Sunday 4 December 2016

We're still competitive despite banking and budgetary problems

economy

Published 08/09/2011 | 05:00

IRELAND'S banks are among the worst in the world when it comes to getting loans and when it comes to general "soundness", according to the latest Global Competitiveness Report published by the World Economic Forum yesterday.

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Irish people rate their banks' soundness below citizens of war-torn Algeria or Burundi and notoriously corrupt countries such as Nigeria, the report says. Irish people also believe they are less likely to get a loan than respondents from Angola or Albania.

Despite these perceived problems, Ireland kept its ranking as the world's 29th most competitive country thanks to the quality of education, a relatively honest political system and well functioning labour markets. That ranking leaves Ireland below countries such as Malaysia and Saudi Arabia.

The report looks at dozens of factors and then calculates a final ranking.

Ireland came last out of 142 countries when it comes to budget deficits while the country's financial market also scored very badly, coming in at 115th place. It was placed seventh just three years ago.

While some of the metrics used in the report are factual, many more are subjective and depend on how respondents see their own country. For example, respondents in Trinidad and Tobago are happier with maths and science teaching than their Irish counterparts, but this does not necessarily mean that the teaching is better.

Ireland "continues to benefit from a number of strengths, including its excellent health and primary education and strong higher education and training, along with its well-functioning goods and labour markets", the report says.

"These attributes have fostered a sophisticated and innovative business culture."

Yet the country's macroeconomic environment continues to raise significant concern, with its budget deficit of more than 32pc in 2010, following the Government's bailout of the banking sector, placing Ireland last out of all 142 countries in the sample."

Switzerland remains the world's most competitive economy followed by Singapore and Sweden, the Geneva-based organisation finds. Finland comes next followed by the US, which slipped from a third place ranking last year. Germany was ranked at number six and the UK at number 10.

Ireland has been slipping down the rankings since the financial crisis. It was ranked at 25 two years ago and 22 three years ago.

"After a number of difficult years, a recovery from the economic crisis is tentatively emerging, although it has been very unequally distributed," said Klaus Schwab, of the WEF.

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