The weakening economic performance of the Republic has been reflected by a fall of three places in its international competitiveness ranking. Along with Singapore and Hong Kong, the Republic has paid "the price of a huge turnaround in economic performance", and is now ranked 10th, according to the World Competitiveness Yearbook published today.
The yearbook is complied by IMD - a Swiss business school - and rates countries by economic performance; government efficiency; business efficiency and infrastructure.
Countries - such as the Republic - which were fast growing and exposed to the technology sectors were among the biggest losers last year in terms of competitiveness, according to Prof Stephane Garelli of IMD. The countries which benefited from the economic turbulence were the more "cautious" ones such as the Netherlands, Switzerland and Austria which all moved up the rankings.
The United States remains the most competitive country of the 49 included in the yearbook, with Argentina coming last. Ranking 10th is the worst performance in the past five years by the Republic which came fifth in 2000.
Of the 15 member-states of the EU, only Finland, Luxembourg, Netherlands and Denmark came higher than the Republic. The UK was ranked 16th, down two places from 2001. The Republic has fallen down in all four main categories used by IMD.
The biggest fall has been in the infrastructure category, where the Republic has fallen from 15th last year to 23rd this year. In terms of basic infrastructure, the State comes 31st out of the 49 countries in the survey. The actual distribution infrastructure - roads, trains and planes - is ranked 46th, ahead of only Italy, the Philippines and Columbia. This ranking was based on a survey of top and middle management rather than statistical data.
Where Ireland does score highly in terms of infrastructure is in the flexibility and adaptability of its workforce. It is ranked fifth in this area and also scored strongly in areas such as funding for technological development and support for competitiveness, coming 10th in both categories.
In terms of economic performance, the Republic scores highly on employment growth (third) but falls down on consumer price inflation (35th). It also takes fourth place in terms of both direct inward investment and exports. Overall, it is ranked 10th, down from sixth last year.
Of the four main categories used by IMD, the Republic is strongest in the area of Government efficiency where it ranks fifth, down from third in 2001. The main reason for its relatively high ranking is the low rate of corporation tax which is the lowest average rate of all countries in the survey. The State ranks second in the survey in terms of real corporate taxes; the suitability of the education system to the needs of the economy; and investment incentives.
The fourth main category looked at by IMD is business efficiency. The Republic's major advantages here include the size of the banking sector and the image of Ireland abroad as a centre for business. Ireland ranked third in both these categories and fourth in terms of the productivity of industry. Weaknesses in this category were the threat of multinationals locating production outside Ireland (41st); the number of industrial disputes (36th); and the relatively low number of working hours (35th).
