Banking system ‘least sound’ of 139 countries in world annual rankings

IRELAND’s ailing banking system is rated the “least sound” in the 139 countries assessed in the World Economic Forum’s (WEF) annual rankings.

Fri, 10 Sep, 2010 - 01:00

Joe Dermody

The WEF’s annual Global Competitiveness Report 2010/2011 rates Ireland as 117th in terms of ease of access to loans, 130th for the Government’s budget balance, and 128th for its flexibility of wage determination.

In terms of overall competitiveness, Ireland is ranked 29th, down from 25th last year and 22nd two years ago. The report says that Ireland’s decline is due to “a weakening macroeconomic environment as well as continuing concerns related to financial markets”.

The survey cites access to finance and inefficient government bureaucracy as the main hurdles to doing business in Ireland. The country’s macroeconomic stability is rated 95th, compared with 45th last year and seventh two years ago.

However, the report paints a more positive picture of Ireland in relation to services such as health (10th), primary education (10th), higher education and training (23rd), business sophistication (20th) and innovation (22nd). Ireland’s infrastructure is now 33rd, up from 52nd last year.

Other positives include Ireland’s well functioning markets for goods (14th) and labour (20th). The country’s strength of investor protection (5th) also sends out a strong signal to potential foreign investors.

Improved rankings in these areas augur well for Ireland’s ability to navigate its way out of trouble.

As Dr Eleanor Doyle, senior lecturer in UCC’s Department of Economics, explains: “The worst performances were in terms of macroeconomic and financial, but in terms of our business sophistication and our market performance, we are holding our own.

“Under that pillar, we do worst in terms of our control over international distribution. The multinationals based here obviously do well in this area, but we really need to improve the access to international markets of our indigenous businesses.

“In terms of innovation, where we’re ranked 22nd, we’re doing well. Here, however, our national Government needs to perform better in its tendering and investment in advanced technologies.”