Ahern stresses partnership is critical

THE importance of social partnership to the Irish economy and a successful outcome to the Sustaining Progress agreement were stressed yesterday by Taoiseach Bertie Ahern.

Addressing some of the country's top business leaders at the IMI annual conference, he said social partnership was sometimes presented by its critics as a cosy consensus.

"Sadly, for its practitioners, it isn't. The social partnership progress requires a major investment of time and effort; hard choices have to be faced; and strong leadership is required on all sides," he said.

"It is, of course, easy to knock social partnership although opponents often seem a little shy about disclosing their alternative. The fact is, however, that social partnership has a track record of delivering not perfection, which was never claimed by its proponents but tangible results all the same. And it remains more likely to deliver positive results than any free-for-all alternative," he added.

The new pay talks in relation to the second half of the Sustaining Progress agreement, he said was perhaps one of the most important challenges facing the country.

And he later expressed confidence that SIPTU would take part in the talks over the coming weeks.

But he stressed that he was not in favour of "a race to the bottom" in relation to labour costs.

"Maintaining labour cost competitiveness today is as important to keeping jobs as it was to creating them in the first place. If we price ourselves out of the marketplace, we will lose jobs," he warned.

"Unfortunately, there is clear evidence that, far from maintaining labour cost competitiveness, we are losing it. It is estimated that unit labour costs rose last year by 4.3% and that they will rise by 2.2% this year, compared to just over 2% and 1%, respectively, in the eurozone."

"These are the realities that should condition all of us private and public sector employers and trade unions alike in our approach to the pay talks. At the end of the day, jobs are the lifeblood of this nation, providing the wherewithal for investment in our people and their future," he said.

Taoiseach Bertie Ahern also warned employers and workers not to become complacent, even though the Irish economy was back on track "things in Ireland are definitely looking up," he said pointing to the stream of encouraging economic statistics released recently including the fall in the annual rate of inflation to 1.3%, its lowest in five years, and the 1.8% growth in employment last year.

And he said the Exchequer returns to the end of March indicated that the Government was on course to meet its public finance targets for 2004.

"Another good omen is the outcome of the Small Firms Association's tenth National Employment Survey. That showed that the mindset of small business for 2004 is firmly fixed on investment and expansion, with projected new jobs up to over 36,000 compared to less than half that last year," he said.

And he highlighted the exporting opportunities of the emerging markets, particularly India and China.

Per capita, Ireland, he said was the biggest and fastest growing exporter of services. With respect to foreign direct investment (FDI) he said Ireland had the second highest level of FDI after Hong Kong.