In his brief opening remarks to introduce Mr. Bertie Ahern, Ireland s Prime Minister, World Bank President James Wolfensohn noted Ireland has taken a constructive position on the issue of foreign aid, showing its leadership and commitment by donating 0.41 percent of its GDP and projecting it growth to rise to 0.7 percent.
Mr. Ahern noted his involvement with the World Bank is long standing, dating back to when during the 1990s he was the nation s Finance Minister. This past January, he was visited in Ireland by President Wolfensohn who had updated him on the World Bank s recent activities. Ahern stated his strong support of the World Bank s poverty reduction efforts through its emphasis on pro-poor growth based on good governance and sound economic management. He noted that Ireland s economic fortunes have changed dramatically over the last decade, though he acknowledge his wariness with any claims for a "one model fits all" approach, which he characterized as the Washington consensus . The Prime Minister said the problems faced by developing countries are unique, each requiring tailored solutions, and that contrary to the Washington consensus, there is no single magic formula. He implored the World Bank and International Monetary Fund to be wary of using developing countries as laboratories for testing economic theories, and called for increased emphasis on partnering by the World Bank as well as more country-ownership of sustainable development and poverty reduction initiatives. Ahern said "the best decisions are made when the voice of those most affected the decision is fully taken into account."
Mr. Ahern next addressed some of his country s recent development experiences. He noted that despite severe poverty for much of the 20th century, by the close of the century Ireland ranked among the world s 25 richest nations. He touched on some of the island s history including it s independence movement from Great Britain, and the Great Famine of the 1840s which has impacted the ethnicity of nations worldwide ever since. He compared the tragedy of the Great Famine, which he estimated caused a million deaths, to ongoing famines plaguing sub-Saharan Africa now, a plight exacerbated in part of the HIV/AIDS crisis. From the 1960s through 1990, Ireland s economic fortunes remained dour. Its unemployment was consistently among the highest in the European Union (EU). Growth was stagnant. By 1987, the national debt to GDP level had risen to almost 117 percent. IMF intervention seemed likely by some. The ongoing violence in Northern Ireland added to the difficulties.
By 2000, the pictured had changed dramatically. During the 1990s the national economy s growth rate averaged 7 percent, reaching 11 percent in 2000. Only China had similar growth during this period. Unemployment had dropped to the point that workers were needed from outside the country. Two-thirds of the nation s exports are now in high tech areas such a compute hardware, software and pharmaceuticals. Ahern said Ireland is currently the second largest software exporter in the world, and was now attracting 10 percent of all US investments into the EU. He called Ireland "the most globalized economy in the world with a unique dependence on, and capacity, to trade internationally."
The economic turnaround was precipitated by several factors. First, Mr. Ahern mentioned the peace process in Northern Ireland, and used the occasion to reiterate the ongoing commitment of his government to work with the British Government to implementing the framework for the Good Friday Agreement. The second component to Ireland s economic revival were investments in education starting in 1960s. In 1967, second-level education was made free and grants for third-level education soon followed. Investments were made in teacher training and curriculum development. In the intervening years, participation rates in third-level education rose from 4 percent to 26 percent, a rate Ahern said was among the highest in the world. He added that the Millennium Development Goal (MDG) of universal access to primary education by 2015 was a critical objective. He also commended the World Bank s work in the area of information technologies as a way of reducing poverty. The economic recovery was also fueled in the late 1980s through a series of national partnership agreements between the Government and a variety of stakeholders to support multi-annual programs covering fiscal policy, social welfare and other important economic areas.
Mr. Ahern characterized Ireland s 1973 entrance into the EU as an economic turning point. Its membership provided access to a regional market, economic development support from EU partners which included help for its rural economy. Trade increased 90-fold and foreign investment has reached $40 billion. He suggested the regional integration of Ireland into the European economy may provide useful insights and lessons for economic development for other regions such as Africa and the Caribbean. He noted that trade provided developing countries with significant economic opportunities, but cautioned that the Doha Ministerial Conference needed to be accompanied by better capacity building initiatives for these nations. Mr. Ahern said Foreign Direct Investments (FDI) have positively impacted Ireland s employment and exports. Employment, he said, has doubled in the last decade. He also made mention of the benefits created by free trading zones. A strong regional environment, investments in infrastructure and particularly in telecommunications, investments in education have all fueled the economic boom. He also noted the importance of promoting harmonization between multi-lateral and bi-lateral donors to reduce transaction costs for developing countries. He applauded the Bank s work in this area.
For the MDGs to be achieved, overseas assistance must be doubled, an increase of around $50 billion from current levels, Mr. Ahern said. Even still, this would pale in comparison of the monies spent annually on military arms. With Ireland foreign aid level at 0.41 percent of its GDP, Ahern reiterated his government s commitment to adhering to agreements made at the UN Millennium Summit in September, 2000. He then mentioned a quote from Bank President Wolfensohn that he recalled and thought worth mentioning now, that September 11th taught us there is no rich and poor world, but simply one world with many intricate links.
Mr. Ahern said two major challenges face the developing world today. First, the pandemic of HIV/AIDS. In some parts of Sub-Saharan Africa, he noted, more teachers are dying than are being trained. He also noted that these countries, with depleted economies, work forces and health care systems, cannot afford critical medicines, even generic medicines at greatly reduced prices. He mentioned several steps taken by Ireland, but acknowledge even these steps were humbled by the enormity of the problem. He called upon the international community to contribute to a Global Fund specifically on the crisis. He also commended the World Bank s work in this area and recent commitments by the US for $15 billion over the next five years. The second challenge is the elimination of unsustainable debt for the poorest nations. He acknowledge the World Bank s help on this issue, but also suggested a more ambitious approach was needed.
President Wolfensohn provided some brief closing remarks, and Mr. Ahern took a few written questions from the audience. On a question about access to HIV/AIDS medicines, he noted many countries are simply too poor to purchase generic drugs. Ireland s aid in this area has increased to $50 million. Asked whether debt cancellation was realistic, he asked rhetorically whether debt repayment was realistic. He also suggested that debt cancellation was not the end of the challenge. The challenge would be to make sure these countries did not fall again into the debt trap again.