Obama advisor warns Irish of dependency

Wednesday, November 05, 2008 - 03:39 PM

Senior economic advisor to new US president Barack Obama, Dr Robert Shapiro, has said this country ‘must wean itself from dependence on foreign direct investment’ (FDI).

His comments in Dublin yesterday will have sent shock waves throughout the IDA which is ready to send a high-powered delegation to the US to lobby against the idea.

FDI has been a huge plank of economic success in this country with US-owned firms alone employing 100,000 workers in 500 firms here.

The comments of Dr Shapiro, a former US Under-Secretary of Commerce for Economic Affairs, were being studied by IDA bosses today.

Speaking at UCD Business Schools, Dr Shapiro said: “Ireland must wean itself from dependence on FDI. A low corporate taxation rate was not the most important factor moving forward."

"The next was not FDI but a series of policies that actively promoted spillovers from FDI corporations to Irish indigenous firms.

"The best way forward was for young Irish people to become entrepreneurs and force existing business to compete and become the best in the world.

"FDI was a transitional strategy, not an end-game strategy, that created a lasting impact.

"The key to Ireland’s next stage was to make the entire economy a modern economy and not one that depended on the success of foreign companies.

"The ability to develop ideas is the single most critical factor and source of wealth and growth for advanced economies today, replacing physical assets and this is what Ireland needed to focus on.

Article courtesy of The Evening Echo