most important thing we have learnt over the years is that a radical divide between the domestic and the international sectors in an economy won't work. What is good for investment works irrespective of the nationality of the owners of capital.

We see our job now as to create an economic environment where ideas can be turned into products and services that deliver high economic returns.

As we have sought to attract and to generate investments with higher value added, we have seen that the issues around people, research and innovation, and our legal and physical infrastructure are more and more important.

We are clear that a country like Ireland has to focus on certain types of investment. We are not trying to do everything. As part of your programme you will visit the Dublin docklands area where we have developed a thriving international financial centre. Many aspects of policy had to be brought together to achieve this - tax, regulation, law, and investment promotion. Government and industry worked together. And most of all we needed good people to make it work. It is a success for Ireland and for European Union too.

In this way, we see a European economy that contains a great many diverse clusters of special competitive advantage, with policy tuned at national and regional level to foster those clusters.

This is why we see the economic development of EU accession states and OSCE states positively for both Ireland and the European Union. The flows of trade and investment work in both directions.

There is tremendous scope in the years ahead for increased investment and trade within the OSCE region. We look forward to working together in the OSCE to help develop the conditions where investment can flourish to the benefit of us all.

If we can work together to support democracy and the rule of law, leading to increased levels of trade and investment, we could see the creation of zone of peace, prosperity and freedom in the OSCE region, which would realise the founding vision of the OSCE as set out in the Helsinki final act.

I am very pleased that Dublin can host your seminar and a meeting of the OSCE for the first time. And I wish you every success for the full OSCE Economic Forum later this year.

ENDS/ETE 1189