So Forbes Magazine ranked Ireland 1st in the world as location for doing business (http://www.forbes.com/best-countries-for-business/list/#page:1_sort:0_direction:asc_search:). This is a bit of confidence builder for us as a nation looking out at the world, and a comical relief for everyone involved across the board.
Forbes does not release actual data, models and/or full methodologies, but their rationale can be glimpsed from here: http://www.forbes.com/sites/kurtbadenhausen/2013/12/04/ireland-heads-forbes-list-of-the-best-countries-for-business/
Basically, Forbes repackages other sources data and analysis to produce its own rankings.
What do these original (and other, occasionally more reputable) sources tell us about Ireland's position in global league tables?
World Bank Doing Business (2014) report ranks Ireland as follows (http://www.doingbusiness.org/Custom-Query/ireland and http://www.doingbusiness.org/data/exploreeconomies/~/media/giawb/doing%20business/documents/profiles/country/IRL.pdf?ver=2)
Summary: World Bank DB 2014 is nowhere near identifying Ireland as top country in the world for doing business. By DB rankings we are not in top-10 worldwide.
World Economic Forum (WEF) publishes a series of rankings for countries in terms of various aspects of doing business. Top of the line is The Global Competitiveness Report (GCR) http://www.weforum.org/reports/global-competitiveness-report-2013-2014
WEF's GCR 2013-2014 rankings for Ireland are:
Full report is linked here: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf
Snapshot on Ireland from the above: "Ireland is ranked 28th this year with a relatively stable performance. The country continues to benefit from its excellent health and primary education system (6th) and strong higher education and training (18th), along with its well-functioning goods and labor markets, ranked 11th and 16th, respectively. These attributes have fostered a sophisticated and innovative business culture (ranked 18th for business sophistication and 20th for innovation), buttressed by excellent technological adoption in the country (13th). Yet the country’s macroeconomic environment continues to raise significant concern (134th), showing little improvement since last year. Of related and continuing concern is also Ireland’s financial market (85th), although this seems to be tentatively recovering since the trauma faced in recent years, and confidence is slowly being restored."
Summary: by WEF GCR we are not in top-10.
WEF also publishes The Global Enabling Trade Report (latest is for 2012). Here are Ireland's ranks in that assessment (see Table 1 http://www3.weforum.org/docs/GETR/2012/GlobalEnablingTrade_Report.pdf):
Summary: by WEF GETR we are not in top-10.
WEF publishes The Global Information Technology Report (GITR), here are ranks for 2013 for Ireland:
You can see the detailed results here: http://www3.weforum.org/docs/WEF_GITR_Report_2013.pdf
Summary: by WEF GITR we are not in top-10.
Forbes survey cites WSJ/Heritage Foundation Index of Economic Freedom as another source. This is linked here: http://www.heritage.org/index/country/ireland
WSJ/H 2013 Index of Economic Freedom ranks Ireland as 11th (not in top-10) and the index shows deterioration year/year in all sub-indices save one: Monetary Freedom (something that Ireland has no control over). There is a handy chart on the right on the linked page to show that Irish scores have declined in every year from 2009 through 2013.
But WSJ/H index is not the state-of-the-art index measuring economic freedom.
Instead, much stronger, methodologically and data-wise is the Economic Freedom of the World index published by Fraser Institute. Here's the link: http://www.freetheworld.com/release.html
Per EFN 2013,
Summary: no, per Economic Freedom rankings we are not in top-10.
And so on…
I recently wrote in the Sunday Times that Ireland ranks 7th in the OECD in terms of start-ups actually being registered in the country. And that this data might be skewed by the fact that some start-ups registered here during the crisis period are really re-launches of businesses shut down due to pressures of the costs of 'upward-only' rent contracts. Other start-ups are various tax shells created by the MNCs and IFSC etc.
There are many reasons to treat all of the above rankings with a grain of salt. But the key point is: we are a good location for doing business and we are a good destination for FDI. But we are not top 1, nor even top 5. Which means that instead of glowing the bizarre lights of Forbes-like PR, we should be getting down to the painful and dirty business of real reforms.
PS: As Jamie Smyth of FT pointed out, the first time Forbes had Ireland as Number 1 country in its rankings was in 2007 - the same year when Oliver Wyman had Anglo Irish Bank as its World's Best Bank. I must also add, that whilst Forbes today says that Ireland is number 1 country because of lower labor costs and business costs, plus excellent monetary environment, back in 2007 we had sky-high labor costs and business costs, and rotten monetary and fiscal environments. So, apparently, Forbes' 'methodology' delivers identical outcomes on foot of diametrically contradictory data... hmm...
Forbes does not release actual data, models and/or full methodologies, but their rationale can be glimpsed from here: http://www.forbes.com/sites/kurtbadenhausen/2013/12/04/ireland-heads-forbes-list-of-the-best-countries-for-business/
Basically, Forbes repackages other sources data and analysis to produce its own rankings.
What do these original (and other, occasionally more reputable) sources tell us about Ireland's position in global league tables?
World Bank Doing Business (2014) report ranks Ireland as follows (http://www.doingbusiness.org/Custom-Query/ireland and http://www.doingbusiness.org/data/exploreeconomies/~/media/giawb/doing%20business/documents/profiles/country/IRL.pdf?ver=2)
- Overall Rank = 15th, unchanged on 2013 report.
- Starting a Business: 12th in 2014, a deterioration on 2013 rank of 9th.
- Dealing with Construction Permits: 115th, a deterioration on 2013 rank of 108th.
- Getting Electricity: 100th, an improvement on 2013 rank of 101st.
- Registering Property: 57th, a deterioration on 2013 rank of 51st.
- Getting Credit (do not laugh): 13th, a deterioration on 2013 rank of 11th. Note: WB references here strength of legal rights, depth of credit information, public registry coverage and private bureau coverage, so these rankings are not reflective of whether the banks actually provide credit or whether the country has a banking system to speak of.
- Protecting Investors: 6th, same as in 2013. Private pensions are not factored in, so expropriation / bail-in of pensions funds is not reflected.
- Paying Taxes: 6th, unchanged on 2013. Note: these refer solely to corporate and labour taxes by employers, so our income tax 'competitiveness' is not reflected here, nor are rates and indirect taxes are factored in.
- Trading Across Borders: 20th, same as in 2013. These relate to business transactions only, and do not reflect on-line trading & shipping to consumers.
- Enforcing Contracts: ranked 62nd, same as in 2013.
- Resolving Insolvency: ranked 8th in 2014, improvement on rank of 9th in 2013. This references solely business insolvency, neglecting to reflect the connection between personal insolvency (dysfunctional and outdated, even post-reforms) and business insolvency, and failing to reflect archaic professional fitness restrictions in the case of insolvency.
Summary: World Bank DB 2014 is nowhere near identifying Ireland as top country in the world for doing business. By DB rankings we are not in top-10 worldwide.
World Economic Forum (WEF) publishes a series of rankings for countries in terms of various aspects of doing business. Top of the line is The Global Competitiveness Report (GCR) http://www.weforum.org/reports/global-competitiveness-report-2013-2014
WEF's GCR 2013-2014 rankings for Ireland are:
- Overall rank = 28th in 2013-2014, which reflects deterioration in our position from 27th in 2012-2013 report.
- We rank 33rd in Basic Requirements for competitiveness;
- The above include: Institutions (rank 16), Infrastructure (26), Macroeconomic Environment (134) and Health and Primary Education (6)
- We rank 24th in Efficiency Enhancers;
- The above include: Higher Education & Training (rank 18), Goods Market efficiency (11), Labor Market Efficiency (16), Financial Market Development (85), Technological Readiness (13) and Market Size (57).
- We rank 21st in Innovation and Sophistication Factors
- The above include: Business sophistication (rank 18) and Innovation (20)
Full report is linked here: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf
Snapshot on Ireland from the above: "Ireland is ranked 28th this year with a relatively stable performance. The country continues to benefit from its excellent health and primary education system (6th) and strong higher education and training (18th), along with its well-functioning goods and labor markets, ranked 11th and 16th, respectively. These attributes have fostered a sophisticated and innovative business culture (ranked 18th for business sophistication and 20th for innovation), buttressed by excellent technological adoption in the country (13th). Yet the country’s macroeconomic environment continues to raise significant concern (134th), showing little improvement since last year. Of related and continuing concern is also Ireland’s financial market (85th), although this seems to be tentatively recovering since the trauma faced in recent years, and confidence is slowly being restored."
Summary: by WEF GCR we are not in top-10.
WEF also publishes The Global Enabling Trade Report (latest is for 2012). Here are Ireland's ranks in that assessment (see Table 1 http://www3.weforum.org/docs/GETR/2012/GlobalEnablingTrade_Report.pdf):
- Overall rank of 22 in 2012, down from 21 in 2010.
- Market Access sun-index rank: 67th in 2012;
- Border Administration sub-index rank 10th in 2012;
- Transport and communications infrastructure sub-index rank 29th;
- Business environment sub-index rank 25th
Summary: by WEF GETR we are not in top-10.
WEF publishes The Global Information Technology Report (GITR), here are ranks for 2013 for Ireland:
- Networked Readiness Index rank of 27th, deterioration from 25th place in 2012.
- Environment sub-index rank 15th in 2013, composed of Political and regulatory environment (rank 16th) and Business & Innovation environment (rank 24th).
- Readiness sub-index rank 16th in 2013, composed of Infrastructure and digital content (rank 16th), Affordability (rank 61st) and Skills (rank 12th).
- Usage sub-index rank 28th, composed of Individual Usage (rank 21st), Business Usage (rank 22nd) and Government Usage (rank 43rd).
- Impact sub-index rank 33rd, composed of Economic Impacts (rank 18th) and Social Impacts (rank 56th).
You can see the detailed results here: http://www3.weforum.org/docs/WEF_GITR_Report_2013.pdf
Summary: by WEF GITR we are not in top-10.
Forbes survey cites WSJ/Heritage Foundation Index of Economic Freedom as another source. This is linked here: http://www.heritage.org/index/country/ireland
WSJ/H 2013 Index of Economic Freedom ranks Ireland as 11th (not in top-10) and the index shows deterioration year/year in all sub-indices save one: Monetary Freedom (something that Ireland has no control over). There is a handy chart on the right on the linked page to show that Irish scores have declined in every year from 2009 through 2013.
But WSJ/H index is not the state-of-the-art index measuring economic freedom.
Instead, much stronger, methodologically and data-wise is the Economic Freedom of the World index published by Fraser Institute. Here's the link: http://www.freetheworld.com/release.html
Per EFN 2013,
- Ireland's overall rank is 15th in the world, which on a comparable basis represents the worst year since 1990. In 2012 report (2010 data) we were ranked 14th.
Summary: no, per Economic Freedom rankings we are not in top-10.
And so on…
I recently wrote in the Sunday Times that Ireland ranks 7th in the OECD in terms of start-ups actually being registered in the country. And that this data might be skewed by the fact that some start-ups registered here during the crisis period are really re-launches of businesses shut down due to pressures of the costs of 'upward-only' rent contracts. Other start-ups are various tax shells created by the MNCs and IFSC etc.
There are many reasons to treat all of the above rankings with a grain of salt. But the key point is: we are a good location for doing business and we are a good destination for FDI. But we are not top 1, nor even top 5. Which means that instead of glowing the bizarre lights of Forbes-like PR, we should be getting down to the painful and dirty business of real reforms.
PS: As Jamie Smyth of FT pointed out, the first time Forbes had Ireland as Number 1 country in its rankings was in 2007 - the same year when Oliver Wyman had Anglo Irish Bank as its World's Best Bank. I must also add, that whilst Forbes today says that Ireland is number 1 country because of lower labor costs and business costs, plus excellent monetary environment, back in 2007 we had sky-high labor costs and business costs, and rotten monetary and fiscal environments. So, apparently, Forbes' 'methodology' delivers identical outcomes on foot of diametrically contradictory data... hmm...
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