Her Excellency Mary McAleese
President of Ireland

"Ireland - A Transformation in Progress"

It is a great privilege for me, on my first official visit to California, to have been invited to address your Council in this magical city. I am well aware that the West Coast is the leading source of high-tech investment in Ireland. Knowing the IDA (Industrial Development Agency of Ireland), I am sure that Enda Connolly and his team view each of you as an investor or potential investor, and me as part of their marketing support! Whatever my role, I propose telling you about modern Ireland as I see it.

Ireland has been profoundly transformed, economically and socially, over a single generation. It is a transformation that has been described by J.P. Donleavy – the U.S.-born author who now lives in Ireland - as the most incredible revolution any society has ever undergone. While that may be somewhat of an exaggeration, there is no doubt that our rate of economic growth and development in recent years is unique in the modern European experience, and has been accompanied by an equally dramatic degree of social transformation.

This extraordinary story provokes two questions: How did it come about and what are the key challenges facing us in the future as we look forward to the new millennium?

Investment in Ireland

These seemingly straightforward questions, perhaps inevitably, have quite complex answers. On the economic front, the seeds of our present-day economic success were sown in the 1960s, when we began to abandon the policy of protectionism, which had been followed since our independence, forty years earlier. Major initiatives were taken at the time to generate an investment climate, which would encourage foreign export companies to locate in Ireland.

Foreign investors responded with enthusiasm, none more so than American companies who quickly became, by far, our most important source of inward investment. Today, American affiliates account for almost two-thirds of all jobs and 80% of exports by foreign subsidiaries in Ireland. We deeply appreciate the contribution this long-term commitment has made to today’s flourishing economy.

That success did not, of course, happen overnight. Our attractiveness as a location for foreign investment was enormously boosted by joining the European Economic Community in 1973. That important step not only opened up markets, but also expanded our horizons, giving us both the means and the confidence to become the gateway to Europe.

Of equal importance was the fact that we targeted key industrial sectors, producing sophisticated and high-value products, which offered the best growth potential. This policy has reaped enormous dividends, and it was made possible because of our strong commitment to investing in a highly educated and skilled workforce. The opening up of free secondary level education to all our people in the 1960s proved to be one of the most far-sighted and important elements in securing our later economic success. It provided opportunities to a wider range of people, from all social and economic backgrounds, releasing a huge reservoir of talent and energy.

Of course, the type of education in which we have invested has also been crucial. Our education system, traditionally and classically based, has been massively transformed: first at the secondary level and, more recently, with the creation of new universities and institutes of technology. These have catered for new economic and social needs and, perhaps most importantly, new personal aspirations. Women have been particularly prominent in the software sector, which now comprises over 600 companies, including more than 110 multinationals, mainly U.S.-owned. American companies have brought new technology and marketing skills to Irish business and, through their training and ethos, have instilled a new confidence and ambition in their young Irish workforce. We are now the world’s second-largest exporter of software products behind the U.S. -- an extraordinary statistic for a country which, not so long ago, was so heavily dependent on agriculture.

Looking to the future, we are conscious of the need to continually invest in our young people, for we know that our capacity to remain on the cutting edge of new technology is dependent on meeting the ever-increasing demand for highly-skilled professionals. We are fortunate that, unlike many other European countries, we have a young population and their demand for software and other high-tech courses at the college level remains buoyant – indeed, it exceeds our supply. At a time when there is a worldwide shortage of software engineers and technicians, we are ideally placed to lead Europe in the development of emerging sectors such as e-commerce, the Internet, and multimedia.

We also know that opportunities in these new sectors will gravitate towards locations with the most sophisticated telecommunications systems. A major investment in world-class telecommunications facilities will shortly be completed throughout the country. We missed the first Industrial Revolution, but we will not miss this one!

All of the above factors, and many more, have contributed to the amazing array of statistics, which have made the Irish economy a model for other countries to emulate. Our GDP per capita is now comfortably above the European Union average. Less than a decade ago, it was just 60%. Forecasters expect our output to grow by 8.5% this year, and growth rates of at least 5% annually seem eminently sustainable into the next decade. Inflation and interest rates are low. Most important, our unemployment rate, which was stubbornly high for so long, has plunged to 5.8%.

A Country of Net Immigration

Ireland, which had for generations witnessed the loss of its young people and their talents to emigration, has now become a country of net immigration. Indeed, we have come full circle, benefiting not just from the return of Irish emigrants who have accumulated an impressive range of experience and skills abroad, but also from a new influx of young professionals from other European countries. This phenomenon, together with the buoyant level of natural population growth and rapid expansion of female participation in the labor market, has been a key factor in enabling our economy to continue its expansion.

Our population growth has a dimension beyond the purely utilitarian: the total population of the state is expected to pass the 4 million mark by 2006 -- a level we have not experienced since the catastrophic post-Famine decline in 1871. It is proof to us that we have finally stanched the bleeding of our best and brightest people, which inflicted such a profound psychological wound on us as a people in the past. Turning this corner has helped us realize and appreciate that the dark trauma of emigration has brought us a positive and enduring legacy through the great Diaspora of Irish people and their descendants that extends across the world today. That extensive network has spread Irish influence and ties of friendship to every part of the globe. However, nowhere is the Irish presence more extensive and more important to us than in America, where 42 million people claim Irish ancestry. The success of Irish-Americans in politics and in corporate America has been -- as I am sure you hardly need reminding -- truly astounding.

I mentioned previously the importance of foreign investment, especially by U.S.-based companies. Corporate investment decisions driven by hard-nosed business criteria and the presence of American companies in Ireland is due to competitive advantages. With this in mind, I am equally convinced that our historic and cultural links -- the strength of friendship and affection which holds our two countries together -- has also played a crucial role. Ireland might not even have been considered as an investment location a generation ago, when the conflict in Northern Ireland was at its peak and our economy was less successful. It is thanks to the many friends we had in the United States: people who understood the situation, who kept in touch with developments and who took time to explain the real facts to their friends and business contacts. Because of this, the pioneers of American investment in Ireland were encouraged to seek us out. I would like to acknowledge and warmly thank the Irish-American community for that invaluable contribution. Your help made a real difference when we were most in need of friends.

We Irish, at home and abroad, have always been characterized by our strength in adversity. We have had plenty of practice. The challenge we now face is to manage and sustain our current success, and to shape the Ireland of the future socially, as well as economically. What type of society do we want? What type of value system do we pass to the next generation?

A Vibrant First-World Country, A Humbling Third-World Memory

There is a danger that our dazzling economic figures can blind us to the fact that not all of our people have shared the benefits of that success. There is something incongruous in the conclusion of the recent United Nations’ "Report On Poverty" -- that America and Ireland, in that order, have the highest and second highest levels of poverty among 17 Western nations surveyed. The measure, of course, is not one of absolute poverty, but of the disparity between the richest and poorest in our societies. It is of great concern that this gap is continuing to grow.

It is important that we do not complacently assume that economic success and social disparity inevitably go hand-in-hand. We can and must do something to bridge this growing gap. Never before have we had such powerful means at our disposal to achieve this; we now have the economic strength, growth rates and prosperity. What we need is the will to make it happen and I believe that we have it.

We still retain a strong sense of community, responsibility and caring for others -- a legacy, perhaps, of the @clan@ ethos in our past. That past is still within our living memory, a time when neighbor helped neighbor, sharing what little they had out of necessity, as well as decency. We are a vibrant first-world country, but we have a humbling third-world memory. That mix gives us a special ethos.

That ethos is evident in the importance we place on social inclusion, on broadening educational opportunities, on giving all of our people -- including and especially those who now live in poverty and deprivation -- the chance to build a better life for themselves. Social inclusion does not mean fostering dependency; it should be about offering people the encouragement, education, skills and opportunities which will enable them to have the dignity of independence.

The extent to which all people in our society are made to count, and believe that they count, is not just a measure of decency; it makes sound economic sense. The more people are left on the margins -- unable to participate or contribute -- the weaker the center, socially and economically.

The reverse is also true. In the 1960s, we saw how extending educational opportunities helped lay the foundations of our current economic success. That experience taught us that investing in our people, all of our people, is not only worthwhile, but also indispensable if a country is to truly reach its full potential. Tackling poverty and deprivation, and broadening educational training skills remain our greatest challenges; we have never been better placed to make it one of our greatest opportunities.

We in Ireland have come to know increased economic success in recent years. We have also come to know hope -- hope that this generation will be the last to know conflict on the island of Ireland and hope that we can realize the greatest opportunity for a just and lasting peace.

Peace and Partnership for the Future

The Good Friday Agreement was reached by political parties from all traditions in Northern Ireland and by British and Irish governments in April of last year, with the support and encouragement of our friends here in the United States. The Agreement gives us an opportunity to overcome the divisions of the past and to build a new future together based on peace and partnership. We commit ourselves to the peaceful and democratic resolution of our problems, to a future where partnership, equality and mutual respect will form the basis of relationships within Northern Ireland, between North and South, and between the islands of Britain and Ireland. We call upon ourselves to vindicate and protect the human rights of all of our people and we dedicate ourselves to the achievement of reconciliation, tolerance and mutual trust.

In the opening words of the Agreement itself, we have been presented with a Atruly historic opportunity for a new beginning."

But just as it took slow work to reach an agreement after generations of mistrust and suspicion, so it has taken and will continue to take slow, sometimes even painfully slow, work to see it fully implemented. We have yet to develop sufficient trust and confidence between the different political parties to enable the core institutions under the Agreement to come into being. The parties, under the wise stewardship of Senator George Mitchell, are currently meeting in Belfast to seek a way in which all can move forward together. I know that you will join me in wishing them success in their endeavors.

As I have said, progress has been slow, and there have been difficulties and disappointments, but I am in no way disillusioned. The people in Northern Ireland and the island of Ireland desperately want the Agreement to succeed. They gave it their overwhelming democratic endorsement and they know that only through the compromises and accommodations involved can real peace be delivered.

Just as the Agreement promised a new beginning with relations on the island of Ireland, it also promised a new beginning in relations between the two islands of Britain and Ireland - recognizing that there are historic links between the people of Ireland, England, Wales and Scotland.

It is most appropriate that the Agreement comes at a time when the United Kingdom is itself undergoing considerable change and renewal. The people of Scotland and Wales voted in referendum to bring assemblies into being in Cardiff and Edinburgh. A Scottish Parliament and Welsh Assembly were elected to participate together with representatives of Northern and Southern Ireland in the British-Irish Council, all to come into being at the same time as the other institutions envisaged under the Agreement.

I believe the British-Irish Council will be a part of the forging of closer and deeper links between our peoples. Although much of our shared history is fraught and there is much in our past to regret, there is also much to celebrate. We share a Celtic heritage, much of our culture, with Scotland and Wales. Many people in Northern Ireland can trace their ancestry to Scotland, in particular. Through the generations, millions of Irish people have made a home in Britain, a real and lasting contribution to the cities and the towns where they lived.

It is right that proper expression be given to the importance, complexity and very existence of these links as we come to build a future together in peace.

It is impossible to imagine that the Good Friday Agreement could have been reached without the support and encouragement of our friends in the U.S. The role of President Clinton has been immense -- not least, he sent us that great friend to Ireland, Senator George Mitchell. The [United States’] Congress and Senate have done all that we could have hoped for and much, much more to ensure that the peace process could succeed. American business has helped to create the circumstances in which many people could, for the first time, imagine a better and more prosperous life. To all of our friends in Irish-America and beyond, we owe an enormous debt of gratitude. Whenever we needed your friendship and encouragement, you were there for us. On behalf of the people of Ireland, let me say that we will always remember and be thankful to you for that.

Ladies and gentlemen, the approaching millennium stretches out before us, full of infinite possibility and opportunity. Whatever changes the new era brings, whatever new pathways we take, I am sure that our special relationship with America -- forged in adversity, but of immense value to both sides culturally and economically-- will not change.

I deeply appreciate the very warm welcome I have received here on the West Coast of America. I know that many of you have visited Ireland, for pleasure or business. We look forward to extending a ACead Mile Failte@ to many more of you, as friends -- old and new -- in the future.