Foreign direct investment (FDI) into the Republic fell by nearly 50 per cent last year, while investments made by Irish companies abroad more than tripled, according to new figures,
Estimates compiled by the Organisation for Economic Co-operation and Development (OECD) show that FDI flowing into the Republic totalled $14.1 billion (€11.6 billion) in 2004, down from $26.9 billion in the previous year.
The 2004 total approached the low reached in 2001, when the technology boom collapsed and the September 11th attacks pushed the US economy into serious decline.
By contrast, foreign direct investment made by Irish companies abroad has been climbing rapidly, rising from $3.5 billion to $11.4 billion last year.
This disparity between inward and outward investment levels has drawn critical comment from Fine Gael, which said the Government is failing the "international competitiveness challenge".
Fine Gael's enterprise, trade and employment spokesman, Phil Hogan, accused the Government of falling down in the face of attractions offered by low-cost emerging economies.
"We are now identified as a high-cost economy and it is clear that investment from both outside and inside the country is responding by going abroad. Inaction by this Government is adding to the problem," said Mr Hogan. He pointed to rapid increases in investment in countries such as India , saying the figures represented "a worrying portent of things to come".
The OECD estimates suggest that China continued to receive a large share of the direct investment in developing countries last year. FDI into China rose to a record $55 billion, up from $47 billion in 2003.
In Eastern Europe, inflows into Romania picked up particularly sharply last year, climbing from $2.2 billion to $5.2 billion. Analysts have attributed the rise to the country's success in stabilising its economy and to its strategic importance in a changing European landscape.
Cumulative inflows into the Republic over the decade to the end of 2004 remain well above outflows. The OECD estimates that investment inflows over the period amounted to $139.3 billion, or the eleventh biggest total out of 29 OECD countries.
Irish companies invested $46.6 billion abroad over the same period. This was the sixteenth biggest investment out of the same 29 countries over the decade. Last year's sharp drop in investment inflows into the Republic occurred as FDI outflows from the US hit an all-time high of $252 billion.
