Official policy retarding export growth

THE general review and outlook for 1995/96 of the Irish Traded Board, issued last week, presented the Trade Minister, Mr Enda Kenny, with an opportunity to engage in trench warfare and lecture the long suffering exporters on what they must do to be saved.

The Minister's press release said that the business community must respond better to An Bord Trachtala's promptings and instanced the substantial investment made annually by the Government in the trade promotion task.

While no one doubts the Minister's genuine commitment to his responsibilities, he is giving the impression that exporters are there to keep the well oiled apparatus of State exercised and ar somehow failing to do so.

The trade promotion agency surely exists to service the needs of exporters and its programmes and deployment of resources should respond to market needs - which, in this case, means the demands of exporters. If the Irish Trade Board's services are not in greater demand by exporters, one possible explanation is the ridiculous system of, marketplace service charges which the board imposes on exporters who wish to tap into their network.

This network is already funded by the taxpayers of Ireland and the European Union. Furthermore, UK dependent porters are reporting difficulties in securing from the board financial incentives for market development in the UK, presumably as a result of policies laid down by the Minister's department.

The analysis of the performance of exports presented at the Minister's conference throws into relief the impact of the weakener values over the last couple of years, from the indigenous the UK grew by 5.8 per cent in 1995, while the sector ports to mainland Europe showed a 17.3 per cent increase.

What would happen if sterling drifted out to 1.08 to the Irish pound or 1.10 as recently conjectured is, of course, another hard question.

Can any help be expected from Government. The advice of Ministers is to bear up, to seek cost reductions and to diversify into other markets. The real help sought by exporters is not the creation of support funds, which is the equivalent of applying band aid to a broken leg, but reductions in costs imposed by the Government, mainly payroll taxes.

These put our costs way out of line while our competitors in the UK, whether we meet them in that market or the home market. The relief from fiscal oppression introduced in the Budget was derisory as he Government found itself trussed up the high spending ministries. That continues to be a major determinant of our international competitiveness.

The overseas network of offices provided by the trade promotion agency, almost exclusively for indigenous exporters, apart from the food sector (as the Minister pointed out), is certainly extensive and, one suspects from earlier comments, not all are used to the same extent.

But who decided on this development of resources? Exporters were not consulted, either individually or through their representative organisation. The lack of real communication between the Government and the private sector in this country is truly remarkable and must be addressed (sooner rather than later.

Meanwhile, the Government seems happy to bask in the reflected glory of our export performance and our favour(able economic statistics, even if that means that we are exporting jobs.

The last word, for the moment, may be left to the World Competitiveness Report which ranked 48 countries on economic performance earlier this year. Ireland slipped three places in one year, going from 19 to 22, with our critical weakness being our "punishingly high taxes". Maybe the Government should be looking into its own heart.