Harney intends to spread good cheer in the New Year


In theory, the Irish public should by now have trouble distinguishing Mary Harney from a Santa Claus for all seasons. Not one month passed this year without news of another investment triumph; in 1998 alone, as Minister for Enterprise and Employment, she has overseen the creation of 24,000 State-backed jobs.

The trouble is that when a factory closes, Ms Harney also shoulders some of the blame - and that people who lose their jobs in Donegal or Clonmel are often not the same ones being hired in Dublin or Cork.

But for all the late-night crisis meetings, she reiterates that in the history of the State, there has never been as bountiful a period for job creation.

There are two things happening. There is net immigration - 44,000 people returned last year - in stark contrast to the 1980s when 6 per cent of the population emigrated, she says.

Despite this, the unemployment rate has fallen rapidly. At 8 per cent, it stands at half the figure of five years ago.

"There has been quite dramatic growth in the labour force - it is growing at twice the European average," she says. "All of this is spectacular from an Irish point of view, but we can't stand still, we have to be conscious of our competitiveness."

The Republic's industrial strategy has changed, she says, and is now focused on high-value manufacturing and services rather than labour-intensive factories.

"We would never now, for example, be going after Fruit of the Loom if they hadn't been here, because clearly in assembly work and a lot of manufacturing we can't compete with low-cost economies. We have to go for areas where we offer competitive advantage and that generally tends to be up the value chain," she says.

Most new jobs now come not from new companies but from firms already established here upgrading their facilities, she adds.

"One of the things I'm very keen to do is to ensure that the foreign companies that we have here deepen their roots in Ireland so that they are solidly based here. And one of the ways of encouraging that is if they bring research and development facilities into Ireland. A huge investment always goes into R&D, and generally products are made close to where they are researched and developed," Ms Harney says.

The next few years will also see far greater emphasis on industrial development outside the Dublin area, but not necessarily through massive-scale projects.

"We want a larger number of smaller projects into the regions rather than isolated big projects like Fruit of the Loom or Seagate in Clonmel. Because when those industries are in difficulty and they have to do what Fruit of the Loom has done, the devastation is just enormous, and it's very hard for a small area to sustain it. Areas become too dependent on one single sector," she says.

She argues that the current concentration of investment in Dublin is bad for the city because it puts enormous strain on schools, hospitals, roads, house prices and even the taxi service. At the Cabinet table, Ms Harney has argued strongly for investment in the infrastructure needed to bring regions up to scratch.

"Recently we had people with the IDA in Donegal and we had to take them by helicopter there. You can't expect someone who comes from either somewhere on mainland Europe or from the United States who spends a couple of hours getting here by plane to then sit into the car for five hours - they just won't do that," she says.

"We need to develop our infrastructure right across the country. Now that we're generating the kind of resources we are (generating), it is as important as paying the national debt. I think through private-public partnerships we can explore new opportunities," she says.

Donegal and other Border areas, she adds, will benefit from the peace process, integrating their economies with those of neighbouring counties in Northern Ireland and routing much of their exports through the port of Larne rather than Dublin.

Another worry for her is the obvious skills shortage in some sectors. The issue could be partly addressed, she says, by a more open immigration policy, granting work permits to a greater number of non-EU nationals.

But retraining remains central to the question, she adds.

"The big issue for the economy in terms of skills is to ensure that companies invest more in human resource development, in-company training and external training of their workforce, Ms Harney says.

For the unemployed, she preaches tough love, and targeted training. Around 40 per cent of people under 25 who are on the dole sign off when asked to come for an interview. The programme will be extended in the new year to the over-25s.

"Part of the idea is to get down to the hard core of unemployed people who really need the resources. We spend about £1 billion on welfare-to-work and various training programmes, and we want to make sure it's going to the people that really need it," she says.

But for some, she reluctantly admits, retraining is not a realistic option: "We left it too late - they've been unemployed for too long. That's the awful tragedy of it."