‘Lack of competitiveness needs to be addressed’

FINANCE Minister Brian Cowen says restoring competitiveness and increasing exports are the only way the economy can continue growing.

Addressing the Leinster Society of Chartered Accountants yesterday, Minister Cowen said the economy could not rely on residential construction to drive it forward and future growth rests with the country’s share of international trade.

“Our relative export performance in recent years suggests that our ability to do this has been compromised somewhat. While there has been some improvement this year, the rate of merchandise export growth will nevertheless remain below growth in our relevant export markets, implying a further loss in our international market share,” he said.

Mr Cowen attributed the loss of market share to the loss of competitiveness with our trading partners and said this would have to be addressed.

“The rapid integration of labour-abundant, low-wage regions into the global marketplace means that we simply cannot compete in the production of low value-added goods and services.

“Instead, we must continue to reposition the economy in the production of knowledge-intensive goods and services.”

But just a week after Government ministers and senior servants were awarded huge pay increases he also warned that the days of pay rises without improvements in productivity for the public sector were over.

“Payment of any pay increases in the public service is contingent on co-operation with a robust agenda of measures to improve the effectiveness, efficiency and user friendliness of our public services,” he said.

The Government expects the economy to grow by 4.75% this year, but slow to 3.5% over the next three years. The slowdown in economic growth will have implications on Government spending.

Minister Cowen said the Government had made significant amounts of resources available in recent years and the need for “very significant increases of the already high level of public expenditure is no longer warranted”.