The decision to establish an Irish embassy in Norway after over 50 years of diplomatic relations between the two countries might strike some as long overdue. Aside from the fact that Norway has had an embassy in Dublin since 1983, it is home to the Nobel Peace Prize committee, which bestowed the highest diplomatic honour on John Hume and David Trimble in 1998.

The Minister for Foreign Affairs, Mr Cowen, said last week that Norway had until now represented a significant gap in our diplomatic coverage of Western Europe. "The new embassy is part of a targeted development of our representation overseas in line with Ireland's essential national interests, both political and economic," he said.

Ireland's investment in its foreign service has traditionally been modest compared with other countries of similar size. The State currently has 57 missions abroad staffed by career diplomatic officers. Austria, by contrast, has 112.

However, the reasons for the recent decision to establish an embassy in Oslo are probably far less to do with strengthening the two countries' political and symbolic ties and more to do with straightforward economic dividends. Norway, which is the world's second largest exporter of oil, is the Republic's main supplier of crude oil and was its 16th largest trading partner in 1999. Total trade between the two countries exceeded £800 million (€1,016 million) for the first time in 1999.

A Department of Foreign Affairs spokesman confirmed that deciding where next to establish a more solid diplomatic presence was driven more by economics, than by politics as in previous years. "The main thrust of our diplomatic expansion is towards filling in the gaps in Central and Eastern Europe," he said. " With enlargement of the EU, there are 12 states looking to gain entry. We currently have diplomatic representation in three states," the spokesman said.

Last year the Department held a seminar in Dublin on using the Irish diplomatic network to help promote Ireland's economic prosperity abroad. It was followed up last month by another seminar, targeting the potential of the emerging markets of Central and Eastern Europe. The Department has also been promoting the concept of the Ireland House, whereby the overseas offices of state agencies, such as Enterprise Ireland, IDA Ireland, and the Irish Trade Board, are housed in the same building as the embassies, where possible.

The Ireland House concept forms the basis of the Government's economic focus overseas. Ireland Houses have already been established in Sydney, New York, Tokyo and Madrid. Another has recently opened in Singapore and the Tanaiste, Ms Harney, is due to open one in Shanghai later this year. In certain countries, such as Poland, the Czech Republic, and Saudi Arabia, both the embassies and the Enterprise Ireland offices operate from the same building.

Since both the Irish embassy and the Irish Trade Board office (now Enterprise Ireland) in Warsaw were established in 1990, Irish exports to Poland have grown from £24 million 1990 to £199 million in 1999, while Irish investment in Poland is soon set to surpass £1 billion. This raises the question of what specific economic role Irish embassies actually play?

"We all have our own brief," says Ms Eibhlin Curley, a marketing executive in Enterprise Ireland's office in Stockholm, which actually covers not just Sweden, but also Finland and Norway. "We would look after trade promotions, international buyers, different buyer groups and individuals from Ireland looking to build on what they already have here."

MR Brian Earls, First Secretary to the Irish embassy in Warsaw, Poland, agrees that the economic role of embassies is altogether different and would operate at a more official level, but that it is complementary to the work of other state agencies.

"Our knowledge of the commercial environment here means that we are able to brief Irish business people with background information about the country, orienting them to the market, making introductions, and intervening on their behalf at a senior level when the need arises," said Mr Earls.

Irish embassies have a reputation, it seems, for being understaffed. "That's a very reasonable perception," said one diplomat. However, they do achieve a good return for the resources they depoloy abroad.

This was supported by a report published in January this year by the Department of Foreign Affairs on the economic benefits of diplomatic representation.

According to the report, the Department of Foreign Affairs spent £44.63 million on the Irish foreign service, excluding the Passport Office and Ireland Aid. There are 483 non-contract staff abroad, of which 155 are of diplomatic grade, 78 non-diplomatic grade, and 250 locally employed secretarial and support staff.

In a general comparison of these figures with the foreign services of countries of a similar size to Ireland, including Austria, Denmark, Finland, Norway, and New Zealand, the report shows that Ireland emerges as the lowest in terms of annual running costs, the number of diplomats abroad, and the average number of staff per mission.

The Irish ambassador to Mexico, Mr Art Agnew, says that although the thin spread of diplomatic resources is no surprise, the foreign service comprises prudent civil servants who appreciate the importance of using resources economically. "We are effective because we always make a stringent application of resources to priorities," he said.

The important strategic and official role of Irish diplomatic representation in assisting Irish businesses with issues of a more structural nature would appear reasonable for the newer established embassies in emerging markets such as Latin America and central and eastern Europe.

WHAT about the longer established embassies, such as those in London, Washington, and Paris? Irish companies in these markets would be unlikely to need direct Government intervention or advice, preferring to communicate with local authorities themselves should the need arise, according to embassy staff.

An interesting development has been the appointment recently by the Department of Public Enterprise of a telecommunications and e-commerce expert as an attache to the Washington embassy. This person will be expected to monitor the US regulatory developments in these increasingly important areas.

A spokeswoman for the Washington embassy said that this appointment was an expansion of the economic section of the embassy.