Tuesday 25 October 2016

Time to invest in the economy

Published 27/09/2015 | 02:30

The Infrastructure and Capital Investment Plan, to be announced this week, will be more important than the Budget to the economic development of the country in the medium to long term.

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The announcement last week that the Web Summit is to move to Lisbon in 2016 has been linked to the strong infrastructural network of that city.

When the economic crisis hit, successive governments here took the decision to postpone or defer larger public transport projects until conditions improved. The time has now come to begin the process of honouring that commitment.

Since 2000, an estimated €70 billion has been invested through the public capital programme - a four-fold increase in the decade up to 2008. In particular, the national road network is a visible legacy of the economic boom period and has provided the necessary capacity for some time to come.

Now a broad blend of measures must be presented by the Government to complement industrial advancement with social provision, quality of life and environmental sustainability.

Previously high levels of investment were part of a catch-up phase to bridge the gaps in the country's infrastructural capacity. Since the crash, investment has fallen back by about 60pc from peak, which has led to either postponement or cancellation of some essential projects.

In defence of that decision, the Government have argued that the process of closing the budget deficit will benefit infrastructure development in the longer term.

The plan this week will consist of transport networks necessary to move people and goods, vital energy to power industrial production, broadband and interconnection capacity for the exchange of information and ideas. It is critically important that the right policy and regulatory environment is also put in place to maximise the efficiency and competitiveness of these measures.

An immediate priority will be the acceleration of the delivery of high speed broadband to the regions and, in particular, to Small and Medium Enterprises.

Economic recovery in Ireland will depend on the ability of the enterprise sector to trade successfully with innovative products and services in increasingly competitive global markets.

But while physical and technological infrastructure is necessary for economic growth, investments in agriculture, forestry, the marine, tourism, the environment, energy efficiency, flood defence, health and personal social care facilities, housing and sport are also important.

There are also demographic demands for school places, so there is an urgent need to invest further to expand the country's stock of schools.

The Government must also play an important role to facilitate the private sector in spurring on economic growth and job creation. In that regard, the ongoing use of public-private partnerships as alternative sources of funding will undoubtedly form a component of the plan. It is essential, however, that there be a commitment to the necessary funding in particular areas which are not favourable to private investment.

Sunday Independent

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