FDI in IRELAND

1. FDI and IRELAND’S TIGER ECONOMY
• MANOJ KUMAR
• SHASHANK SHARMA
• SHASHANK S TIWARI
• SHASHANK TYAGI
• SHASHWAT SHEKHAR
• SUKANT CHATURVEDI
• TARUN K GOYAL

2. EARLY PROSPECTS
• Underdeveloped infrastructure, basic facilities lacking
• High unemployment and emigration
• Non existent manufacturing sector
• Agriculture based economy, largely dependent on trade from UK
• Education sector in bad condition

3. Fifties and Sixties
• The Finance Act of1956 introduced EPTR
• Joined IMF and World Bank and relaxed restrictions on Control of
Manufacturers Act
• Unilaterally lowered tariffs to encourage foreign investments
• Ango-Irish Free trade Agreement was concluded
• Ireland joined GATT

4. Role of Industrial Development Authority
• Formed to attract new investments, in accordance with the favourable export focused
industrial strategy
• Targeted Irish-Americans. ( Phizer-John Mulchay)
• Over 10 years 450 companies negotiated
• Selection Criteria -
• Basic and Social economic criteria
• Best chances of commercial and economic stability
• High dependence on scarce human resources
• Take advantage of natural resources to conserve other resources

5. Seventies
• Growing foreign investment
• Oil Crisis Oct 1973
• High unemployment
• New government continued the trend of deficit spending
• Native industry not growing

6. 80’S
• Deficit 12% of GDP in early 80s
• Unemployment over 17%
• Macroeconomic crisis discouraged firms like AT&T & Black and Decker
• 22mn Irish Pounds debt
• Curbing public sector expenditure was the government’s main agenda
• PNR introduced in 87

7. UNLEASHING THE TIGER
• GDP growth rate reached 8.5%
• Propelled by American IT boom in the early nineties
• Export sector became more competitive by joining EMS
• IDA was able to lure target companies (INTEL)

8. Advantages of FDI in Ireland
• Played a vital role in facilitating Ireland’s transition from primarily a protectionist
economy in the 1950s
• Leading exporter in sectors including, technology, pharmaceuticals
• Expenditure on Irish goods and services.
• Introduction of EPTR sent a strong message to IMF and World bank.
• By 1970 companies like Gillette- Braun, Digital, Cross Pens were established
• American IT boom in 1990s

9. Advantages of FDI in Ireland
• IDA through PNR brought labor intensive industries to decrease
unemployment.
• FDI resulted in low debt to GDP ratio and curbed deficits.
• Integration of European market in 1992.
• Employment opportunities offered by Intel
• Presence of HP, Dell, Gateway.

10. Disadvantages of FDI in Ireland
• In spite of growth rate of 4%, Unemployment, poverty were plague.
• High dropout rate was prevalent
• Throughout export focused.
• Foreign firms accounted for 1/3rd of industrial employment.
• High borrowing to increase welfare spending.
• EEC combined with tariff reduction resulted into high competition.
• Unemployment surged to 17% in 1982.

11. Disadvantages of FDI in Ireland
• During 1990s unemployment was still at 16%
• Huge gap between GDP and GNP
• Economic crises hit Ireland hard.
• Celtic Tiger because of US Economy?
• Transfer Pricing

12. Conclusions
• Ireland should continue to be a part of European Union.
• Ireland’s economy may be trapped in stagflation.
• Should look to boost investment in Education.
• Foreign Companies should aid in development of infrastructure.
• Diversified companies should be invited for FDI.

13. • THANK-YOU