Asia's troubles are unlikely to significantly affect the Irish multinational sector although the turmoil could result in the postponement of investment decisions by Japanese companies in Ireland.

Industry observers say the south-east Asia crisis could affect the sector in two ways. Of the IDA's 1,200 client companies, around 50 are Asian, mostly Japanese with a handful from Korea. Between them, they employ some 4,400 people all over the Republic.

Some observers fear that given the collapse at home, investment plans by these companies could be put on hold, or they may be forced to retrench.

"It's putting a lot of pressure on investment," one Japanese industry source admitted.

With banks in Japan retrenching and trying to restructure their business, they are cutting back on loans and charging more. As a result of the higher cost of funds, Japanese companies are looking again at their investments in Japan and globally.

The industry source said the crisis could result in investment decisions being deferred, but Japanese firms were unlikely to scale back their Irish presence.

"The Japanese are not knee-jerk merchants. They like to sit back and look," he said.

Nor should Ireland suffer too much from the likely fall-off in Asian investment overseas as it already receives just a trickle, mainly from Japan.

An IDA Ireland spokesman said that only one new Japanese manufacturing company invested in Ireland last year while there were four expansions by Japanese firms already here. It has had little success in Korea, attracting just four projects over the last 10 years.

He said the IDA generally does not have substantial strength in Asia and had scaled back its Tokyo office as the Japanese economy slowed down over the last few years.

Meanwhile, there are also concerns that Irish-based multinational companies exporting to the region could suffer from the contraction of demand resulting from the Asian downturn.

Multinationals accounted for 80 per cent of Irish exports to the region in 1996 with the computer and pharmaceutical sectors to the fore.

But Irish-based pharmaceutical firms said the industry was not readily affected by such crises as demand for its products was fairly constant.

"I see no sign of any diminution in demand for our products, nor would I expect there to be any," said Mr Sean Ward, a director at Schering Plough.

The company has operations in Cork and Wicklow and is the sole source of biotechnology-based pharmaceuticals for Schering Plough worldwide. It exports to more than 70 countries including Japan which it says is a very substantial market.

Merck, Sharp & Dohme director of public affairs, Mr John Condon, also said the Asia crisis was not affecting the Clonmel-based company at present. Nor does the company, which is building another production facility, envisage any significant impact.

Pfizer spokesman, Mr Cashel Riordan, said a negative impact would only arise if Asian countries were to announce significant cutbacks in government healthcare spending. But he noted that generally healthcare is the last thing to be cut.