Ireland: fourth best little country in which to do business

Ireland has slipped from first to fourth in Forbes' annual rankings of the best country in the world to do business. Denmark takes the number one slot followed by Hong Kong and New Zealand.

Forbes produces its annual Best Countries for Business report based on seven information sources measuring 11 metrics including innovation, taxes, property rights, technology and stock market performance in 146 nations.

Ireland is ranked first in the world in the category of “personal freedom.” It comes sixth in terms of “investor protection” and ninth for “trade freedom.”

It comes 17th in the world when ranked in terms of “corruption,” and eighteenth for its ability to protect both intellectual and physical property rights.

Ireland is nineteenth for the amount of “red tape” facing business and comes in 20th position for “innovation.”

In its commentary on Ireland, Forbes said: “Since entering office in March 2011, the new (Enda) Kenny government has intensified austerity measures to try to meet the deficit targets under Ireland’s EU-IMF program.”

“Ireland has grown slowly since 2011, but managed to reduce the budget deficit to 7.2 per cent of GDP in 2013. In late 2013, Ireland formally exited its EU-IMF bailout program, benefiting from its strict adherence to deficit-reduction targets and success in refinancing a large amount of banking-related debt.”

“In the wake of the collapse of the construction sector and the downturn in consumer spending and business investment, the export sector, dominated by foreign multinationals, has become an even more important component of Ireland’s economy. Agriculture, once the most important sector, is now dwarfed by industry and services,” the Forbes report concludes.

Last week one of the key sources used to compile the Forbes report, the influential International Property Rights Index, warned that Ireland risked falling back in Forbes rankings if it introduced plain packaging for cigarettes and other products.

Forbes is critical again this year of the United States which ranked 18th in Forbes' ninth annual ranking of the best countries for business, down four spots from last year. Forbes said this "marks the fifth straight year of declines since 2009, when the US ranked second. Blame an expanded government, as well as expensive new regulations in finance and health care."

Denmark, Forbes said, was the best country in the world to do business because its “business climate is extremely positive.”

“It scored highly across the board, finishing in the top 25 in each of the 11 categories we considered with top five showings for personal freedom, technology and low corruption,” it said.

“One of the keys to Denmark’s pro-business climate is the flexible labour market known as “Flexisecurity,” where companies can easily hire and fire workers with out-of-work adults eligible for significant unemployment benefits,” Forbes added.

Among other major economies Japan rose two spots from last year to number 26, while China fell three places to number 97. Germany jumped four places to 20th place while France fell sharply by eight places to 27th.