The £3.7 billion Western Development Commission plan rejects an exclusively city-led approach to economic development, but accepts that a limited number of towns must be the focus for industrial development.
The chairman of the WDC, Mr Sean Tighe, said because 81 per cent of people in the seven western counties lived outside towns with populations of 5,000 or more, there was a need to maximise the potential of these smaller towns and villages. At the same time, it was recognised that the main engine of the State's recent strong economic growth had been the success in attracting foreign investment.
It is argued in the report that industrial development incentives should be used to encourage small firms, both foreign and indigenous, to locate in smaller urban centres. "This should be achieved by a significant restriction on incentives offered to such firms in the major centres of population," it states.
Such a policy of restricting incentives for SME overseas industry to smaller towns would help towns such as Buncrana, Letterkenny, Sligo, Castlebar, Westport, Ballina, Tuam, Ballinasloe, Ennis and Shannon.
The report says priority should be given in the allocation of EU and national funds to addressing the imbalance in economic performance.
It sets out a £3.7 billion programme for the seven western counties until 2006. This figure comprises money from the EU and the Exchequer.
The WDC said yesterday this amount was "realistic" and that the plan differed from others in that it was fully costed and prioritised, and was being presented by a Government agency tasked with spearheading economic and social development in the west.
It calls for a greater focus on making the western economy self-sustaining and on creating jobs in productive sectors. A skills database for the region should be developed, and investment priorities should be determined by their expected economic return. High priority is given to upgrading the national primary roads, and key projects are listed and costed.
The report gives detailed economic data on a county-by-county basis and deals with all the major sectors in the economy. It calls for the introduction of regional targets for job creation and investment. A target of achieving three-quarters of the growth rate of the fastest-growing regions would yield an additional 19,000 jobs in the seven counties.
It emphasises the need for more tourist accommodation in the west, identifying this as one of the reasons tourism growth in the region is 17 per cent below the State average. As an example, it states that while Kerry has 623 Bord Failte-approved units of accommodation, Sligo has just 156, and Leitrim 58. It says there is no case for continued State support for tourist accommodation in larger cities.
It advocates spending £511 million on agriculture over the next seven years, but the commission says there is no justification for subsidising support for larger farms given the scale of investment needed and the constraints on resources. It recommends a cut in headage payments but accepts the need for income support for poorer farmers, and calls for greater diversification.