- CORPORATE ENVIRONMENT:
Ireland receives one third of U.S. investment in the European Union. Why are American firms so attracted to Ireland? One of the key reasons is the rock-bottom 10 per cent rate of corporate tax (compared with 40 per cent in Germany, 32 per cent in the U.S,, 30 per cent in Great Britain). Unfortunately, this favourable fiscal system is changing a bit as a 12.5 per cent corporate tax rate is planned to be launched in January 2003 to trading profits in all sectors (companies created before July 31st 1998 are not included in this new system).
- STRATEGY AND INITIATIVES:
- GETTING INTO LINES WITH OTHER EUROPEAN COUNTRIES:
To catch up with European standards and to erase its laggards, Ireland launched in 1993 a National Plan for Development to enable the country to enter the Euroland in January 1st 1999 and to reduce the unemployment rate based on the budget deficit. This plan was totally fulfilled thanks to the reasons described above and to an outward-oriented strategy.
- A STRATEGIC APPROACH:
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Developing trade: Trade has become the basis of the plans of development of the country. A promotional strategy was initiated by the Industrial Development Authority that merged with Entreprise Ireland recently, so as to attract foreign direct investments and to become an “export-plateform”. Multinationals bring inflows of capital that can be used to set up a steady economic growth. Sectors like the high-tech industry, electronics, telecommunications, pharmaceuticals are mostly in the hands of American, British and German foreign capitals (Dell, Cisco Computers, IBM, Intel, etc).
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Taking advantage of the European economic situation : Plus, one should keep in mind that the competitiveness of the economy was partly based on the weakness of the euro, that benefited to foreign based companies and to the economic growth.
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High-technologies and Telecommunications : Ireland has made itself the place for E-Business and new technologies and made of them the key sectors for foreign companies to get into. Ireland is closely involved in the development of new Digital Parks in order to stimulate the e-Business and internet developments in the country. Ireland has already substantially invested US$5 billion in the telecommunications infrastructure over the last 10 years and offers a reliable telecommunications system meaning that Ireland has one of the most advanced telecommunications systems in Europe.
- PRIVATE AND PUBLIC PARTNERSHIP:
A public private partnership is a partnership between the public and the private sector for the purpose of delivering a project or a service traditionally provided by the public sector. Trying to follow the British liberalization, Ireland chose to go its owned way by setting up a more secure system: the private / public partnership was established in order to keep both an eye on the a economy while promoting private initiatives (they bring about capital and quality of services). Numerous sectors are concerned by the PPP schemes (infrastructures most of all). Can be quoted the 2000-2006 PPP Roads Programme, which will increase the length of the Wareford Bypass; Limerick Ring Road, Second West Link Bridge in Dublin, Kilcock/Kinnegad motorways. The budget surplus is partly used in that sense to limit excessive privatisation.
- GROWING IRELAND:
The 2000-2006 National Plan for Development is mainly supported by public capital, European institutions and international bakers’ money. Because there is still a lot to be done to modernise the country, tender bids invitations are being multiplicated and competition is wild. Roads, environment, water supplying, public transports, wastage control, housing are sectors still “under construction”. There is there an opportunity to be taken and French companies saw it right as they are already presents on roads (M50) and on water supply (Vivendi Waters).
Ireland offers investors a profitable and English-speaking base to cope with the European demands and beyond. Ireland has become the best place for more than 1200 companies from all origins. Even if Ireland is a small market, an economic need must be addressed : infrastructures have to be renovated, people are willing to improve their standards of living, etc. Ireland has made a giant leap and its finantial capacities should not be neglected by foreign companies. The advantage is that Ireland benefits from a “demonstration effect” which means that companies that have been successful on the Irish ground is in itself a good point to attract other foreign multinationals.
SOURCES
NEWSPAPERS:
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Catching a Tiger by the Tail, Guardian Weekly, August 31st September 6th 2000.
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Le Tigre Celtique ou l’illusion d’un boom, l’Humanité, 17 mai 2002.
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Budget 2001, Une Economie à plein régime, MOCI,19-25 Avril 2001, n° 1490
BOOKS :
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Civilisation Irlandaise, Paul Brennan et Valerie Peyronnel, Hachette Paris 1999, 191 pages.
INTERNET :
APPENDIX
Document one : Figures of the economy and percentage of people under 25…………….p.8
Document two : Population growth rate. ………………………………………………………………………………p.9
Document three : The Educational system. ……………………………………………………………………….p.10
Document four : Corporation Tax Rates. …………………………………………………………………………….p.11
Document five : Foreign Investment in Ireland. …………………………………………………………………p.12
ATTRACTION OF THE IRISH MARKET
IRELAND’S ASSETS :
- EUROPEAN FUNDS
- SOCIALE CLIMAT
- The 1987 Agreement . To ensure good relations between employer/employees
- « QUALITY PEOPLE »
- A young, English speaking, flexible, well educated and not that expensive labour force.
- CORPORATE ENVIRONMENT
- 10 per cent corporate tax. Change in 2003 (12.3 percent) for all sectors.
- STRATEGY AND INITIATIVES :
- GETTING INTO LINES WITH OTHER EUROPEAN COUNTRIES
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The 1993 National Plan for Development.
- A STRATEGIC APPROACH
- Trade
- Weakness of the euro
- High-T and Telecommunications
- PUBLIC PRIVATE PARTNERSHIP
- Getting the best of both sectors for improved infrastructures
- GROWING IRELAND
- The 2000/2006 National Plan for Development.
- Tender bids invitation
- Opportunities to be taken
See document one and two.
