Wednesday, May 29, 2019

Ireland in top 10 for competitiveness in world in 2019 - Fact or Fiction?

IMD, the Swiss business school, released its World Competitiveness Rankings for 2019 this week with Singapore at the top of ratings of 63 countries. Ireland returned to a 7th ranking it had achieved in 2016 based on data for 2015 — the year of Leprechaun Economics when moves by Apple and other multinationals to reallocate via accounting entries (not relocate) assets such as intellectual property (IP) to Ireland, had resulted in GDP (gross domestic product) rocketing over 26%.

IMD relies on hard data for two-thirds of its criteria and one third are based on surveys.

The top ranking for Ireland is fiction and compares with the Swiss World Economic Forum's Global Competitiveness Report 2008-2019 ranking of 23rd.

IMD scores countries on Economic performance; Government efficiency; Business efficiency and Infrastructure, including scientific infrastructure, health and environmental sustainability as well as education.

Ireland's global social, economic, business rankings 2019

IMD said on Tuesday:

"The biggest climber for the region, Ireland, rose five places to 7th as business conditions improved alongside a strengthening economy. According to the data, Ireland leads the way globally for investment incentives, the handling of public sector contracts and areas such as image, branding and talent management."

As for the "handling of public sector projects," the facts suggest the opposite in 2 large recent projects: 1) the building of a children's' hospital and 2) the rollout of broadband in rural areas.

Much of Ireland's economic and business data are massively distorted by significant corporate tax avoidance engaged in particular by US multinationals.

1) Last year the CSO (Central Statistics Office) estimated that when GDP of €294bn in 2017 was stripped of some multinational distortions, a Modified Gross National Income value of  €181bn was more realistic;

2) In March 2018 the Economic and Social Research Institute (ESRI) said it had become “almost impossible” to gauge Irish economic activity or produce an estimate of sustainable growth with the current set of indicators. The economics think tank said headline growth and its components were being distorted by large transactions involving a select number of firms.

See here for fake foreign investment data and the mythical 856,000 employed in foreign affiliates of Irish companies;

3) More than half the value of exports is fake and metrics on knowledge-related trade are not reliable;

4) It's delusional that Ireland is among the top 10 innovative economies in the world;

5) As it is that Irish workers are the most productive in the world.     

The cost of delusion

“This is welcome news, and international comparisons like this are important in the world of foreign investment — rankings matter,” said Martin Shanahan, chief executive of IDA Ireland, the inward investment agency, on Tuesday.

...and newspapers such as the Irish Times report the rankings as fact without the need for qualification while IMD is credited with being "widely acknowledged as one of the most reputable barometers of international competitiveness."

The Irish Independent report, "Ireland is the fastest climber in Europe in a prestigious ranking of competitiveness, and the gap between this country and the UK has widened dramatically."

Government ministers and enterprise agency chiefs love this fake news because it gives then bragging opportunities while lazy journalists join the chorus from the amen corner.

Why bother with reality when "prestigious" international institutions cannot see behind the leprechaun's rainbow?