The success of the Irish economy provided an example and a market for Scotland, the Taoiseach told the Scottish Parliament in Edinburgh yesterday.
In a historic address by an Irish leader, Mr Ahern emphasised the two countries' business, political and cultural links.
Referring to key European Union talks in Edinburgh in 1992, which delivered millions in aid for Ireland, Mr Ahern said vital decisions taken there had had "important consequences" for Ireland's economy.
"European funding provided an invaluable boost to our economy, although it is just one part of a complex story. It has contributed to the strengthening of our economic infrastructure." But he told members of the Scottish Parliament that the work was far from done: "We have enormous problems in infrastructure which we have to resolve. We have huge problems with inter-city routes.
"It will take us a considerable time to deal with them. They are costly, but necessary. However, these are the problems of success." Emphasising the cultural links that bind Ireland and Scotland, he said: "There is much to be learned from exchanging ideas and emulating each other's best practice. I realise that our economic performance attracts keen attention in Scotland, given the obvious parallels between us. We have developed an economic model based on social partnership and fostering of a strong enterprise culture that has worked exceptionally well for us.
"We are also increasingly aware that economic advancement brings in its wake a very different set of challenges which must also be tackled with vigour and determination," he said.
The battles often fought between the Industrial Development Authority and its Scottish equivalent, Locate in Scotland, were an indication of the success that each had internationally.
"We never mind people in the foreign investment world saying that Ireland and Scotland dominate. As long as both of us do it together, I don't mind," he said. Ireland's new-found prosperity offered opportunities for Scotland: "Irish-Scottish trade already totals some £1 billion a year, and there is significant scope for this to grow strongly."
The Parliament's presiding officer, Sir David Steel, said links between members of the Scottish Parliament and the Dail were growing steadily.
More could be done: "Our young generations must seize every opportunity to come together in a modern age, to forge new and strong links not built on the mistakes of the past."
Scotland's First Minister, Mr Henry McLeish, said Ireland and Scotland had never been better placed "to recognise and express the connections between us". Scottish devolution had "made a new relationship possible", he said.
"The energy and the focus of our new parliament has given Scotland a new sense of itself. Scotland today feels different and is different. It is a new, confident country, contributing and drawing strength from the Union, and looking outwards to the world."
Later, the Taoiseach told a seminar that the Government viewed the economic integration of the EU as "an asset to our economy". Irish membership of the EU was but one of four factors for the country's success. The others were education, a youthful population and social partnership.
The full text of the Taoiseach, Mr Ahern's address to the Scottish Parliament yesterday can be accessed from The Irish Times website, www.ireland.com
