The Pros And Cons Of Ireland: A Competitive Economy
1349 Words6 Pages
Introduction
The purpose of this paper is to outline how and why Ireland has been and needs to be a competitive economy and what the factors that contribute to this are. Some of the advantages and disadvantage of Ireland being a small open regional economy will be highlighted throughout the paper. There will be a discussion on the importance of FDI (Foreign Direct Investment) and how Ireland was more successful than other European countries in attracting large multinational companies. As international competitiveness is not clearly defined and the world economic forum (WEF) produces estimates of international competitiveness there will be an introduction to the 12 pillars of competitiveness and where Ireland are positioned in this report.…show more content… Ireland is positioned 24th in the overall ranking according to the WEF (2015-2016). The WEF state due to the efficiency of Ireland’s health and primary education, infrastructure, institutions and the Irish political and legal systems these are performing relatively well thus increasing Ireland’s position in the report (see appendices 1.0). These indicators have assisted Ireland in becoming recognised as a growing economy and they also make up for the lower rankings in areas such as the financial market development and the size of the Irish market. However, Ireland’s overall debt and the ease of business access to capital is another factor that is holding the nation back from performing even better, according to the Irish examiner (2015). Ireland would be described as a sustainable competitive economy, according to O’Farrell, R.…show more content… These US companies are responsible for almost 90% of Ireland’s exports and investment into Ireland. These companies are critically important to the growth and sustainability of the Irish economy, according to the US bureau of economics (2015). These statistics indicate that the companies located in Ireland under the financial services, chemical-pharmaceuticals and information technology sectors account for one fifth (38.7 billion Euro) of Ireland’s entire GDP, but employees are less than 4% of that workforce Regan, A. (2014). Regan A. (2014) also mentions Ireland is an export-led economy and for the Irish government to be sustainable it needs to attract more US investment.
At the beginning of the economic crisis in 2008 it was reported that Ireland had become a non-competitive economy, due to a domestic crisis in Ireland it lost international competitiveness and to escalate the situation Ireland could not devalue its own currency due to being part of the EU so one of its options was to increase taxes and cut wages in order to restore its