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IRELAND

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by

Ruzeb Chowdhury

on 21 January 2014

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Transcript of IRELAND

2011
Debt: $230.6 billion
Debt to GDP: 104.1%

Compared to UK Debt: $2.1 trillion
The Plan provides a blueprint to return to a stable economy. It will:
• Create a plan of action to restore order to government revenue and expenditure.
• Identify the areas of economic activity which will provide growth and employment in the recovery.
• Specify the reforms the Government will implement to accelerate growth in those key sectors.
As Ireland's government became self aware that the economy is in a pretty bad state, they enacted a National Recovery Plan that would last 4 years starting in 2011 and ending in 2014.
Ireland
by
Ruzeb,
Vivian
,
Eli
,
Bobby
,
and

Daniel

NEW YORK CITY
Ireland
(this is where we are, for those of you who don't know)
IRELAND'S ECONOMIC ISSUES
What we think happens in Ireland
What really happens in Ireland
Key Macroeconomic Indicators
GDP
2012 Real GDP: $224 billion
2010 Real GDP: $217 billion
2008 Real GDP: $247 billion

Inflation
2012 Inflation rate: 1.7 %
2011 Inflation rate: 2.6 %
2010 Inflation rate:
-1.0 %
2009 Inflation rate:
-4.6 %
2008 Inflation rate: 4.1 %
Unemployment
2013 Unemployment Rate:
12.8%
2012 Unemployment Rate:
14.7%
2011 Unemployment Rate:
14.6%
2010 Unemployment Rate:
13.5%
2009 Unemployment Rate:
12.6%
2008 Unemployment Rate:

5.6 %
Due to government spending, the economy finally got a positive Real GDP growth rate after three years of negative rates. The crisis of 2010 decreased the GDP from 2008 by a shocking $30 billion!!!
Key Trading Partners
United Kingdom
Percentage of Exports: 16.1 %

€320 million worth of cheese
€115 million worth of butter
€100 million worth of mushrooms
29% of sheep meat exports
46% of pig meat exports
50% of beef exports

The UK has always relied on Ireland for trade in agriculture.
Belgium
Percentage of Exports: 15.1%

60% of pharmaceutical exports
34% of organic chemicals
Medical equipment
Office machinery
USA
Tesco
(a mere supermarket)
Percentage of Exports: 9%

€705.8 million in Food and Beverage

Tesco is worth €2.7 billion to Ireland per year and exceeds France or Germany as a key trading partner.
Exports
As a small economy, Ireland has long focused on exports to maintain its rapid economic growth and generate high living standards, making it a trade-dependent economy. Despite the current economic crisis, the country has managed to sustain high exports volume.

Agriculture accounts for about 80% of Irish exports. Ireland is the biggest beef producer in the EU and the fourth largest in the world.

Because of the business friendly environment in the country, Ireland has attracted foreign companies such as Apple, Microsoft, IBM, Oracle, and Google.

2008 Total Ireland Exports: $117 billion
2012 Total Ireland Exports: $119.3 billion


Imports
The UK accounts for 37.75 % of Ireland's total imports, while the runner-up US accounts for 13.7% of imports. Ireland imports petroleum, aircraft, cars, circuits, and medicaments, among others.
2008 Total Ireland Imports: $78 billion
2012 Total Ireland Imports: $63.6 billion
2008 Trade Surplus: $39 billion
2010 Trade Surplus: $59 billion
2012 Trade Surplus: $55 billion
Percentage of Exports: 20.1%

$40 billion worth of:

Medicinal, dental, and pharmaceutical products
Alcoholic beverages
Textiles and clothing
Glassware
Attempt for Recovery
In 2008, the COWEN government guaranteed all bank deposits and tried to recapitalize the banking system. In 2009, the National Asset Management Agency to take over large loans from banks to return them to normal liquidity. In the face of severe deficits and reduced revenues, wages for public servants were decreased. These actions, however, were not sufficient, thus dissolving the COWEN government.
Recession
Ireland
The National Recovery Plan 2011-2014
What is it?
What it hopes to achieve
The Plan projects that real GDP will grow 2.75% on average over the 2011– 2014 period.

• 90,000 (net) new jobs will be created over the period 2012-2014.

• Unemployment will fall to below 10% by 2014.

Government Plan of Action
Reduce the minimum wage by €1 to €7.65.
Reform welfare system to motivate people to work.
Cut public service staff numbers by 24,750
Raise an additional €1.9 billion through income tax changes.
Keep corporate taxes low at 12.5%
Economic policy will have a primary focus on regaining control of public finances and the banking sector
Is it working?
2013 Unemployment Rate: 12.8%
2012 Unemployment Rate: 14.7%
2011 Unemployment Rate: 14.6%
2010 Unemployment Rate: 13.7%

2012 Inflation rate: 1.7 %
2011 Inflation rate: 2.6 %
2010 Inflation rate: -1.0 %

2012 Real GDP: $224 billion
2010 Real GDP: $217 billion
Ireland Recovery Plan
Ireland is a small, modern economy that adopted the euro in 2002. Rapid economic expansion (GDP growth of 6%) during 1994-2007 occurred due to low corporate taxes and interest rates, resulting in a property bubble.
The government declared
a recession during 2008 after the global financial crisis. GDP fell by over 3% in 2008 and 7% in 2009. The property bubble burst and domestic property markets collapsed. Government deficits increased, the Irish Stock Exchange fell, and many businesses closed, increasing unemployment.
Ireland has never been without a debt
The Debt Iceberg
2007
Debt: $64 billion
Debt to GDP: 25%

Compared to UK Debt: $1.15 trillion
2008
Debt: $108.5 billion
Debt to GDP: 44.2%

Compared to UK Debt: 1.08 trillion
2009
Debt: $142.5 billion
Debt to GDP: 64.4%

Compared to UK Debt: $1.45 trillion
2010
Debt: $196.5 billion
Debt to GDP: 91.2%

Compared to UK Debt: $1.83 trillion
2012
Debt: $262.3 billion
Debt to GDP: 117.4%

Compared to UK Debt: $2.3 trillion
Ireland Is Divided Into:
Republic of Ireland
Northern Ireland
Republic of Ireland
The Republic of Ireland is a parliamentary democracy with bicameral
legislative format with two houses in the Oireachtas (Parliament)
The President is allowed to serve a maximum of two terms with seven years per term and is elected by the people.
Government Incentives
An important part of Ireland’s incentive package is the availability of generous government grants towards initial start-up costs.
Grants are also available towards investment in Research & Development (R&D) facilities and new R&D projects.
Tax
12.5% rate of corporation tax where the taxable profits arise from a trade carried on in Ireland (one of the lowest in the EU).
Interest payable
: when a company is generally entitled to deduct interest on borrowings applied for the purposes of its trade.
Loss Relief
: Tax adjusted trading losses may be used to reduce or eliminate corporation tax.
Start-Ups are relieved of tax for the first three years.
Workers

Since 38% of Ireland's population is under 25 years of age, 60% of students undertake computer science, engineering, and business courses, companies will have no trouble in hiring experienced and hardworking workers with broad and diverse talents. Irish workers in manufacturing facilities have earned a reputation for creativity, flexibility, and productivity.
IDA Ireland Edge
IDA Ireland works in close partnership with new and expanding manufacturing operations, ensuring that they have the facilities, resources and contacts needed to sustain a competitive edge in their industry.
Business Incentives
Ireland’s attraction to multinational corporations, both those operating here and those considering investment, is based on a variety of factors, from low tax to the quality of the workforce.
Government Spending

Infrastructure Spending
Are we still a PIIG nation?
Debt
Ireland is on an everlasting spiral to increasing debt. Debt as a percent of GDP has already stacked up over 117%.
GDP
GDP has risen in Ireland due to an emphasis on business and an increasing population. GDP is expected to rise 0.8% in 2014.
Domestic Market
The housing market appears to have stabilized and has now shown two consecutive months of modest price increases. The turnaround reflects an improved economic environment, low interest rates and the absence of new supply.
Unemployment and Inflation
Inflation has been brought down to economic standards, while unemployment is still high but dwindling.
No
Yes
The End
Bibliography
CountryEconomy.com. Web. 01/14/14.
CSO | Central Statistics Office. Web. 01/21/14.
education.ie.
Department of Education and Skills. Web. 1/20/14
Ellyatt, Holly.
Why Ireland Could Soon Exit Europe’s PIIGS Nations
, 08/01/12. CNBC. Web. 01/20/14.
Expendature Report 2013.
(Ireland) Government Publications. web. 1/19/14 .
"Expendature on Social Welfare." Central Statistics Office. web. 1/19/14
"Expenditure Trends". Department of Public Expenditure and Reform An Roinn Caiteachais Phoibl Agus Athchirithe. N.p., n.d. Web. 18 Jan. 2014.
IDA Ireland.
Incentives to Invest
. Web. 01/18/14. <
http://www.idaireland.com/business-in-ireland/high-value-manufacturing/incentives-to-invest/
>.
"Ireland." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. N.p., n.d. Web. 19 Jan. 2014.
"Medical Cards." Citizens Information Board. Web. 1/20/13
Social Spending
Energy:
Sovereign State
Status:
Needs to be updated with security of supply, competitiveness, meeting carbon emmissions.
Short term plans:
Province of the United Kingdom
Religiously Divided
Divided Between Unionists and Nationalists
Nationalists want Northern Ireland to become part of the Republic of Ireland
Unionists would like to stay part of the UK
Research and development of alternative and renewable energy sources
Develop energy conservation program to reduce energy consumption by 20% in 2020
42% Protestant (mostly Unionist)
41% Catholic (mostly Nationalist)
Long term plans:
10% energy reduction by 2016 through aforementioned program
Strengthen electricity transmission grid
Increase energy sercurity
In the Late Sixties, Catholics in Northern Ireland Faced Discrimination
Peaceful protests were held in support of more rights
The protestors were violently attacked by the police
The UVF (Ulster Volunteer Force) also attacked Catholics in response to the protests
The IRA Responds
The IRA (Irish Republican Army) responded to the attacks by attacking Unionists and setting off bombs in Protestant areas
Soon there was an all out war between the UVF and IRA
This violent conflict became known as the troubles
Violence also spread into nearby areas in the Republic of Ireland
Ends of The Troubles
Violence continued until the Good Friday Agreement was signed in 1998
Over 3500 people, were killed in the conflict
Most of the dead were civilians
Economic Effects
The violence started an economic crisis in Northern Ireland
The economic problems overspilled into the Republic of Ireland
Transportation:
The Troubles
Status:
A mixed bag of quality
Short term plans:
Funding to improve speed and quality of mainline rail
Funding program for public/private transportation in Gateway Cities
Long term plans:
Reconsider tranport projects in Dublin
Consider construction of Atlantic Corridor
Ports plan to allow access to deeper water and accomodate larger vessels
Communications:
Status:
Needs improvement to meet producer and consumer needs.
Short term plans:
Long term plans:
Status:
Long term plans:
Short term plans:
Status:
Short term plans:
Long term plans:
Identify national communications systems risks
Improve broadband services and make it more available
Spending Numbers

(2011 figures)
Improve and lower cost of broadband services
Make broadband services in the top five of European table leagues for availability, speed and uptake
Water and Flooding:
Water quality is decreasing; there are challenges with flooding.
20.9
for Social Protection
14.0
for Health
8.6
for Education
2.4
for Justice
7.0
for other expenses
56.2 Gross Total Expenditure
Publish National Flood Forecasting and Warning Study
Establish Irish Water
Universal water charging and metering program
In bill. of €
(2012)
Achieve "good" water status
Complete Catchment Flood Risk Assessment and Management plans
Reduce unaccounted for water by 30% and carbon footprint by 20%
Waste:
Social Protection expenditure is 29.6% of the gross GDP, EU average was 29.1%
Social protection spending more than doubled since 2001, going from 7.8 billion Euros to over 20 billion today.
Jobseeker's benefits and state pensions accounted for the highest spending out of the social protection categories.
Out of all EU nations, Ireland spends the least percent of its social protection on the elderly.
Rapid improvements being made. Looking to turn waste into a resource and continue recycling.
Regulate collection of household waste
Develop waste recovery treatment capacity
Construct Poolberg energy-from-waste facility
Revise and coordinate regional waste management plans
Have expert waste management engineers
Have Poolberg energy-from-waste facility up and running
"Public Policy, Public Expenditure & GNP | Independent Thinking on Public Policy Issues." Public Policy Public Expenditure GNP. N.p., n.d. Web. 18 Jan. 2014.
Redmond, Paul.
A Survey of the Benefit System in Ireland
. publicpolicy.ie web. 1/18/14
RSM International.
Doing Business in the Republic of Ireland
, 2012. Web. 01/17/14.
The Observatory of Economic Complexity. Simoes, Alexander. Web. 01/15/14. <http://atlas.media.mit.edu/country/irl/>.
"The State of Ireland 2012." Engineers Ireland. Engineers Ireland, n.d. Web. 19 Jan. 2014.
The World Factbook. Central Intelligence Agency. Web. 01/12/14
Trading Economics. Trading Economics, 2008. Web. 01/13/14
Social Protection
Health Care
People have a choice between the public healthcare system or private companies
The public plan is maintained by the Health Service Executive
People on the public plan receive some basic services for free, but have to pay subsidized fees on many services.
People on welfare, or those with certain illnesses can receive a Medical Card, which entitles them to many services for free, including hospital care, dental services, and prescriptions
Education
Education is headed by the department of Education and Skills
Primary and Secondary schools are free to attend, but higher education can cost over €50,000
However, under the "Free Fees Initiative" first time college applicants who meet certain requirements can get through an undergrad program with only a couple thousand Euro fee
Full transcript