Private investment in developing world urged

Irish private-sector firms need to get more involved in investing in developing countries, the Minister of State with responsibility for overseas aid, Conor Lenihan, has said.

Mr Lenihan said the Republic had to "move beyond" purely aid-based involvement in the developing world towards a model involving greater private-sector investment. "It's not enough just to be giving huge volumes of aid to these countries," he said at the launch of the 2004 annual report of Development Co-operation Ireland yesterday.

"This is the big challenge for the future, to get companies in, say food or telecommunications interested in the area. It won't be easy, but there are opportunities there."

The report shows the Republic devoted a smaller share of its national wealth to development aid last year than it did in either of the two preceding years.

Aid spending is moving further away from the United Nations recommended level of 0.7 per cent of GNP, in spite of repeated Government promises to reach this target.

As a proportion of GNP, the State's aid budget was fractionally down last year on 2003, though the rounded-up figure for both years is 0.4 per cent. In 2002, it was 0.41 per cent.

In money terms, the 2004 budget was nonetheless the biggest ever, at almost €489 million, compared to €446 million in 2003.

The Government is expected to announce in September when it intends to meet the 0.7 per cent target.

Five years ago it promised to reach the target in 2007, but later stated this was unattainable. The biggest single destination for Irish aid is Uganda, which received €30.7 million last year.