Private Sector Developing the Right Strategy to Achieve Real Export Growth in Asia


Colin Lawlor, Chairman IEA Asia Trade Forum and Brian Davy, Chairman, Davy at the Launch

Ambitious plans to expand Irish exports in Asian markets will, if fully implemented, lead to increased exports of €10 billion per annum in five years according to details of the IEA’s ‘Asia Trade Strategy 2011 – 2015’ which was launched today (25.1.2011) in Dublin.

According to Mr Colin Lawlor, Chairman of the IEA Asia Trade Forum, the strategy outlined in the organisation’s latest publication shows how critically important it is that Ireland grows its exports to Asia from the current 4% of total exports to a much more meaningful 10% within the next five years. “As the private sector in setting this ambitious export target we are making it clear ,we can no longer sit back and hope the State agency slow growth targets on top of what can only be described as inadequate past performances, is sufficient in the fast growing Asian markets” said Mr Lawlor. He added that the Irish nation and Irish exporters must aim high, much higher than in the past, and by setting this target as a key goal, we plan to drive State policy and the necessary action to achieve the 10% target. In this way we can help to position Ireland to benefit from our strong trading relationship with Asia over the rest of the decade.

Ronan O Houlihan, Investment Director at Davy, who sponsored the IEA publication, stated at the launch event;
‘The emergence of the Chinese middle-class will have profound changes on the structure of the Global Economy. How Irish exporters respond to this change will have a significant bearing on the course of our recovery’

Mr Lawlor said that it would not be too much of an exaggeration to say that this current decade could be described as the ‘the Asian decade’. “Over 50% of the world’s population live in Asia and three of the four fastest growing economies are located there, recent estimates suggest that Asia will represent 45% of the global economy by the time this year’s primary school entrants graduate from college” he said. To illustrate the potential of the Chinese market he said that China had economic growth exceeding 10% per annum and there are more than 160 cities in that vast country with populations in excess of one million and among these increasingly urbanised people there is a rapidly expanding middle-class demanding more and more sophisticated goods and services. Mr Lawlor noted that despite this enormous growth in demand, in 2009 there were only 75 Irish companies that had established a significant presence in China. “Encouragingly, in 2010 this number increased to 115, but, even still the numbers are disappointingly low,” he added. In Japan, the third largest market in the world and one that has been open to Irish exporters for a much longer time, the number of Irish companies with a significant presence has struggled to reach 35. “Ireland is losing share in Asia even as Asian markets expand and we must do something about this now” he said.

The Asia Trade Forum (ATF), an initiative of the Irish Exporters Association which arose from the Irish Government’s Asia-Pacific Strategy, has the role of developing strategies which will assist Irish exporters to build new business in all of the Asian markets, but most particularly in China, India, Japan and the Republic of Korea. Mr Lawlor noted that the potential rewards of developing business in Asia are enormous. “Based on the World Trade Organisation’s figures for China it is possible to extrapolate that if we were to increase our exports to one percent of total Chinese imports we would increase our sales to China by over US$10 billion annually. Applying this same formula to the other countries in the region and it is easy to see why we should, indeed must, develop our trade with Asia as a matter of urgency,” he added.

One of the key recommendations in the Asia Trade Forum’s strategy is the need for increased government commitment in the form of staffing allocations in key Asian countries. Mr Lawlor noted, for example, that in all of India, Ireland has only three development agency staff. “This is comprehensively and hopelessly inadequate number and at the ATF we are urgently requesting Government to increase embassy and development agency staff to demonstrate its commitment to this issue,” said Mr Lawlor.
Other recommendations contained in the Asia Trade Forum’s Trading with the Asia Pacific Region 2011 – 2015 publication include:
? We must get to know Asia better and faster and this should be reflected in increased trade mission and visits by Government officials as a matter of course.
? We must get to know Asia better at home by working with the Diaspora in Ireland and we must develop practical measures to drive this issue.
? We must reflect Asia in our education system at all levels to include languages, culture, history and geography.
? We must expand global internship programmes for students to foster real world business connections and experience.
? We must recognise the reality that Asia offers a competitive edge rather than mere competition and to that end business should be educated on Asia’s opportunities and potential, particularly in relation to the impact of globalisation and the strategic imperative to at least consider Asia in corporate strategy development.
? The network of Irish Country Directors and the Asia Business Support Programme should be re-established with all those from Enterprise Ireland through to local embassy staff actively focusing on identifying business partnerships and opportunities.
? There must be increased Government funding as well as practical commitment in terms of resources which must be prioritised according to greatest opportunities. In-market presence should, at the very least, match that of the EU and US regions and there should be a focus on additional incubator and trade support in the priority markets. This is a significant challenge, but should nonetheless be prioritised.
? In country business parks to be established as one stop shops for Asian companies to encourage investment in Ireland as well as similar establishments for Irish companies in Asian locations
? Dual tax agreements would allow greater and easier access between Ireland and the countries of the region and vice versa. It would also better enable more efficient Asian FDI into Ireland and Irish FDI into Asia. The aim of the programme should be to complete such agreements with all Asian priority countries within the next two years and at the same time to expand awareness and promotion of those agreements which have been finalised.
? A number of other recommendations are contained in the ATF strategy including encouraging more Asian students to study in Ireland as well as ambitious plans to make Ireland the most business friendly country in Europe, and a call to review visa requirements.

Mr Lawlor concluded by saying that the Asian Trade Forum agenda is an ambitious one and one that cannot be achieved overnight. “We believe, however, that a concerted effort from Government, the State Agencies and Industry will be required over the coming five years to deliver a solid future for Ireland in the critical Asian markets.

ENDS

Full Publication is available to download here