By Geoff Percival and Eamon Quinn
Ireland’s competitiveness has significantly deteriorated over the last 12 months, according to the International Institute for Management Development (IMD).
Ireland has slipped six places, to 12th, in the Swiss business school’s latest annual world competitiveness rankings. The IMD marked Ireland down on each of its four main measurement metrics — the country falling seven places to 11th for economic performance; dropping four spots to 13th for government efficiency; seven places to 10th in terms of business efficiency; and slipping two spots to 21st for infrastructure.
In terms of attractive aspects, Ireland ranked highly for its tax regime, skilled workforce and business-friendly environment.
However, the IMD warned exchange rate volatility, monetary tightening by the ECB and Brexit all pose near-term challenges to Irish competitiveness; adding that public and private investment in infrastructure must be enhanced.
The five most competitive world economies remained unchanged in the latest list, although their order changed slightly — the US improving three places to first and Hong Kong slipping into second. Singapore remains third, followed by the Netherlands and Switzerland.
Meanwhile, a Central Bank study revealed for the first time the threat from Brexit from the additional red tape costs firms face from so-called non-tariff barriers or documentation and border delays.
Researchers Stephen Byrne and Jonathan Rice put the costs of non-tariff barriers at a 9.6% decline in trade between the UK and Ireland.
Exports of fresh foods, machinery and transport equipment, and manufacturing materials would be the worst hit, the study finds.
“Whilst the research focuses on a pessimistic scenario, it is vital that we understand and flag the risks to trade. The potential effect of tariffs following the UK’s departure from the customs union is well documented, but the impact of non-tariff barriers has received less attention, despite existing research that finds customs delays to be one of the largest of all barriers to trade,” said the Central Bank economics director Mark Cassidy.
He said it was clear “that the potential effect of Britain’s decision to leave the EU would be negative and significant for Irish-UK trade.