Ireland Inc still near the top of the league

NET RESULTS:Ireland may not be the perfect place to do business, but it is better than 174 other countries, writes KARLIN LILLINGTON

JUST AS so many people were getting their Schadenfreudethrill from the doom and gloom in the Irish economy, along comes the World Bank and International Finance Corporation to ruin the fun.

In their annual report, which measures how accommodating nations are for doing business and providing a supportive growth environment, Ireland came seventh out of 181 economies.

Yes, you read that right. “A high ranking on the ease of doing business index means the regulatory environment is conducive to the operation of business,” the report says.

Singapore comes tops in the “ease of doing business” rankings, and we come in just after the UK and ahead of Canada. The top 10, in order, are: Singapore, New Zealand, the US, Hong Kong, Denmark, the UK, Ireland, Canada, Australia and Norway.

Way down in last place is the Democratic Republic of the Congo.

Under the 10 areas used for assessment, Ireland is in the top 10 in four: “starting a business” (where we rank fifth); “protecting investors” (fifth); “paying taxes” (sixth); and “closing a business” (sixth). We are 12th in the “getting credit” category (not bad, though possibly out of date), and 18th for ease in “trading across borders”.

Our worst performance is in “registering property”, where we come in at a shameful 82 (due to the time it takes to complete a registration and the high cost of doing so, at more than 9 per cent of the cost of the property).

We muddle through in three other areas, all falling in the 30s: we get a 30 for “dealing with construction permits” (perhaps not much concern in that area now, though); a 38 for “employing workers” (measured in terms of how “rigid” the work environment is and how costly redundancies are); and come in at 39 for the ease of “enforcing contracts”.

We do even better when our ranking is calculated against the 27 Organisation for Economic Co-operation and Development (OECD) countries: we come in fifth (again, just behind the UK) and are in the top 10 countries in eight of the 10 categories, though we are 23rd out of 27 when it comes to registering properties.

Within the OECD grouping, we come in first place for paying taxes, second for protecting investors, fourth for starting a business, and fifth for both getting credit and closing a business.

All of this raises an obvious question: how can this be so, if Ireland is supposedly a basket case with flawed regulatory systems and facing the prospect of worse times ahead?

One might argue that reports get things wrong, and this is just another example of the rest of the world being fooled into thinking we are not a banana republic.

But this is the World Bank, using lots of financial and other indices to work out the calculations. As much as some may wail about them, our Government and agencies surely aren’t adeptly hiding hideous information from World Bank scrutiny. And this is not just a survey of Ireland in isolation; the report is an elaborate benchmarking process – if we are not perfect, then at least we are doing better in these critical areas than 174 other countries.

That brings us to the uneasy conclusion that maybe some of the calculations are right and the State is not a bad place to be based as a business when seen in the wider scheme of things.

That is not to say that there are not obstacles, unnecessary barriers and many areas for improvement. But to come in the top 10 of such an index, for a small country that was business unfriendly only a few decades ago, is quite an achievement, and quite a turnaround. Obviously, it is why Ireland has been so attractive to inward investment and why, despite job and company losses, the State still boasts an impressive line-up of international firms.

All of that could change over time. Making ongoing adjustments to the economic playing field, reforming areas that need reform, and choosing the best ways to foster “innovation” – that vague catch-all term beloved of corporations, consultants, ministers and journalists – all remain day-to-day challenges.

But we do seem to have a relatively solid foundation in areas that keep the State appealing as a business location. That won’t vanish overnight, as has been proven so far, despite some dire prognosticating as the recession began to bite.

Of real concern is that eternal negative streak that permeates the Irish business landscape, which is happiest when things go wrong and reacts to any positive report with disdain while trumpeting every negative one.

Ireland is not kind to its own entrepreneurs, for example. There are good reasons, I think, why so many leave and quietly succeed elsewhere.

The World Bank report is an indication that we are doing quite well as a place for international companies to come and do business. What we need to address urgently is why this apparently accommodating business environment does not adequately nurture homegrown innovation, entrepreneurship and business growth.

• The Doing Business2009 report can be downloaded at http://doingbusiness.org/

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