Business

Sunday 4 December 2016

It's time for Ireland to look east to the potential of the former Soviet republics

Senator Feargal Quinn

Published 10/11/2011 | 05:00

Ireland will chair the Organisation for Security and Co-operation in Europe (OSCE) in 2012 and it will be a fantastic opportunity for Irish businesses to co-operate with new partners and stimulate economic growth.

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The OSCE is what is known as a 'regional security organisation' under the UN Charter. It was established in the wake of the Cold War to manage residual issues and to build confidence.

There are 56 participating states, including all European countries, the US, Canada, and all the states which emerged from the former Soviet Union.

The work of the OSCE falls under three dimensions; Political-Military issues, Economic and Environmental issues and the Human Dimension, which covers areas such as human rights and free elections.

As chairman of OSCE, the Tanaiste will be involved in promoting democratisation in the OSCE region and in the efforts to find a solution to the protracted conflicts in places such as Georgia, Moldova and the Nagorno Karabakh region of Azerbaijan, currently occupied by Armenia, drawing lessons from the Northern Ireland peace process.

We can also use this opportunity to find new international partners for Irish businesses. This need for economic co-operation is, of course, greater than ever.

In particular, Ireland's chairmanship of the OSCE will mean that we can reach out to states that are increasing in wealth and importance such as Azerbaijan, Kazakhstan and Turkmenistan. What must be kept in mind is that at the moment we do not have resident representatives in such countries.

Powerhouses

However, our chairmanship will change that. We can make greater contact with economic powerhouses such as Kazakhstan, which is among the 20 largest oil producers in the world.

Irish businesses active or interested in those countries can expect far greater name recognition for Ireland during 2012 than up to now.

We can also look to secure investment from these growing economies. Tony Blair is now advising the government of Kazakhstan which wants to increase its trade links with the UK.

The UK is now the third largest investor in Kazakhstan after the Netherlands and the US. Kazakhstan also wants to diversify the interests of investors away from oil and gas to invest in manufacturing and services and wants new partners.

The fact that Irish exports to Kazakhstan have increased by about 25pc over the last year gives some idea of the potential for growth.

There is also much more potential for expansion in areas like educational services. We should look to attract new students from these emerging markets, including students of English.

Education is now Australia's third largest export, attracting more than 450,000 overseas students per year. Also consider the potential for growth for Ireland in online education.

OSCE countries with limited supplies of natural resources like Georgia, Tajikistan, Kyrgyzstan and Uzbekistan, are also aiming to invest in their services industry.

This is at a time when our services exports increased by 10pc to a record high of €73.8bn in 2010. Our chairmanship of the OSCE means we will have much greater influence to make contacts and secure trade in such countries.

We should not fall into the trap of believing we can somehow start making microchips overnight. While such aspiration may be admirable, we must play to our strengths.

Our dairy industry, for instance, is one of the best in the world in terms of quality but an International Farm Comparison Network study found that Irish companies have now slipped out of the top 20 milk processors in the world.

Demand for dairy products in increasingly wealthy countries means companies like Danone and Nestlé are surging ahead.

Our manufacturing sector needs to look at areas where we can 'add value' through processing.

For instance, in terms of the dairy industry, a 2010 New Zealand government report found that the wholesale price of infant formula in Singapore was 10 times the price of the main ingredient, skim-milk powder.

There are other very tangible benefits. Although the chairmanship of the OSCE will cost €9m, it is believed that Ireland could gain almost €4m to €5m in tourism revenue in 2012 due to extra name recognition.

Tourism sources believe that around an extra €2.5m will be spent in December 2012 alone during Dublin's hosting of the ministerial council.

While it is fashionable to talk of Chinese and Indian tourists, we must seize the opportunity and look to how we can expand our tourism market to market to, for instance, the emerging OSCE 'participating states'.

If we are able to achieve progress in the role of the chair of the OSCE, for instance, in terms of resolving areas of conflict that still exist in the OSCE region, we can expect our name recognition and ability to foster greater trade links to grow.

Our leadership role with the OSCE and the EU presidency in 2013 will help to restore our reputation as a sound and reliable member of the international community after our well-publicised financial and economic woes.

I understand that our economic state agencies and The Department of Foreign Affairs and Trade are beginning to identify the business opportunities provided by Ireland's chairmanship of the OSCE.

Irish businesses must be aware of the opportunities that our chairmanship of the OSCE can leverage to assist the process of economic recovery and development.

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