We can revert to growth more quickly if we stick together

 

OPINION: After thanking his hosts at Thursday’s Dublin Chamber dinner, the Taoiseach called on everyone to pull together to get Ireland through the economic crisis. This is what he said.

I DIDN’T believe in writing a script or looking down for the evening. I want to look at everyone in the eye and say a few things. First of all I want to say that I very much appreciate the role that the chamber, not just Dublin Chamber – but chambers of commerce throughout the country – play, in building up the business culture that’s brought such success and much employment, much investment, much progress throughout the country.

And this capital can be very proud, I think, of its business community, not just in recent times but down the years. Particularly in recent times when we’ve seen a tremendous progress in this city in a whole range of areas.

The improvement that we’ve seen has been down to the efforts and the ingenuity of the business community and a very committed workforce. And I think that it’s important to say that in these more difficult times what has been very pleasant to see, in my opinion, has been the ability of businesses, managements and workforces, staff and workers to sit down and decide in what way people are going to survive together through this difficult period – rather than the easy option of simply some lay-offs and people being kept on.

People are sitting down, I know, and saying how can we all share this burden of adjustment? And the leadership that’s been provided from the top, and the leadership that’s been provided on the floors of factories and enterprises throughout this city and throughout the country, reinforces in me a belief that we will come through this problem together. That we will overcome the difficulties, that we won’t succumb to a sense of defeatism and bleakness that has perhaps been the mass-mediated message for too long without a balanced perspective on the real efforts that are being made. The real successes that continue to be enjoyed by many in what is a far more difficult trading environment than before.

Because what we’ve built up in this country is a very professionalised business community who have, and who continue to, forge ahead both at home and abroad. There are particular difficulties, a confluence of events which have come together that have exacerbated a situation that would represent a mounting challenge in any event.

The question of a world recession, not just a recession in the UK or perhaps a recession in Europe or at some other occasion in Asia or in the United States, but a global recession which has occurred because of a crisis of confidence, investor confidence, consumer confidence, and a crisis of confidence in the financial structures, in the financial system which has provided the means by which a functioning market economy has forged ahead with unprecedented growth worldwide for the last decade and more.

That has brought a level of difficulty when allied to that, for our country the appreciation of the euro vis-a-vis sterling, particularly for the indigenous sector, for the small and medium-sized enterprises whose main port of call in terms of export destination is the UK – that is further exacerbating a difficult situation.

So all of that can be said, all that can be analysed, all of that can be understood. And if I may make one comment about the social partnership process, whilst we didn’t come to full agreement on every detail, there was, and is, an understanding of the scale of the problem. There was, and is, an understanding that our public finances must be brought under control.

There was an agreement that as an initial step, as has been said, as a signal to try and bring about greater internal confidence both at home and external confidence from abroad, that a €2 billion adjustment was needed. And whilst we didn’t agree the detail, I think it was time well spent.

And there are some who talk about leadership, by the way, as if you get up in a vacuum and you decide to govern by fiat. I don’t think in a modern society, certainly not the one that thankfully we’ve built up in recent years, that that is the best way to lead.

The best way to lead is to sit down with the partners and stakeholders, not on the basis that there will be painstaking analysis without decision, but that there will be analysis and there will be discussion, that there will be a sharing of perspectives, and that ultimately then, those who have the responsibilities to make the decisions in respective sectors or in their respective jobs, make those decisions, in the creation of an atmosphere of mutual respect and perhaps ultimately policy difference or decision difference, but certainly one that can enable us to continue to relate to each other on the basis that without working together, we put at risk the ability to implement successfully a recovery programme.

So whilst people talk about setbacks or some might like to think, the end of partnership existence in Ireland, I don’t believe so. And when you think about it, the rate of change and innovation that’s going to be required for us to meet this challenge will require the co-operation of everybody in this society and particularly everyone in the workplace, if we are to make sure that we can create the wealth again, that we can engender the productivity increases that will be required for us to stay in the game.

And I know that there are many people who are finding it difficult to stay in the game as things stand, that we’ve gone from a position of unknown prosperity to, suddenly, the survival stakes. And that that turnaround and the need for the system to flip into that sort of gear quickly is what is required if we are to build the confidence in each other’s ability to help and facilitate the building of an environment that enables us to get back on track as soon as possible.

And so therefore I decided that I would use that month of January for that purpose and I’m glad I did. But I don’t believe for a moment that the idea that that is in some sense a prevarication or an abdication of responsibility.

I just don’t accept that as being the way things are.

I BELIEVE in talking to people, working with people, making the decisions but getting on, on the basis that we must work together, even if we can’t have an unanimous agreement on every facet of policy, we must work together. Because without working together, we will not get through this, such is the scale of the challenge we face, and I firmly believe that.

And I believe you – in your job as business people, working your businesses, working your networks, keeping your customer base going, keeping the morale of your employees up – do precisely that, you work together.

There is a boss, there are people who have responsibilities, there are people who have to give the direction, but at the end of the day, you’ve got to work with people, and you’ve got to ensure that you appeal to their higher motives rather then deciding that there are some who are going to walk away from the process or not face up to their responsibilities. I believe we have a mature democracy in this country that has learnt enough from the good times as to how we’re going to manage the bad times – and I believe it is a problem-solving process, not a problem-avoidance mechanism.

I think what we’re seeing now, in the context of the fact that 36,000 people lost their jobs last month, is a need for that solidarity we’re seeing in the workplace, within enterprises, to face up to the challenge we face now. That is a way of working and that is a solidarity that must permeate everything that we do because the only way that we’re going to get over this is by trying to display a sense of fairness and proportionality.

That the burden of adjustment will be fairly squared off by everybody and those who are most able to bear it will have to bear a heavier burden. And that we do believe more than anything else in social cohesion, in keeping the sense of community, and people talked about

. . . back-to-basics banking. We’ve got to get back-to-basics living as well.

The hubris we saw in the past that decided we could do all this ourselves, that we weren’t part of a wider interconnected global marketplace or society, has come crashing down – and we now realise that that sort of arrogance has no place if Ireland is to forge ahead again.

Because we will have to work with partners, working as partners at home, working with partners in Europe and certainly in terms of maintaining financial stability, we must recognise the solidarity of the European Union and the mechanisms that it provides for us, have ensured that we can in fact chart a way forward to financial stability with some degree of confidence and hope than would be the case were we, unfortunately, like the people of Iceland, who had to contend on their own with the consequences that followed.

And perhaps we’d think of that when we put the Lisbon Treaty again the second time because our economic and political destiny is lined up in the European Union, for all it’s faults. And perhaps too much [at] times, the argument is about the Europhiles against the Eurosceptics – rather than a balance-sheet approach that said yes, there are some things that are good about the union, there are some things that frustrate and annoy us about the union.

But there is one thing for sure, that if Ireland is to prosper, Ireland must be an integral part of that organisation and that our destiny is totally and utterly linked up with that – not only as a marketplace, but in terms of investment strategy, which has brought so much investment: five times more to Ireland than any other OECD country of foreign direct investment. That has provided us with many of the jobs and you with many of the sub-supply opportunities into those sectors, that has provided us [with] unprecedented employment growth over the past 10 years.

Yes, we will lose jobs and I don’t say that in any complacent way because behind every statistic is a family whose concerns are increased.

I COME from a part of the country that has seen unemployment, endemic unemployment for many years in the past when other parts of the country were picking up. But I make this point: that unless we’re prepared to say that we, as a country, are prepared to step back a few places now, that we take a drop in our standards of living – yes, of 10 or 12 per cent over the next couple of years – in the perspective of a country that has increased its wealth so much over the last 10 years by 70 per cent and 80 per cent . . .

Yes, it’s a step back. But we are in a far better position than previous generations had to contend with, with less opportunity, and is it the case now that the most successful generation we’ve seen in this country will find itself incapable of maintaining that community cohesion that is a prerequisite to success in the years ahead, as was the case in the past, which was the real characteristic of why the Irish way of life was a good one, and a valued one, and a worthwhile one.

I believe that we are citizens first and consumers next. And for many people like yourselves, yes, there is a crisis of consumer confidence; yes, there is a real worry about where this is all going to end; yes, how prolonged and acute will this recession be.

No one can give you a clear answer to some of these things because there are no certainties but the one thing we can say is this: that if we lose the belief in our own capacity to confront this issue, and to do whatever is necessary to avoid putting at risk that with which we have achieved so well and which we are rightly so proud in recent times, then perhaps we didn’t deserve the success we enjoyed in the first place.

Because we owe it to the next generation. We have had some good times, we have had some better times than previous generations and perhaps the next, because the profound change that’s happening in the global economy means we won’t revert to the high rates of growth we saw in the past.

But we can revert to growth more quickly if we stick together as a community, if we keep believing in ourselves that we will get over this problem, not out of some blind faith but out of a clearer strategic direction that takes short-term initiatives to help, in labour market terms, those who are losing their jobs in terms of training and reskilling, but also identifying those vulnerable sectors before the jobs are lost and trying to redirect monies which will have to go on social welfare more quickly to those areas.

Because jobs, jobs, jobs, has to be the priority in the coming years – and that we devise short-term initiatives that are still in line with and confident with the longer-term strategy of building a smart economy. It is not counter-intuitive to think that we have people, because we’ve invested so heavily in education and research and development, that suddenly we’ve run out of ideas because of the recession, that suddenly we cannot commercialise those ideas because of a recession or that suddenly we have lost our entrepreneurial can-do spirit that has brought us to the rate of scope and development we enjoy today.

We have got to continue to believe in ourselves and we’ve got to let young people continue to find an ecosystem here in Ireland that will let them start up businesses and let Frank Ryan and Hugh Cooney and others in Enterprise Ireland get ahead with what they’re doing.

And I’ve been in other markets, I’ve been to other countries representing Ireland, bringing business delegations – and we are succeeding – and when you talk to those people, some of them young, some of them experienced, the one thing that characterises their success, is their self-belief. And if we decide to wallow in a sea of doubt, let us not be surprised if we remain in the turbulent waters we’re in today.

So let’s as a community, and let you as business leaders, and us as political leaders, and others as voluntary leaders in community, every one of us, trade unions and employers, work now to make sure that we get through this problem. That we manage our way through it.

We have work to do, I recognise that, and I’ve said to the system of Government it’s not an incremental change we need to see. We need to flip right across now to face into what we’re now confronting, which is a totally different problem than the developmental aspect of policy that is the assumption in all our programmes up to now, because of the idea and the reality that we could fund many of our programmes through unprecedented and unbroken growth as we have in the past.

We’re in recession, we’re staying in recession this year and possibly next but we can put in the building blocks of competitiveness today.

Yes, I have said we will go and reduce electricity prices and I’ve told the Minister to get on to the regulatory system and make sure it happens because it is a crucial issue for us.

Yes, we have got to cut our costs, including our labour costs.

Yes, we’ve got to try and contain costs everywhere we can.

But we’ve also got to ensure that we continue to invest in those things that have brought us to where we are today: infrastructure and innovation, education and investment, research and development and the creation of the smart economy.

The ability to increase productivity, not just incrementally but exponentially, so that we are in a position when the upturn comes to get back to growth rates – in growth and employment, particularly – which will be crucial to our future and to the next generation coming forward.

So, okay. We’re in this. It’s difficult. It may even get more difficult. And there will be people every day and every week saying “Isn’t this terrible?” and “Isn’t that terrible?” And it is.

But at the end of the day, I want to say that as far as I’m concerned, the leadership that I want to provide is a leadership that is cohesive, it’s a leadership that is rational but it’s also a leadership that is determined to get us through this problem, and when we do, to look back on it and be proud of the fact that we’ve pulled together when things tightened and when the strain came on our backs.