The details of the National Development Plan will be eagerly awaited in Co Donegal where it will be seen as a test of the Government's commitment to turning around the economic fortunes of the county.

Last month's report of the Donegal Employment Initiative task force made it clear that there could be no quick and easy solution to the county's employment crisis which was brought to national attention by the announcement last December of 770 lay-offs at Fruit of the Loom plants.

The 260-page report is an economic action plan for the county over the next seven years and sets out clearly what it expects from the National Development Plan - namely an allocation of 4 per cent of total spending on the basis that it has 3.6 per cent of the population and is lagging very far behind most of the State.

The authors, expecting spending of about £18.5 billion (€23.49 billion) in the national plan recommended an allocation of £732 million for Donegal, but said that this should be pro-rated up or down to equate to 4 per cent of the Public Capital Programme over the period. The report states: "What is most important is that the concept of a seven-year financial plan to underpin a seven-year multi-sectoral development strategy is endorsed."

It was acknowledged by the chairman of the task force, Donegal county manger, Mr Michael McLoone, that the job targets set out in the report were regarded as unrealistic by some of the State development agencies. However, Mr McLoone said it was the view of the task force that 9,950 new jobs were needed by 2006 given that the level of unemployment, at more than 20 per cent, was significantly higher than any other county in the State.

The report recommends that all development agencies set a target of reducing unemployment in Donegal to the national average by 2006 and this would mean applying a rate of jobs growth similar to that experienced in the Dublin area over the period 19931997.

In a sense, the report is saying that the people of Donegal have a right to expect the same as people in Dublin. However, the target of 4,750 new jobs in the foreign direct investment and internationally traded services sector, and 2,400 in the indigenous sector, appears particularly ambitious when the past record of State development agencies is considered.

The north-west regional president of IBEC, Mr Peter Mulrine, in praising the report, pointed out that in the three counties of Donegal, Sligo and Leitrim over the five years up to 1997, the net new job creation in Enterprise Ireland and IDA-supported companies stood at only 906, or 2.1 per cent of the 42,453 total for the State over the same period.

In a sectoral breakdown of spending, the report recommends that the largest share of the £732 million allocation (£171 million) go to human resources. Analysis of the Donegal workforce highlights the need for an emphasis on education and training and the Fruit of the Loom employees prove this point in particular.

In a survey of 942 workers being laid off it was found that only about 25 per cent had Leaving Certificates. Only 50 people had a qualification higher than the Leaving Cert and 80 per cent expressed an interest in training or education. Some 73 per cent were under 34 years of age and nearly 600 were female.

These 942 people who took part in FAS interviews and skills analysis set up as part of the work of the task force were from a total of 1,019 workers who lost, or were due to lose their jobs at Fruit of the Loom and two other clothing companies which also closed down in the county this year.

The Lifford-based Donegal Shirt Company, with a staff of 136, announced in January that it was to close, and Fingal Manufacturing in Moville, with 48 employees closed in March. A replacement company, O'Neills Sportswear, moved into the Lifford plant and has employed 45 people, but this is due to rise to 90. When Fruit of the Loom announced the 770 jobs losses last December, the 53 workers at the company's Dungloe plant had already lost their jobs.

A Malaysian medical equipment company, Ho Wan Hor, is now expected to start up in Dungloe within the next three to four months, employing 75, although the project has suffered setbacks before. In one good news announcement, US-based Pacific Healthcare has decided to locate in Letterkenny and hopes to create 150 jobs over two years. Recruitment is now taking place.

The task force report says "the outlook is optimistic for further job announcements for one or more of the plants which are about to be vacated". Production has continued at the Fruit of the Loom plants long after the expected closure dates, which means that the dramatic lay-off of 770 people at one time has not actually occurred.

Instead, it has been a slower process and the full effect of the lay-offs will not be felt until after the summer period. All the 770 workers were given their redundancy payments in April, but many of them were still working on weekly contracts up until July. Others chose to leave in the intervening months. The Malin and Milford plants were completely closed down on July 23rd. The Raphoe plant will remain open until October and about 210 of the 380 employees are still working there. Voluntary redundancies accounted for the 120 job losses at the Buncrana plant, and this scheme was in fact oversubscribed.

It is believed that the company ultimately scaled down operations on a much more gradual basis than originally planned because it was not possible to switch so much production to plants in Morocco so quickly.

In making the announcement last December, Fruit of the Loom said the remaining 1,000-plus jobs would be guaranteed for 1999, but the future after this year remains uncertain. Mr Sean Reilly, the SIPTU branch secretary in Donegal, said there was a lot of unease about job security among the remaining workers.

FAS has put in place a tracking system for all of the 1,000 workers affected and they are also being guaranteed training opportunities. Bridging courses to allow people to return to education are to be provided and the Institute of Technology in Letterkenny is to offer a one-year foundation certificate for entry to all the college's other courses.

The report also recommends special measures to help stop the "brain-drain" out of the county and improved childcare to allow people to avail of second chance education.

It has still to be seen whether the Fruit of the Loom lay-offs will result in a lot of young people leaving the county, as was feared when the announcement was made. Many of the men who were laid off are said to have gone to Belfast or Dublin for work on building sites, returning to their families at the weekends.

A very small number have tried to set up their own businesses. Mr Christy Deeghan, the former embroidery and finishing manager who worked at the Buncrana plant for 22 years, took voluntary redundancy last October knowing his job would soon be gone anyway. He now employs four people, also former Fruit of the Loom employees, at Millennium Emblem Design, in Buncrana.

He says he has "heaps of work" and wants to expand but is being held up waiting for support grants to come through. He started initially by investing more than £100,000 of his own money. "If I had waited for the grants, I wouldn't be started yet," he says.

The banks also refused him finance at first, saying the equipment was too specialised. Now they have changed their opinion, but he says he needs some grant aid if he is to expand and take on three more people.

"They should at least try to be quicker in processing the grant applications. There is nothing else for us, so we have to make it work. It will be a long time before we are getting anything more than just a living out of it, but we are in it for the long haul."