Whistling past the graveyard

Schuhart

http://www.finfacts.com/irelandbusinessnews/publish/article_10006332.shtml
 Foreign companies were responsible for 87% of Irish exports in 2005
 Dell and Intel are Ireland’s biggest exports
 Irish investors ploughed €30 billion into local and overseas commercial property in the past 5 years
 Investment of €133m has been made in 75 Enterprise Ireland supported companies since 2001
 One in five Irish private sector workers are dependent on construction and more than 100,000 will become unemployed within 10 years
 No Irish-owned company has floated on the Nasdaq Stock Exchange since 1999
 Most workers in Irish-owned companies have no occupational pension
 The Irish Government awarded special pay increases to all current and retired public sector workers, including politicians, in return for a benchmarking performance system. Targets introduced are basically unmeasurable and aspirational
 William Prasifka, the chairman of the Competition Authority, recently said that “in too many areas, Ireland has not willingly embraced competition
 New Irish housing units are among the most expensive and the lowest quality in the Developed World
 Since the end of 2003, output per worker in Ireland has been almost static
 Most foreign companies will have relocated from Ireland by 2025
In 1970, Ireland's national debt was as healthy as it is now: just ten years later it was one of the worst in the world

I’m a bit of a glutton for this kind of thing. But I think this article does manage to bring together most of the things out there that we are doing little to address chiefly because there's something about the political system that makes it hard to address these issues (I think that something is a large portion of the voting electorate being gob****es who allow their attention to be distracted onto things that don't really matter in the greater scheme of things, but I'll admit I can't post up a link that proves this conclusively). I find the conclusion particularly apt.

Cassandras are seldom welcome during partytime and while the aftermath may not follow Louis XIV’s après moi, le deluge prediction, as we head to stormier waters, we will surely wonder why so little was done, when we had an unprecedented period to set the foundations for more challenging times.

Put another way, I can sort of picture people blinking with incomprehension as the circus leaves town. Yet, clearly, some people do see these dangers as real. I think the point of interest is why these concerns are not more central to political debate. I mean, at the end of the day, what of it if Harney is or isn't leader of the PDs? Who gives? Our massive dependance on a few foriegn firms continuing to locate here remains regardless.

MrJones

ya i think the irish economy is a little unbalanced to say the least.
i cringe when i heard someone say to me the other day-"this country is great because you can just walk into a job". Cant' help but think we are heading for hard times.

bonkey

Reading this made me think of somethign I heard recently. This isn't the exact quote, nor do I remember who exactly made it but...

Economists have successfully predicated 11 of the last 3 recessions.

Aidan1

think that something is a large portion of the voting electorate being gob****es who allow their attention to be distracted onto things that don't really matter in the greater scheme of things, but I'll admit I can't post up a link that proves this conclusively

Don't have a link per se but there's a lot of academic evidence to suggest that political inertia here is largely down to PR-STV and its role in handing over particular power to interest groups/local concerns.

The article is interesting and worth a read, but doesn't really add much to the commentary apart from an almost comedic element of hysteria (the sky is falling!). Apart from the suggestion on pensions, which isn't exactly new or astoundingly innovative, there's no real remedies in there either. More competition? Gee whiz! Who knew?

Our dependence on highly mobile foreign capital has been a concern for years (the statement that they'll all be gone by 2025 is pure scaremongering though, as it was in its original source also), but in the absence of other sources of employment, no one has yet to produce an alternative. Subsidise local industry I hear you say? What about competition?

Schuhart

If there is a recession around the corner, its too late to do anything about it. What I think is more at issue is continuing a vulnerability when maybe, just maybe, we could be doing something else.


I’m not confident that the dependency on the foreign sector really does penetrate public debate. Partly, I think it’s because even people working for the exporting sector in Ireland are usually just employees of subsidiaries. The real strategic decisions are made elsewhere, but many of us are hardly even aware of the implications of that.

That said, maybe there’s nothing we can do about it. Our revealed preference is to put money into property, so the likehood of Ireland becoming a hotbed of entrepreneurs seems remote. Incidently, I don’t see domestic competition as being particularly relevant in this context. Yes, high domestic costs can and do have an impact on Ireland’s general competitiveness. But, mostly, competition on the domestic market is a consumer thing.

The real question as I see it is what options are open to us (if any) to plot a course that involves a few Irish based companies becoming significant global players at anything at all.

Jackie laughlin

This thread is most welcome. If you've time, have a look at "Littelfuse Closed"; someone with direct experience of what is happening. Have a look too at the debate about investing massively in the creation of research Ph.Ds.as if we were still an expanding trading econmy The country seems to think that nothing has changed in the very recent past; we are blinded by cranes!

Schuhart

I agree with a lot of your perspective. We need to sell our arses abroad in some way, whether it amounts to selling goods or services. In recent years we've stopped being able to do this so well.

I also accept that the idea of upskilling has risks - the most obvious being that, even if we manage to produce some decent Phds, maybe they'll just up and leave for elsewhere. But, also, its not as it there's anything special about Ireland. If you want lots of cheap qualified people, you'll just go to India or China anyhow.

But I'd equally query how we can stay in manufacturing and, in particular, I would wonder if its really feasible to have a strategy that amounts to screwing computers together for Dell forever. It reminds me a little of a comment from a regional campaigner in Donegal a few years ago who demanded that Government should provide jobs 'in industries producing goods for which there will always be a demand', without making any effort to suggest what those industies were or why they would particularly choose to locate in Ireland, never mind Donegal.

I know this probably isn't what you mean - but that was my initial reaction to what you are saying.

Gurgle

Foreign companies were responsible for 87% of Irish exports in 2005
Manufacturing by foreign companies in Ireland is still a major part of the economy in 2005, despite warnings that they would all be gone by now

Dell and Intel are Ireland’s biggest exports
Two of the world's major computer giants operate their european bases in Ireland

Irish investors ploughed €30 billion into local and overseas commercial property in the past 5 years
Irish investors have / have access to loads of money

Investment of €133m has been made in 75 Enterprise Ireland supported companies since 2001.
If you want to set up a company in Ireland, there are enormous grants available

One in five Irish private sector workers are dependent on construction and more than 100,000 will become unemployed within 10 years
will they now?, says who? John Titor?

No Irish-owned company has floated on the Nasdaq Stock Exchange since 1999
why would they?

On 6 June 2000, the ISE closed its famous trading floor in Anglesea Street, Dublin 2, and switched to an electronic trading platform

Most workers in Irish-owned companies have no occupational pension
Gonna need a source to back up a statement like that.

The Irish Government awarded special pay increases to all current and retired public sector workers, including politicians, in return for a benchmarking performance system. Targets introduced are basically unmeasurable and aspirational
same as the targets for every target-based pay scheme except a sales rep's

William Prasifka, the chairman of the Competition Authority, recently said that “in too many areas, Ireland has not willingly embraced competition
Its pretty much his job description to say that

New Irish housing units are among the most expensive and the lowest quality in the Developed World
Most expensive? yes, lowest quality? sez who? homebond begs to differ.

Since the end of 2003, output per worker in Ireland has been almost static
measured how, and how 'almost' static?

Most foreign companies will have relocated from Ireland by 2025
which is why they're setting up / expanding

In 1970, Ireland's national debt was as healthy as it is now: just ten years later it was one of the worst in the world
And 10 years after that the 'Celtic Tiger' economy was known worldwide, so maybe the old national debt was a good investment?

So in a nutshell, we're in great shape and barring a global recession we're likely to stay that way.

Gurgle

Jackie laughlin wrote:

investing massively in the creation of research Ph.Ds.as if we were still an expanding trading econmy

Its almost as if high standards of education and specialization would somehow put the country in a better economic situation in the future.

Jackie laughlin

This is easily the best thread going right now.

There is a debate between those who think that everything in "the Celtic Tiger" is fine and that we must move on up to the next phase and those who are looking at empty factories (particularly in the west, especially Donegal) and the decline in production tradable goods (I'm avoiding the use of the term "manufacturing" as it can be interpreted very narrowly.) and seeing deep trouble in need of urgent attention.

I take the second view. There are many examples of national and regional recessions without worldwide recession. Moreover, we have now reached a level of prosperity that a recession will not plunge the Irish people into poverty but it will plunge SOME of our people into poverty and worsen our deplorable level of inequality.

Irish development was achieved by marketing Ireland and the Irish as productive, educated, creative, hard-working and cheap, in a stable economy. Investment could have gone elsewhere but the Irish package was good, especially the marketing. Others have studied the Irish achievement and are immitating it. Ireland needs a response.

Irish capital tends to be obsessed with property and policies have encouraged that obsession. Building is productive but it has its limitations. Ireland today is over-reliant on building - to put it mildly.

I wish I could give the comprehensive answer required but I must admit that I've only very recently realised the problem and the extent of it. At this stage I can do no more than appeal for realism. I'll certainly continue to study the problem. What bothers me particularly now is that we have Government, media, academia, interest groups, elites living a delusion.

ballooba

Gurgle wrote:

Foreign companies were responsible for 87% of Irish exports in 2005
Manufacturing by foreign companies in Ireland is still a major part of the economy in 2005, despite warnings that they would all be gone by now

Dell and Intel are Ireland’s biggest exports
Two of the world's major computer giants operate their european bases in Ireland

Many of my frends who work for Dell in Cherrywood or IBM in Blanch they me that they are very worried about their jobs. A friend who recently moved to Dublin from Limerick had been renting out her place in Limerick, she has now sold her house because she is uncertain about the future of Dell in Limerick. If Hewlett Packard or Intel left Leixlip the town would be screwed overnight, people in Leixlip are acutely aware of this.

As we have been witnessing over the last couple of weeks in equity markets, alls it takes is for people to be a little less confident and a lot of people lose a lot of money.

Gurgle wrote:

Irish investors ploughed €30 billion into local and overseas commercial property in the past 5 years
Irish investors have / have access to loads of money

The people who have money aren't the problem, the people who have access to money are a problem. What happens when they have negative equity on their property and can't afford to sell.

Gurgle wrote:

Investment of €133m has been made in 75 Enterprise Ireland supported companies since 2001.
If you want to set up a company in Ireland, there are enormous grants available

That's not the point. Billions of euro has been invested in properrty while only €133m has been invested in indigineous Irish companies involved in export. From talking to friends involved in entrepreneurial activites they tell me that builders have become obsessed of late with diversification and hedging their bets. All of the guys I know are involved Small/Medium IT business and all know at least two large builders who want to invest in their companies.

Gurgle wrote:

One in five Irish private sector workers are dependent on construction and more than 100,000 will become unemployed within 10 years
will they now?, says who? John Titor?

Well if you think that demand for housing is never going to be satisfied in our tiny island then you go ahead and get another mortgage, actually take three.

Gurgle wrote:

No Irish-owned company has floated on the Nasdaq Stock Exchange since 1999
why would they?

Are you comparing the Nasdaq to the ISE? :eek:

Gurgle wrote:

Most workers in Irish-owned companies have no occupational pension
Gonna need a source to back up a statement like that.

We have an ageing population with roughly only half of Irish workers having a non state pension.

Gurgle wrote:

The Irish Government awarded special pay increases to all current and retired public sector workers, including politicians, in return for a benchmarking performance system. Targets introduced are basically unmeasurable and aspirational
same as the targets for every target-based pay scheme except a sales rep's

Except everyone else's pay is based at least on how well their company is doing. I the company is not doing well then we will not be getting pay rises.

Gurgle wrote:

New Irish housing units are among the most expensive and the lowest quality in the Developed World
Most expensive? yes, lowest quality? sez who? homebond begs to differ.

Homebond is a load of Bull. It's an Irish organisation, so what does it benchmark it's quality against only irish construction. Have you actually looked at the quality of a Homebond home or tried to claim under the warranty it offers.

Gurgle wrote:

Since the end of 2003, output per worker in Ireland has been almost static
measured how, and how 'almost' static?

Look at the balance of trade.

Gurgle wrote:

Most foreign companies will have relocated from Ireland by 2025
which is why they're setting up / expanding

Who's setting up here? The biggest news I hear of companies coming here is India companies setting up local bases to offshore work to India. Plus, banks to loan us more money to buy more property.

ronbyrne2005

of the 270k new jobs created since 2001 only 9k have been in the IDA supported sector. Multinationals are primarily here NOW because of the low tax rates,but when the tax benefits are outweighed by lower costs in eastern europe/asia they will be gone.Exports are all from multinationals and even the levels of exports are rising by more than inflation.
Some people really have their heads in the clouds on this matter,stormy waters lie ahead.

Gurgle

The facts are facts, but their interpretation is up for discussion.

ballooba wrote:

Many of my frends who work for Dell in Cherrywood or IBM in Blanch they me that they are very worried about their jobs.

Thats pretty much the strategy of all multinational corporations in my experience. Employees who are worried about their jobs are grateful to have them and less pushy about pay-rises, bonuses, working conditions etc.

ballooba wrote:

A friend who recently moved to Dublin from Limerick had been renting out her place in Limerick, she has now sold her house because she is uncertain about the future of Dell in Limerick.

Cashing in substantially on her investment I hope.

ballooba wrote:

If Hewlett Packard or Intel left Leixlip the town would be screwed overnight, people in Leixlip are acutely aware of this.

if if if

ballooba wrote:

The people who have money aren't the problem, the people who have access to money are a problem. What happens when they have negative equity on their property and can't afford to sell.

How much would prices have to drop for a significant number of people to be left with significant negative equity?

ballooba wrote:

Billions of euro has been invested in properrty while only €133m has been invested in indigineous Irish companies involved in export.

With the tiger economy, we've seen a situation where the majority of people are doing well out of PAYE sector work and are less inclined to take the stress and risk of setting up their own manufacturing companies. If and when we see a drop in real-terms salaries, we'll see more people willing to invest in business start-ups again.

ballooba wrote:

From talking to friends involved in entrepreneurial activites they tell me that builders have become obsessed of late with diversification and hedging their bets.

Thats just smart, under any economic conditions

ballooba wrote:

All of the guys I know are involved Small/Medium IT business and all know at least two large builders who want to invest in their companies.

tbh, I expect to see the small/medium IT business going bust long before the builders.

ballooba wrote:

Well if you think that demand for housing is never going to be satisfied in our tiny island then you go ahead and get another mortgage, actually take three.

Now you're just being stupid.
There are much more secure investments than housing. Not many which will return the same money as houses did in the last 15 years, but many with more security for the next 15 years.

ballooba wrote:

Are you comparing the Nasdaq to the ISE? :eek:

Since the ISE became electronically operated, shares of their listed companies can be bought and sold worldwide as easily as though they were on the Nasdaq. There is no advantage to going on Nasdaq.

ballooba wrote:

We have an ageing population with roughly only half of Irish workers having a non state pension.

A 'pension plan' as such is becoming a thing of the past. Many people now go with investing in a retirement fund, or a direct investment in e.g. a second house.

ballooba wrote:

Homebond is a load of Bull. It's an Irish organisation, so what does it benchmark it's quality against only irish construction. Have you actually looked at the quality of a Homebond home

Yes, I live in one.

Just because its Irish means its crap?
But your whining that we're screwed because there aren't enough Irish companies manufacturing and exporting.

You're trying to talk the country into a recession. There have been thousands like you for the last 10 years, and they were all wrong.
The economy is still out-performing expectations, house prices keep going up, foreign investments are still strong.

Don't worry, there'll be thousands more like you in the next 10 years too, and when there is finally a recession, they're best contribution will be 'I told you so'. :rolleyes:

Of course there will be a recession sooner or later, and the people who invested last are going to lose money, whether in housing, sheet metal fabrication, car dealerships, restaurants or whatever.

The trick is not to be in the last group joining the bandwagon.

Gurgle

ronbyrne2005 wrote:

when the tax benefits are outweighed by lower costs in eastern europe/asia they will be gone.

And with all the multinational corporations setting up in eastern europe/asia, they're salarys will go up, there'll be a lithuanian tiger economy for a few decades with massive increases in house prices and then loads of Joe Soaps will start banging on about how unsustainable it is and how the multinationals are all off to Africa in the morning.

ronbyrne2005 wrote:

stormy waters lie ahead.

Stormy waters always lie ahead.
Thats as certain as the sun rising in the morning.

The only questions are how stormy and how far ahead.

And for all the horsesh`it floating around about over-heated economies, dependancy on housing etc etc, nobody knows.

We'll find out.
It doesn't look too bad from where I'm sitting.

bonkey

bonkey wrote:

Economists have successfully predicated 11 of the last 3 recessions.

LoL at that.
I'm minded of the RTÉ economics correspondent George Lee who if I was his producer,would have the Russian death march playing in the background each time he reports on something...he seems to me that fond of scraping for bad news

Jackie laughlin

It doesn't look too bad from where I'm sitting either but that's not the point. How does it look if you've been let go from a company relocating eastwards or southwards and there is no sign of alternative employment?

There's no question of talking ourselves into a recession. The Irish economy is already in deep trouble. Anyway, we have achieved a level of prosperity in which recession will mean nothing for many, advantage for some but misery for others - perhaps a small minority.

Look at Mexico. A rich ruling class and a prosperous middle class living in a pallell society and economy to the poor.

If economic inequality doesn't matter to you or indeed if you consider it a virtue, then a decline in Ireland won't matter to you.

Schuhart

Jackie laughlin wrote:

What bothers me particularly now is that we have Government, media, academia, interest groups, elites living a delusion.

I think you could add pretty much everyone to that list. Part of the reason is, ironically, we are insulated from the decisions that actually determine our level of exports. Dell and Intel are taking a global view of what they need to do, but we know next to nothing about that process. The employees of their Irish operations just know they have to turn up and put in a days work. Ryanair is the only example I can think of involving a (reasonably) new Irish company thinking ‘how do I sell my arse all over Europe’.

Gurgle wrote:

There is no advantage to going on Nasdaq.

You’ll have picked up implicitly that I feel your post evades rather than addresses the issues. Rather than go through each line, and lose everyone’s interest, I just want to focus on this single point. Suggesting that listing on the ISE is much the same as Nasdaq simply does not hold. ISE has far less liquidity. In any event, we have not seen new, indigenous Irish start-ups and we don’t really have a global focus despite our dependence on international trade. The people who work in our multinational subsidiaries by and large are not gaining experience that will be of any use in a downturn. The employees of Intel would not collectively have the skills to run a competing enterprise, as it is simply a manufacturing plant with no substantial involvement in the strategic direction of Intel. Cut off from their parent, they would just sit there waiting for someone else to tell them what they should be doing.

As a comparator, consider the closure of Fruit of the Loom in Donegal. The staff made redundant can essentially only wait for some else to give them a job. If anything, they’ve been deskilled as they are unable to function on their own initiative.

Earthman wrote:

I'm minded of the RTÉ economics correspondent George Lee who if I was his producer,would have the Russian death march playing in the background each time he reports on something...he seems to me that fond of scraping for bad news

The issue is less about there being an immediate recession. As I said already, if there is one its too late to do anything about it. It has more to do with us failing to address a strategic weakness – and, to a great extent, even failing to notice it exists.

Jackie laughlin

[As a comparator, consider the closure of Fruit of the Loom in Donegal. The staff made redundant can essentially only wait for some else to give them a job. If anything, they’ve been deskilled as they are unable to function on their own initiative. The issue is less about there being an immediate recession. As I said already, if there is one its too late to do anything about it. It has more to do with us failing to address a strategic weakness – and, to a great extent, even failing to notice it exists.[/QUOTE]


Quite!

Gurgle

Jackie laughlin wrote:

How does it look if you've been let go from a company relocating eastwards

Looks good tbh, company shutting down, moving production to an existing plant in Singapore. I'm finished in 2 weeks and am planning to set up my own manufacturing company with the investment of my redundancy & as much grant aid as I can get my hands on.

Jackie laughlin wrote:

and there is no sign of alternative employment?

But that is not the case, and theres no sign of it becoming the case in the forseeable future.

Jackie laughlin wrote:

The Irish economy is already in deep trouble.

No, its not.

Jackie laughlin wrote:

we have achieved a level of prosperity in which recession will mean nothing for many, advantage for some but misery for others - perhaps a small minority.
Look at Mexico. A rich ruling class and a prosperous middle class living in a pallell society and economy to the poor.

Ireland is a world apart from Mexico in every possible way. We are a first world socialist republic in western europe, with a standard of education to rival any other country on earth and an infrastructure which is (slowly and expensively) finally coming up to par.

Jackie laughlin wrote:

If economic inequality doesn't matter to you or indeed if you consider it a virtue, then a decline in Ireland won't matter to you.

Take your head out of your ass.
Do you actually know anything about the Irish society or economy?
Do you even work for a living?

ISAW

Foreign companies were responsible for 87% of Irish exports in 2005

But the largest part of the Irish economy isnt exports currently. It is construction!

Dell and Intel are Ireland’s biggest exports

Dell could go anywhere but Intel have a research base which is rooted in i.e. difficult to move.

Irish investors ploughed €30 billion into local and overseas commercial property in the past 5 years

Much of the property is personal and SME. Not a lot is Irish Trans National corporations buying up property abroad. But in any case FDI floated the Celtic Tiger so we should grow and eventually invest our FDI into "foreign" countries.

Investment of €133m has been made in 75 Enterprise Ireland supported companies since 2001

this is SME investment. SME are tomorrows big business. But as I have said elsewhere venture capital is better employed on existing enterprise rather than as seed or startup money.

One in five Irish private sector workers are dependent on construction and more than 100,000 will become unemployed within 10 years

I doubt this is true. Maybe "of the Irish workforce" but not "Irish" workers.

No Irish-owned company has floated on the Nasdaq Stock Exchange since 1999

TNC's do not owe allegiance to any State.

Most workers in Irish-owned companies have no occupational pension

But the employers under law now have to offer one.

The Irish Government awarded special pay increases to all current and retired public sector workers, including politicians, in return for a benchmarking performance system. Targets introduced are basically unmeasurable and aspirational

Yes.True. So? Public service is overpaid particularly at the high pay end of the scale? Tell us something we dont know.

William Prasifka, the chairman of the Competition Authority, recently said that “in too many areas, Ireland has not willingly embraced competition

True. But "not willingly" does not mean "not". The protectionist "state job for life" attitude is waning however.

New Irish housing units are among the most expensive and the lowest quality in the Developed World

True . Blame the yuppies who pay silly sims for property and the developpers who fleece us. Oh and the construction fiorms who do scant R and D and lash up boxes.

Since the end of 2003, output per worker in Ireland has been almost static

How is output measured? In the reference supplied is the claim that benchmarking was not transparent.

Most foreign companies will have relocated from Ireland by 2025

And Irish companies will also use their FDI to employ foreign people elsewhere. As the US TNCs are currently doing.

In 1970, Ireland's national debt was as healthy as it is now: just ten years later it was one of the worst in the world

all the more reason to cut the public sector pay bill.

I’m a bit of a glutton for this kind of thing. But I think this article does manage to bring together most of the things out there that we are doing little to address chiefly because there's something about the political system that makes it hard to address these issues ...

Not really. Where ther is a will and knowledge of the problems and opportunities there is a way.

Yet, clearly, some people do see these dangers as real. I think the point of interest is why these concerns are not more central to political debate. I mean, at the end of the day, what of it if Harney is or isn't leader of the PDs? Who gives? Our massive dependance on a few foriegn firms continuing to locate here remains regardless.

But the srtategy is to "move up the value chain" i.e. get Irish SMEs to develop. It isnt a few firms . Of the twelve or so Giants of the pharmachem industry ten of them have EU HQs in Ireland.

Mind you I argee with most of the sentiments expressed in the finfacts article.

Schuhart

Gurgle wrote:

Jackie Laughlin wrote:

The Irish economy is already in deep trouble.

No, its not.

To be clear, I don’t thing the point is whether the sky will fall tomorrow. It is just our continuing dependence on foreign firms is a strategic weakness that needs to be addressed.

Gurgle wrote:

with a standard of education to rival any other country on earth.

Earth includes everywhere from Sweden to Burundi. For what its worth, this suggests that no Irish university is rated in the global top 200, which suggests there are plenty of places ahead of us.

Gurgle wrote:

an infrastructure which is (slowly and expensively) finally coming up to par

I’m not sure this judgement is a correct reading of the situation. There’s an amount of road building. But our main airport is hardly up to par, there’s reports of problems with port capacity and while the rail network has improved a bit, a great deal of the investment is still to come. What we have put money into is housing in somewhat inconvenient locations, at home and abroad.

bonkey

ballooba wrote:

What happens when they have negative equity on their property and can't afford to sell.

My guess is that they continue to pay their mortgage and don't sell the house.

If they're in it for an investment and aren't willing to take a loss, and haven't considered the possibility, then they deserve what they get quite frankly. In fact, the sooner such people lose their shirts, the better as far as I'm concerned.

If, on the other hand, they fall into the latter category (the "I want to own my own house" crowd") then they had already comitted to paying the purchase price when they bought in. That the house can no longer sell for that doesn't matter.

Then there's people who weren't in it for an investment, and can't afford to keep their mortgage because their salary has also taken a knocking. These people have some sympathy from me, but again I'd ask them whether or not they considered this before getting into stupid amounts of debt.

At the end of the day, anyone who puts that much money/debt on the line without considering the time-frame and the risks is owed nothing by society when those risks come back and bite them in the ass.

mhenness

ballooba wrote:

Who's setting up here? The biggest news I hear of companies coming here is India companies setting up local bases to offshore work to India. Plus, banks to loan us more money to buy more property.

Odd, I thought Intel just expanded their operations here making a 2bn euro investment? How about Wyeth, another multi billion euro investement. Also, if banks are setting up to lend us money, why would they do that unless they thought that we had a good chance of paying it back. Mortgages last 20-30 years at least. If they lend us money and it all goes belly up then they will get burnt too. What companies from India are setting up here simply as a base for outsourcing? If it is the case then it is no different to any other European country.

ronbyrne2005

mhenness wrote:

Odd, I thought Intel just expanded their operations here making a 2nb euro investment? How about Weyth, another multi billion euro investement. Also, if banks are setting up to lend us money, why would they do that unless they thought that we had a good chance of paying it back. Mortgages last 20-30 years at least. If they lend us money and it all goes belly up then they will get burnt too. What companies from India are setting up here simply as a base for outsourcing? If it is the case then it is no different to any other European country.

intel and a few others are the exception to the rule,in the ida supported sector which includes all the multinationals they have created close to zero net new jobs since 2001 while the rest of the economy has created 270,000 although they are mainly in construction and civil service.
Banks are happy to still lend as mortgages are currently 120billion but theres enough money in economy to repay this even in the face of a downturn. They have a vested interest and feel they have to keep lending to keep shareholders happy and keep the property market afloat,if they stopped lending tomorrow the market/economy would collapse ,they are in a no win situation and can only hope things wont be as bad as some people think.

ISAW

ronbyrne2005 wrote:

intel and a few others are the exception to the rule,

so now rather than "NO TNCs are creating jobs or invisting here" it is "SEVERAL TNCs are investing here" . does that not take all the punch out of the original argument?

in the ida supported sector which includes all the multinationals they have created close to zero net new jobs since 2001

can you support that with some evidence?

while the rest of the economy has created 270,000 although they are mainly in construction and civil service.

This isnt true! I posted the figures from 1998 - 2005. Ther are substantial n8umbers of jobs created in "other services" and in financial services for example.

Banks are happy to still lend as mortgages are currently 120billion but theres enough money in economy to repay this even in the face of a downturn. They have a vested interest and feel they have to keep lending to keep shareholders happy and keep the property market afloat,if they stopped lending tomorrow the market/economy would collapse ,they are in a no win situation and can only hope things wont be as bad as some people think.

This just is NOT how banks think at all! Banks want a safe bet for the long term. Yes they will put a bet on an entrepreneur for maybe 100 million say but the vast bulk of their money is in safe bets. Look at their portfolio management of the SSIAs for example. This is SAVED aand not LENT money i.e. it is what THEY would do with money.

and the reason they are lending money is for just that reason. Money is in supply. The country is awash with it! And intrest rates are low. Thats why houses (in demand) have high prices. If and when the housing supply is reached (in about 6 years I guess at current rates since we are building more than the UK) then prices of houses might well collapse. so what? the money will still be there!

mhenness

ronbyrne2005 wrote:

intel and a few others are the exception to the rule,in the ida supported sector which includes all the multinationals they have created close to zero net new jobs since 2001 while the rest of the economy has created 270,000 although they are mainly in construction and civil service.
Banks are happy to still lend as mortgages are currently 120billion but theres enough money in economy to repay this even in the face of a downturn. They have a vested interest and feel they have to keep lending to keep shareholders happy and keep the property market afloat,if they stopped lending tomorrow the market/economy would collapse ,they are in a no win situation and can only hope things wont be as bad as some people think.

Of course things would go down if banks didn't lend. This this the same in any country. Banks only lend when they feel it is a good bet they are pretty sure they will make it back with plenty of interest. I don't think there is a real question that things will stay as economically buoyant as they are now and at some point we may have some pain to go through in readjusting to a new economic reality. I think as long as we continue to concentrate on creating good quality people who can drive things forward, companies (Irish and foreign) will be interested in investing in Ireland. We can't simply sit there and hope that prosperity will come our way. It won't. We have to be strategic, pragmatic and innovative and we can't expect our government to do all of those things for us. That said I think they do need to be all of those things in the areas for which they have responsibility. They also have a responsibility to set an example for the people of the country. I think they are doing this in areas such as research where they are really trying to raise awareness among Irish companies of how important it is to innovate. If we learn to make innovation a part of the fabric of the Irish way of doing business I can almost guarantee you we will never see a poor day in the future.

ballooba

Gurgle wrote:

But your whining that we're screwed because there aren't enough Irish companies manufacturing and exporting.

It's not just manufacturing companies that export.

Gurgle wrote:

You're trying to talk the country into a recession. There have been thousands like you for the last 10 years, and they were all wrong.
The economy is still out-performing expectations, house prices keep going up, foreign investments are still strong.

Don't worry, there'll be thousands more like you in the next 10 years too, and when there is finally a recession, they're best contribution will be 'I told you so'. :rolleyes:

No, my contribution is that I currently work with one of the largest indigineous Irish exporters. No, we don't do any manufacturing.

Also, I hope to start my own business in the next ten years hopefully with Enterprise ireland funding and exporting and not involved in manufacturing.

ballooba

Gurgle wrote:

Yes, I live in one.

Just because its Irish means its crap?

No, the fact that standards are generally low in Ireland and that Irish construction is all that Homebond has to benchmark properties against means it's crap.

ronbyrne2005

ISAW wrote:

so now rather than "NO TNCs are creating jobs or invisting here" it is "SEVERAL TNCs are investing here" . does that not take all the punch out of the original argument?



can you support that with some evidence?


This isnt true! I posted the figures from 1998 - 2005. Ther are substantial n8umbers of jobs created in "other services" and in financial services for example.




This just is NOT how banks think at all! Banks want a safe bet for the long term. Yes they will put a bet on an entrepreneur for maybe 100 million say but the vast bulk of their money is in safe bets. Look at their portfolio management of the SSIAs for example. This is SAVED aand not LENT money i.e. it is what THEY would do with money.

and the reason they are lending money is for just that reason. Money is in supply. The country is awash with it! And intrest rates are low. Thats why houses (in demand) have high prices. If and when the housing supply is reached (in about 6 years I guess at current rates since we are building more than the UK) then prices of houses might well collapse. so what? the money will still be there!

sunday times last sunday
Figures from the Industrial Development Authority (IDA) highlight the trend. The authority brought great riches in the early Celtic tiger period. Its achievements in recent years have been slightly underwhelming, however. Employment by IDA companies actually has decreased by almost 9,000 people since 2000. Over the same period, total employment in Ireland has increased by almost 270,000.
sorry when i said most jobs are construction and civil service i was refferring to jobs in last year,60k jobs.

banks lend as they know people will nearly always pay back their mortgages for fear of losing their homes,it doent mean they think that asset prices(house prices) are gonna be worth same or more in lifetime of mortgage,as PLC's they must increase profits year after year by loaning more and much can be securitised and sold off on financial markets.

ISAW

ronbyrne2005 wrote:

sunday times last sunday
Figures from the Industrial Development Authority (IDA) highlight the trend. The authority brought great riches in the early Celtic tiger period. Its achievements in recent years have been slightly underwhelming, however. Employment by IDA companies actually has decreased by almost 9,000 people since 2000. Over the same period, total employment in Ireland has increased by almost 270,000.
sorry when i said most jobs are construction and civil service i was refferring to jobs in last year,60k jobs.

But all the times is saying is that the celtic tiger growth is not as great as it was! that applies to all sectors. construction however happens to be booming. it does not prove nor is it evidence that the Irish economy is going "down the toilet"

banks lend as they know people will nearly always pay back their mortgages for fear of losing their homes,it doent mean they think that asset prices(house prices) are gonna be worth same or more in lifetime of mortgage,as PLC's they must increase profits year after year by loaning more and much can be securitised and sold off on financial markets.

banks do not make money only by lending money. As Ipointed out they also take higher risk investments. Also , the idea that banks will continue to lend to people who will not pay back is ludicrous. It may happen to individuals but as a broad strategy is clearly nonsensical.

ronbyrne2005

ISAW wrote:

But all the times is saying is that the celtic tiger growth is not as great as it was! that applies to all sectors. construction however happens to be booming. it does not prove nor is it evidence that the Irish economy is going "down the toilet".

The times article was saying that the growth is now from construction and consumer spending which is not the way to sustainably grow your economy. If you look deeper under the facade of a growing booming economy you start seeing the threats to the eocnomy.

ISAW wrote:

banks do not make money only by lending money. As Ipointed out they also take higher risk investments. Also , the idea that banks will continue to lend to people who will not pay back is ludicrous. It may happen to individuals but as a broad strategy is clearly nonsensical.

im not saying they loan money knowing they wont get it back,im saying they loan money and know they will get the vast majority of it back as even if people hit hard times they always try to pay their mortgage.most mortgage holders at any one time have significant equity in their home to buffer them from falls. Houses cant collapse like shares and they can only drop in price slowly so its a safe bet to lend money once theres sufficent income/wealth in the economy to repay it even if house prices drop for example by 50%. Even in a worst case scenario of a 50% drop (which is less than what happpened in land strapped japan) vast majority would keep paying mortgages and banks would still get paid,then they would loan to more people to buy at the cheaper house prices and continue to make profits.

Schuhart

ronbyrne2005 wrote:

Houses cant collapse like shares and they can only drop in price slowly so its a safe bet to lend money once theres sufficent income/wealth in the economy to repay it even if house prices drop for example by 50%.

I think you are making an important point here. Our booming residential mortgage market in part reflects the lack of imagination and ambition in our banks, who seem to be happy to go with the safe bet. This partly explains why there is a Bank of Scotland(Ireland) and no Bank of Ireland(Scotland).

Schuhart

Schuhart wrote:

This partly explains why there is a Bank of Scotland(Ireland) and no Bank of Ireland(Scotland).

cough!

Schuhart

Bless you.

Indeed, the Irish banks do have interests in UK and AIB even has a Polish subsidiary and still owns a bit of a US bank. I think the point is more that Irish banks are sitting on what they have. Ultmately, they are more likely to be the subject of a takeover than the authors of a takeover. We are seeing Dutch, Danish and UK banks entering the Irish market. What new markets are Irish banks entering? What strategy do they have for selling their arses all over Europe?

Why does this matter? Because the banks are some of the very few significant Irish headquartered enterprises that actually have resources that would allow them to have such a strategy. If they are taken over, and no new Irish enterprises take their place, we end up in an economy that consists of people screwing computers together for Dell and doing their shopping in Tesco. What's particularly wrong with that? Again, that idea that despite being an open economy all of our key strategic decisions will be taken outside the state.

mhenness

Schuhart wrote:

Bless you.

Indeed, the Irish banks do have interests in UK and AIB even has a Polish subsidiary and still owns a bit of a US bank. I think the point is more that Irish banks are sitting on what they have. Ultmately, they are more likely to be the subject of a takeover than the authors of a takeover. We are seeing Dutch, Danish and UK banks entering the Irish market. What new markets are Irish banks entering? What strategy do they have for selling their arses all over Europe?

Why does this matter? Because the banks are some of the very few significant Irish headquartered enterprises that actually have resources that would allow them to have such a strategy. If they are taken over, and no new Irish enterprises take their place, we end up in an economy that consists of people screwing computers together for Dell and doing their shopping in Tesco. What's particularly wrong with that? Again, that idea that despite being an open economy all of our key strategic decisions will be taken outside the state.

Well from the way you are putting things our companies are not doing much strategic decision making anyway! If our banks and corporations did all get bought out maybe there would be more stategic decision making, even if it were not done in Ireland.

Calina

re: comment on IDA not creating so many jobs...

we have near full employment here - who's supposed to work these jobs that the IDA are supposed to be creating? Why should the IDA be concentrating solely on job creation numbers?

Wouldn't it perhaps be interesting if, instead, we marketed IDA expertise to some of the eastern European nations which are suffering a major brain drain and wastage in our direction? Or will the scare mongering "all our jobs are off to Eastern Europe" kill that idea?

I'd prefer to see the emphasis for the IDA to switch to creating indigenous industry, be it manufacturing or services. It's simplistic to suggest in a country with full employment, absorbing 80,000 emigrants a year that we should be measuring their success by job creation figures only.

mhenness

Calina wrote:

re: comment on IDA not creating so many jobs...

we have near full employment here - who's supposed to work these jobs that the IDA are supposed to be creating? Why should the IDA be concentrating solely on job creation numbers?

Wouldn't it perhaps be interesting if, instead, we marketed IDA expertise to some of the eastern European nations which are suffering a major brain drain and wastage in our direction? Or will the scare mongering "all our jobs are off to Eastern Europe" kill that idea?

I'd prefer to see the emphasis for the IDA to switch to creating indigenous industry, be it manufacturing or services. It's simplistic to suggest in a country with full employment, absorbing 80,000 emigrants a year that we should be measuring their success by job creation figures only.

There was an artice in yesterdays papers about the IDA setting an office in China to offer their expertise to the Chinese on how to get more FDI. I think we have a lot of expertise that other countries would be interested in having. In terms of research and FDI there are some states in America that are also very interested in Irelands approach.

Schuhart

mhenness wrote:

Well from the way you are putting things our companies are not doing much strategic decision making anyway! If our banks and corporations did all get bought out maybe there would be more stategic decision making, even if it were not done in Ireland.

I don’t mean to be rude, but I really cannot make much sense out of what you are saying. You may be missing the point of the discussion.

At the end of the day, the contribution of Dell to Ireland’s exports is ultimately determined in Round Rock, Texas. I’m not convinced that Ireland’s exposure to international markets amounts to a hill of beans from that vantage point. It should matter to us, but there seems to be a difficulty in getting some people to even recognise there is an issue.

calina wrote:

I'd prefer to see the emphasis for the IDA to switch to creating indigenous industry, be it manufacturing or services. It's simplistic to suggest in a country with full employment, absorbing 80,000 emigrants a year that we should be measuring their success by job creation figures only.

Indeed. There's absolutely no point in selling ourselves as a tax haven where you can hire Polish workers.

mhenness wrote:

There was an artice in yesterdays papers about the IDA setting an office in China to offer their expertise to the Chinese on how to get more FDI.

If you are referring to this, I’m afraid you are getting it arseways. The purpose of the IDA office is to attract Chinese investments into Ireland, not to assist China in attracting FDI. You seem to be misreading the spin in the press releases saying the IDA office will ‘help’ Chinese firms targeting the European market. The ‘help’ consists of selling Ireland as an investment location.

http://www.shanghaidaily.com/art/2006/07/01/284785/Ireland_eyes_Chinese_investments.htm Ireland eyes Chinese investments
Chen Liying
2006-07-01
IRELAND'S investment and development agency opened its first China office in Shanghai yesterday, stepping up moves to attract more Chinese investments which want to tap the European market.

The office will offer more information to Chinese companies and will also help to lure Chinese investment in the European nation which has only witnessed "very few" Chinese investments there, said Gus Jones, China director of the Investment and Development Agency, Ireland.

Jackie laughlin

Gurgle,
Despite your abuse, I wish you well in your new business. However, please realise that what you are doing is exceptional. Was it Sir Keith Joseph way back under Thatcher who couldn't understand why everyone just couldn't "get on their bikes"?

Incidentally, you became rude when confronted by a fundamental political question which goes to the heart of which policies we choose for the future.

ronbyrne2005

Calina wrote:

re: comment on IDA not creating so many jobs...

we have near full employment here - who's supposed to work these jobs that the IDA are supposed to be creating? Why should the IDA be concentrating solely on job creation numbers?

Wouldn't it perhaps be interesting if, instead, we marketed IDA expertise to some of the eastern European nations which are suffering a major brain drain and wastage in our direction? Or will the scare mongering "all our jobs are off to Eastern Europe" kill that idea?

I'd prefer to see the emphasis for the IDA to switch to creating indigenous industry, be it manufacturing or services. It's simplistic to suggest in a country with full employment, absorbing 80,000 emigrants a year that we should be measuring their success by job creation figures only.

theres been 270k jobs created since 2001 and no net new jobs in ida sector ,the ida sector jobs are usually export orientated and we're better off having 270k extra workers in exports than in building houses and serving latte's.We're losing/not increasing the jobs that actually create wealth which is how the "celtic tiger " was built

mhenness

Schuhart wrote:

I don’t mean to be rude, but I really cannot make much sense out of what you are saying. You may be missing the point of the discussion.

I guess I was being a little sarcastic. I am referring directly to your comment about Irish banks. Your post says that Irish banks are sitting on what they have. This would seem to imply that they are not taking too many strategic decisions in relation to increasing their interests in things outside of the property market here. I do agree that Irish companies need to be more aggressive in terms of winning business abroad and making sure they don't just depend on the Irish economy. They are putting all their eggs in one basket so to speak.

bk

ronbyrne2005 wrote:

sunday times last sunday
Figures from the Industrial Development Authority (IDA) highlight the trend. The authority brought great riches in the early Celtic tiger period. Its achievements in recent years have been slightly underwhelming, however. Employment by IDA companies actually has decreased by almost 9,000 people since 2000. Over the same period, total employment in Ireland has increased by almost 270,000.
sorry when i said most jobs are construction and civil service i was refferring to jobs in last year,60k jobs.

An important thing to remember is that back in 2000 and pretty much since then, we have been at full employment. So I'd assume that the aim of the IDA was not to create lots of new jobs, instead it was to replace any jobs lost due to company closers. They seem to have been very successful at that, they have basically kept things static at almost full employment.

All the new jobs growth since 2000 have been mainly going to foreign emigrants in the areas of construction and low value services.

On the whole this is a good thing, it indicates that the majority of native Irish people continue to be gainfully employed in the high value jobs at multinationals, while we have been bringing in lots of foreigners to work in the low value services jobs and to help in building our underdeveloped housing and infrastructure. The type of work that Irish people just don't want to do any more.

It mightn't sound very nice or be very PC, but it is par of the course for most wealthy, western countries (i.e. Mexicans in the US).

ronbyrne2005

bk wrote:

An important thing to remember is that back in 2000 and pretty much since then, we have been at full employment. So I'd assume that the aim of the IDA was not to create lots of new jobs, instead it was to replace any jobs lost due to company closers. They seem to have been very successful at that, they have basically kept things static at almost full employment.

All the new jobs growth since 2000 have been mainly going to foreign emigrants in the areas of construction and low value services.

On the whole this is a good thing, it indicates that the majority of native Irish people continue to be gainfully employed in the high value jobs at multinationals, while we have been bringing in lots of foreigners to work in the low value services jobs and to help in building our underdeveloped housing and infrastructure. The type of work that Irish people just don't want to do any more.

It mightn't sound very nice or be very PC, but it is par of the course for most wealthy, western countries (i.e. Mexicans in the US).

A country cant stay rich/get richer by building houses and serving lattes! there were nearly 300k jobs created by economy since 2000 and virtually none have been in ida sector which is what made us wealthy in first place! plus only a fraction of the immigrants are in construction contrary to public perception, its never a good thing when what made you rich fails to expand,if half the 300k jobs since 2000 were in ida sector we would be much better set up for sustainable growth.

Gurgle

Jackie laughlin wrote:

Incidentally, you became rude when confronted by a fundamental political question which goes to the heart of which policies we choose for the future.

Apologies for getting rude about it.
Tbh, it irritates me when people make what appear to be unreasonable comparisons between Ireland and other countries.
We do live in one of the most developed countries in the world, we live in a generally well balanced socialist state despite the best efforts of recent governments to drive us closer to the US capitalist model.
The country and its systems certainly aren't perfect but here more than almost anywhere else, every single person has the opportunity to make a decent, stable and comfortable life for themselves.

Over the last 15 years or so, there has been so much foreign investment that you can make a comfortable living as a PAYE sector worker, and I think that that more than anything else is why so few people are taking on the risks of going out on their own.

bk

ronbyrne2005 wrote:

A country cant stay rich/get richer by building houses and serving lattes! there were nearly 300k jobs created by economy since 2000 and virtually none have been in ida sector which is what made us wealthy in first place! plus only a fraction of the immigrants are in construction contrary to public perception, its never a good thing when what made you rich fails to expand,if half the 300k jobs since 2000 were in ida sector we would be much better set up for sustainable growth.

But then that would be creating jobs for foreign immigrants, not for native Irish people, who are already in full employment.

I actually agree we should be creating better jobs for some of these highly educated foreign immigrants. However IMO we should first be doing everything possible to improve the education for Irish people who are stuck in more menial jobs, so that they can get higher jobs also.

However the point I was trying to make, is that this is certainly no indicator that the economy is failing, which is what some people were trying to get out of this piece of information.

Jackie laughlin

Gurgle,
I've done really well in life. I'm fortunate but I just don't recognise the Ireland you describe. I wish we lived in such egalitarian decency. I wish that everyone was reasonably secure and had a good PAYE job. I wouldn't worry too much about enterprise. Some people will always want to go into their own business while others will be creative in their employment. The problem is that Ireland is one of the world's richest but most unequal societies. I can see the deprivation, the lack of ambition, the lack of a cultured life. OK, it's a couple of years since I met someone who was actually hungry. I've certainly met people with no or poor housing. I also know lots who might be able to manage a sun holiday but who don't have much of a life.

bk

Jackie laughlin wrote:

The problem is that Ireland is one of the world's richest but most unequal societies. I can see the deprivation, the lack of ambition, the lack of a cultured life. OK, it's a couple of years since I met someone who was actually hungry. I've certainly met people with no or poor housing. I also know lots who might be able to manage a sun holiday but who don't have much of a life.

I have to disagree, personally I consider poverty to be when you can't get the following:

1) Food
2) Accommodation of some sort (not necessarily owned)
3) Decent health care
4) Good education (with the ability to improve one self with it).

I don't see any true poverty of this sort in Ireland today (outside the exception of persons suffering from addiction).

Being able to go on a sun holiday each year is certainly not poverty, no one has a right to things like owning your own home, car, fancy holidays, mobiles, etc. If you want these things then you have to work to get them, get a good education, get a better job etc.

The majority of the world lies in true poverty, they struggle daily to put food on the table and often die from easily curable diseases and have little hope of education.

I would argue that even in comparison to other rich countries, Ireland has a pretty good (if not perfect) balance in equality between rich and poor. For instance the US is far, far worse, it is shocking to see just how many beggars are on US streets.

अधिनायक

Schuhart wrote:

It is just our continuing dependence on foreign firms is a strategic weakness that needs to be addressed.

I agree with this. We are making good income and taxation revenue from the IT, pharma and fin services companies, but there is little high value strategic work going on. A lot of the IFSC work is settlements. A lot of IT is regional operations and localisation.

We need a better educated workforce, or incentives to encourage more high skilled English speaking immigrants, such as lower income taxes. It is a pity that so much of out wealth is being thrown into housing and consumer goods.

bk

अधिनाय&#2325 wrote:

A lot of the IFSC work is settlements. A lot of IT is regional operations and localisation.

I don't know about the IFSC, but I do know about IT. While it may have been true a few years ago, it certainly isn't true today. Many of the major multinational IT companies have intensive and large scale R&D work going on in Ireland.

One example that comes to mind is IBM, who have a major R&D lab here in Ireland. I'll readily admit it is more D then R, but still world class work.

Also another example is the number of small Irish mobile software companies that have sprung up in Cork from the Motorola factory down there. Which brings up an important point. The multinationals often give staff in Ireland exposure to top class R&D experience, experience that some Irish staff then take with them when they go and set up there own company. And often these small startup companies maintain good links with their former employeers, who often become investors and customers of the fledgling companies.

This is usually how new business startup, well in IT anyway, they rarely setup in isolation, that is one reason why multinationals are so importnat.

अधिनायक

We have three Irish tech companies that I can think of on the NASDAQ: Iona, Trintech and SkillSoft. In pharmaceuticals, there's Trinty Biotech and ICON. The two big banks have some decent overseas operations and there's a handful of other successful international companies like Ryanair and CRH.

Israel has 71 NASDAQ listed companies.

You're right that the presence of the multinationals here really helps startups but I don't see that many succeeding yet.

bk

अधिनाय&#2325 wrote:

Israel has 71 NASDAQ listed companies.

That is a very good point, but wonder how much that has to do with "War is the mother of invention."

Most of Israel's high tech industry is heavily involved in the weapons industry. For instance, when Israel buys fighter planes from the US, they only buy the air frame and engines, they install their own designed and manufactured avionics and weapon systems, which are world renowned and many would argue better then the US.

Being in a constant war tends to focus minds, I believe Israeli industry has greatly benefited from this. As has the need to develop their own industries and jobs as many multinationals are too afraid to set up there due to the problems there.