Retaining Objective One status for EU Structural Funding would "not be a panacea" for regions experiencing low levels of job creation, the chief executive of IDA Ireland, Mr Sean Dorgan, has said.

If the Government application to the EU for 15 counties to retain Objective 1 status is successful, this would help the work of the IDA because it would mean improved infrastructure and would "differentiate this region from much of the rest of the country", Mr Dorgan said.

Speaking in Sligo on the second day of a two-day visit to the north west, Mr Dorgan said he did not believe this factor alone would be enough to turn the situation around. "It is important, but it is not a panacea," he said.

Mr Dorgan said he was conscious of the fact that growth in the west, the north west, and the border regions generally had not been as strong as in Dublin and the east of the country. "It is something we feel we need to address over the next few years. We are certainly committed to doing more in Sligo and the north west generally."

Meanwhile, the Irish Business and Employers Federation in the north west has blamed "the abject failure of regional development policy in this country over many years by successive governments" for the divergence in economic development.

Mr Brendan McGinty, IBEC regional director, welcomed an admission by Mr Dorgan in Donegal on Thursday that job creation needed to be spread more evenly around the regions. He also welcomed the new focus in the IDA on addressing "the inward investment deficit in the north west".

Mr McGinty said a twin-track approach was needed, involving aggressive marketing of the region through inter-agency co-operation and increased partnership with the private sector, and an acceleration of investment on infrastructure.

Mr Dorgan yesterday met members of Sligo County Council and Corporation, who expressed dissatisfaction with the IDA's past record in bringing new investors to the area.

Mr Dorgan said he was "aiming to bring a number of projects to Sligo over the next year or two", but said that even with greater incentives in the west, many companies would still want to stay in Dublin.