THE State should invest its resources and energies in areas such as education and take "decisive and courageous action" on tax reform and privatisation, the former director of GATT, Mr Peter Sutherland, said last night.
Mr Sutherland, who gave the Sean Lemass Memorial Lecture at the Humbert Summer School last night, was presented with the Humbert Leadership Award for his role in the negotiation of the GATT Treaty. The director of the school, Mr John Cooney, described him in a citation as one of the most powerful and important Irishmen on the world stage.
In his lecture, Mr Sutherland said that Ireland was "far more statist than virtually any of our competitors amongst developed economies or indeed many in developing economies."
Other EU members have been quick to grant derogations and delays to Ireland on privatisation. "Essentially they don't care. They don't care because they know that continuing protection, achieved either through the maintenance of monopoly powers or state subsidies will do them no harm. Quite the reverse. Overtime, the protected sector inevitably becomes less rather than more efficient as a result of its protection."
It was time to reconsider the policy of statism in Ireland. "The bottom line is that it is now generally agreed that it is not the vocation of politicians or civil servants to run businesses." The semi state sector was not the answer either, for inevitably the State was the power over the semi state.
There might be some argument for maintaining natural monopolies in a limited number of areas, but it should be the rule rather than the exception that the state get out of business wherever possible, he said. "The rest of the world is moving rapidly with the widespread recognition that ii is the duty of the state to govern and more specifically to regulate but not to conduct commerce."
On education, he said the real challenge in providing jobs was to create conditions conducive to employment. Government had a vital role in providing the infrastructure for this and education was the most important area. "As a percentage of GNP we spend far less than the European average on education," he said.
Ireland used the UK as a benchmark. This created an unjustified complacency, because the UK had one of the lowest ratios of young people over 16 in full time education.
"The reality is that the enormous capacities of our young have been developed through an exceptional motivation by parents and young people to avail of opportunities for education."
The possibility of more university places being found this year was a good thing but "we must recognise that we are playing with fire." Already many faculties appeared overloaded and underresourced.
Ireland must spend substantially more at pre university level as well, and in deprived areas. This must be done effectively.
