Ireland needs domestic investment in wake of Brexit
The National Competitiveness Council (NCC) has called for policies to be introduced that will ensure long-term fiscal sustainability in its annual report published on Thursday.
The NCC says that the Irish economy faces a number of external threats, and that the Government need to implement measures that can buffer the domestic economy against potential external shocks.
Regarding Britain’s decision to leave the EU, the annual NCC benchmark report notes the extensive challenges now facing Ireland: “The realignment of the deep inter-linkages between Ireland and the UK… brings into sharp focus the need for Irish based enterprise to step up their own productivity and innovation performance to compete in international markets and for Ireland's policy system to be agile in responding to the competitiveness challenges and opportunities of the UK outside the EU.”
The Council calls for an increase in investment that takes into account the actual condition of the public finances. The report emphasises the need to increase spending on the country’s infrastructure in the areas of roads, energy, water and broadband services.
Significantly, the report says the need to broaden the country’s export base has never been “more important in the context of Brexit and enhancing the competitiveness of our key clusters is critical, together with an ambitious external trade agenda.”
The condition of banks’ balance sheets is also raised, with the report expressing concern that “an overhang” of non-performing loans was hindering lending to firms. Concern was also expressed about the availability of alternative sources of finance for companies.
The need to develop talent in the areas of engineering and mathematics was also highlighted while the NCC stated that enterprises needed to engage with apprentice schemes in order to improve productivity and competitiveness.
The number of women in the workforce should also be increased by the provision of improved childcare services and by cutting the cost of returning to work.
The report stated that the improvement in Ireland’s competitiveness in the years 2011-2015 was a major reason behind the country’s economic revival.
The NCC noted that Ireland moved up nine places in the IMD World Competitiveness rankings in 2016 from 16th to 7th.
The report also calls for a concerted effort to meet Ireland’s commitments to reducing the carbon output in 2020 in accordance with its international obligations.