Transcript the Irish Experience - Emirates Institute for Banking and Financial

Attracting International
Investment
- the Irish Experience
th
Presentation to the 4 GCC
Conference, Abu Dhabi,
May 5, 2004
Overview of Ireland
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Population
3.9 million
Total at Work
1.8 million (was 1.1 million in 1990)
Area
70,282 sq. km
Climate
Temperate
Exports / GDP
92%
GDP per capita $30,000 ( ppp year 2001)
Over the past seven years, Ireland’s economic performance
has been spectacular (International Monetary Fund 2000).
• The average annual rate of increase in Irish GDP has been
8.5% over the 8 year period 1994 - 2001, the highest in the
EU and in OECD.
Ireland’s Economic History
• 1922 - 1958
– a basic agricultural economy
– self-sufficiency and protectionism
• 1958 - 1973
– opening up and joining Europe (EEC)
• 1973 - 1987
– some success, adjustments, but crises also
• 1987 to date
– ‘stunning’ development and growth
Ireland’s Economic Growth
9
8
7
Average
Annual
% Real
GDP
Growth
6
EU
5
4
US
3
2
Ireland
1
0
1970-79
1980-87
Source: OECD Economic Outlook
1988-93
1994-2001
Irish Factor and Productivity
Growth 1990 - 2000
E m ploym ent
L abour
P r oduc tivity
EU
To tal Fa cto r
P r oduc tivity
M anufa ctur ing
Pr oduction
US
M anufa ctur ing
P r oduc tivity
Irela nd
0
2
4
6
8
% av erage annua l gro wth
Source: European Competitiveness Report 2001
10
12
Ireland in the 1990s
• Results from development decisions of
earlier decades and from EU membership
• European Single Market
• Social partnership and economic stability
• Demographic gains - more young people
• Foreign Direct Investment (FDI)
• Global orientation and openness
Social Partnership
• 1987 – Major Challenge
– rising unemployment (17%) and emigration
– public finance deficits and debt (120% of GNP)
– loss of jobs and of national confidence
• National Social Partnership Agreement
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employers, trade unions, farmers & government
moderate wage increases and tax cuts
consensus on development priorities
shared efforts to achieve national goals
Education and Skills
• Youngest population in Europe
– 40% under 26 years; 30% elsewhere in EU
• 57% of graduates are in science, engineering,
computer or business studies
• Government initiatives to meet future need
Ireland’s Advantages
• Young, vibrant and highly-skilled workforce
• Consistent public policies, including low tax
• Strong developmental focus nationally, with
strong, informal network links
• Agility, creativity, flexibility and ‘can do’
• Rapid responses e.g. skills development
• Successful development of high-technology,
high-productivity, trade-based FDI
FDI in Ireland - Highlights
• Leading European location for electronics
• World’s largest exporter of software
• All top pharmaceutical and medical device
companies have plants in Ireland
• Highest return on investment in Europe
for US companies (U.S. Department of Commerce)
• >80% of manufactured exports
• >35% of Gross Domestic Product
Key Features of FDI
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No ownership restrictions in Ireland
No discrimination in operating conditions
Appropriate licensing and regulation
Key sectors:
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Information and Communications Technology
Pharmaceuticals and Healthcare
Internationally Traded Services
International Financial Services
e-business
G overnm ent
M in is t e r f o r E n t e r p r is e ,
T r a d e & E m p lo y m e n t
I D A I r e la n d
F orfa s
B o a r d (1 2 M e m b e r s)
( P o lic y A d v ic e )
C h ie f E x e c u tiv e
S c ie n c e F o u n d a tio n
I r e la n d
( R e s e a r c h F u n d in g )
E x e c u tiv e C o m m itte e
S e c to r a l D iv is io n s ,
R e g io n s & O v e r s e a s
2 9 5 S ta ff
E n te r p r is e I r e la n d
( S u p p o r t f o r I r is h - o w n e d
b u s in e s s a n d t r a d e )
Marketing Process
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Identify and access target companies
Build relationships and understand needs
Match our offering to their needs
Provide ‘one stop shop’ service
Deliver offering and perform to promises
Provide top quality aftercare
Continue and deepen relationships
IDA Worldwide
United Kingdom
San Jose
Chicago
Atlanta
Boston
New York
Netherlands
Germany
Korea
Japan
Taiwan
Australia
Dublin International Financial
Services Centre
• Government decision – 1987
• Implementation by committee chaired by
Secretary General to the Prime Minister
• 10% Corporate Tax agreed with EU
• Local development incentives
• Local banks engaged positively to promote
• Marketing team engaged with global
Instituutions – attracted role models
Key Background Factors
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Open, responsive business environment
Welcome for, and success with FDI
EU and OECD membership and policy continuity
Free access (“passport”) for services throughout
the EU
Free capital movement
Educated population with business orientation
Professional Services with global outlook
Low corporate taxes
Main Activities in Dublin
• Banking, asset financing and
securitisation, leasing
• Corporate Treasury Management
• Fund and investment
management/administration
• Insurance
– Life and non-life/general
– Reinsurance, captives and broking
IFSC Statistics
€ billion
 Bank assets of international banks
207
 NAV* of domiciled investment funds 375
 NAV* of all funds
558
 Cross-border life assurance premiums
5.6
 Cross-border gross non-life premiums 10
 Assets of international non-life insurers 30
Number of domiciled investment funds - 3394
Direct Employment – 12,000
The Future for FDI in Ireland
• High value knowledge-based activities
• Education, skills, research and innovation
will be key competitive advantages
• New technologies and business models
• Better regional spread sought
• Better integration of FDI and Irish business
• FDI will continue to be of great value to us
Attracting International
Investment – The Irish
Experience