Bertie leads a high-level delegation to India with an eye on the future

MANY of the end of year reviews are extremely positive about the fact that the Irish economy has enjoyed another 12 months of success.

Indeed it has perhaps been this country's most economically successful year ever. The overwhelming majority of those living in this country are better off than they were this time last year. Ireland has again enjoyed a strong economic growth rate. Our inflation rates and interest rates have remained low. Our unemployment rate is relatively negligible. Tens of thousands more people are working in Ireland at the end of this year than there were 12 months ago. Thousands more have achieved third level education.

Some time in the future, the doomsayers who specialise in predicting what they say is the imminent onset of economic recession may be proven right but it didn't happen last year. It won't be 2006 and it is unlikely to happen for some years to come.

Ireland of course cannot rest on its economic laurels. Sustaining our economic growth, and insulating it from any further international shocks, requires strategic economic management and the exploitation of new economic opportunities. Investing in infrastructure, of which there has been much in 2005, has to be part of that strategic economic planning.

Central too will be even further improvement in educational attainment in this country. Investment in education has paid large dividends in delivering economic success in the last two decades and investing even further in fourth level education and related scientific research is a prerequisite to sustaining our economic success in a global economy which is changing at an unprecedented pace. Another medium term objective has to be to position ourselves to capture at least a proportionate share of the world's new and emerging markets. Strategic engagement with Asia and particularly with the rising economies of China and India is another requirement for Ireland's ongoing economic advancement.

There is, thankfully, a large political and business consensus in Ireland about these broad medium term economic priorities. That is why all our political parties, and indeed social partners are likely to be supportive of the fact that about one third of our cabinet will be out of the country for a week in January.

Last January the Taoiseach led a delegation of no fewer than five cabinet members on a three-city tour of China. In a few weeks he will again be on his long haul travels this time to India, the second most significant Asian economic player and a rising world economic power.

This time too the Taoiseach will bring a team of ministers with him in the persons of Enterprise, Trade and Employment Minister, Mícheál Martin; the Minister for Education, Mary Hanafin and Arts, Culture and Tourism Minister, John O'Donoghue. The four Cabinet members are leading what is expected to be a 190-strong delegation of Irish business people who are already doing or are hoping to do serious business in this rapidly-expanding economy.

Again the delegation will travel to three cities and, with activity levels typical of Bertie Ahern, will do so in five days from January 15 to 20.

They will travel to Bangalore, New Delhi and Mumbai. As well as an intensive programme of political meetings and courtesy calls and a series of bilateral exchanges relevant to their various departments, the Taoiseach and his ministers will also attend a series of business network lunches in each city.

The presence of this large high-level Irish delegation ought to attract more significant attendees from the local Indian business community who will be targeted for business matchmaking by the entourage of touting Irish firms. The Taoiseach and his ministers have also let it be known that they will make themselves available to witness what they hope will be many significant business deals between Irish and Indian enterprises over the course of the five days.

NOBODY will begrudge Bertie and his ministers their absence from our shores for these five important days. India has been undergoing something of an economic transformation. Starting in 1991, successive Indian governments have adopted a policy of liberalisation of trade and of dismantling barriers and restrictions to investment. These policies have also seen the integration of India into the global market through the World Trade Organisation.

Last year the Taoiseach and his team witnessed the phenomenon that is the Chinese economic transformation. This year in India they will witness economic transformation on a relatively smaller scale but globally significant none the less. China of course has a much greater population but India has advantages China doesn't have.

India has long had an established western-style democracy. The Indian political system, like our own, is based on the British model although, interestingly, when it attained independence, India also adopted some of the innovations to that system which De Valera had put into our constitution.

The rule of law is strong in India; it has a muscular and independent judicial system and a free press all of which create a more predictable environment for domestic Indian economic activity and of course the stability to attract large-scale foreign investment. India also enjoys a significant linguistic advantage over other economies in that English is the primary language of business, commerce and administration.

In a manner somewhat similar to our own experience although of course on a wholly different scale India has also developed a large reservoir of educated, skilled manpower. India, for example, is creating 400,000 engineering graduates a year.

India has a population of more that a billion people and is fast on its way to becoming a major economic power. Only China is outpacing her in economic development. India's share of world GDP is expected to almost double from 6% to 11% within the next two decades. Its growth rate was almost 7% in the last financial year and it has sustained similar rates for more than a decade. There is poverty and great disparities but there is also a growing middle class, estimated at over 300 million people and increasing at an accelerating rate.

While China's emphasis has been, at least initially, on manufacturing, India is rapidly becoming the world's service provider.

This combination of English and education has been a particular advantage to India's rapidly-growing information technology sector and the related area of IT-enabled service industry, which experienced a phenomenal 32.5% growth rate in 2005.

While of course these create competitive challenges for Irish software and IT service industry, one way to meet this challenge is by tapping into the potential to outsource IT services to India, thereby sustaining their own position in the global market.

Bertie Ahern and his ministers are unlikely in the short term to derive much political benefit from giving over a week of the parliamentary recess to these Asian travels.

But the type of strategic engagement represented by their visit to this key global player will pay dividends for decades.