Multinational boost as US investment hits $30.5bn

GCU Flexible Demeanour · 05-10-2012 11:07PM #1

OK, Enda's on the cover of Time giving the country some positive coverage, and a bit of good PR can be helpful. But do we need to critically assess the benefits of the FDI that this coverage is, presumably, aimed at attracting?

Consider this recent story

http://www.independent.ie/business/irish/multinational-boost-as-us-investment-hits-305bn-3249411.html

US multinational investment in Ireland last year was the second highest on record. A report commissioned by the American Chamber of Commerce Ireland revealed investment in Ireland was $30.5bn (€23.6bn).

Ireland ranked third in the top list of European destinations, following the Netherlands with $55.7bn (€43bn) and the UK with $36.8bn (€29bn).

<...> US firms invested more in Ireland last year than the total in developing Asia combined (roughly $23bn).

There's only four and a half million of us. If we're getting an amount of US FDI that's comparable to the UK, and more than Asia, how are we not all swimming in wealth?

Unless US FDI has some feature that means, actually, it's not such a great benefit. You can be the third largest location for US FDI, and still find yourself looking at your mounting national debt with a wonder of how it will ever be repaid.

Is it fair to say we sort of guess this is some scam, but we're afraid to say so? Huge amounts of money on paper, but we sort of guess it doesn't amount to anything real.

Is there any way of starting a real dialogue on the value of FDI to the Irish economy, as preparation for a change in our outlook?

maninasia · 06-10-2012 12:22AM

GCU Flexible Demeanour wrote: »

OK, Enda's on the cover of Time giving the country some positive coverage, and a bit of good PR can be helpful. But do we need to critically assess the benefits of the FDI that this coverage is, presumably, aimed at attracting?

Consider this recent story

http://www.independent.ie/business/irish/multinational-boost-as-us-investment-hits-305bn-3249411.html

US multinational investment in Ireland last year was the second highest on record. A report commissioned by the American Chamber of Commerce Ireland revealed investment in Ireland was $30.5bn (€23.6bn).

Ireland ranked third in the top list of European destinations, following the Netherlands with $55.7bn (€43bn) and the UK with $36.8bn (€29bn).

<...> US firms invested more in Ireland last year than the total in developing Asia combined (roughly $23bn).

There's only four and a half million of us. If we're getting an amount of US FDI that's comparable to the UK, and more than Asia, how are we not all swimming in wealth?

Unless US FDI has some feature that means, actually, it's not such a great benefit. You can be the third largest location for US FDI, and still find yourself looking at your mounting national debt with a wonder of how it will ever be repaid.

Is it fair to say we sort of guess this is some scam, but we're afraid to say so? Huge amounts of money on paper, but we sort of guess it doesn't amount to anything real.

Is there any way of starting a real dialogue on the value of FDI to the Irish economy, as preparation for a change in our outlook?

I've been looking for a breakdown of that figure, what is actually meant by investment in this case?

Stheno · 06-10-2012 12:26AM

Being very cynical, one could class it as how much turnover can be channeled through Ireland to take advantage of tax rates?

barneystinson · 06-10-2012 12:31AM

Stheno wrote: »

Being very cynical, one could class it as how much turnover can be channeled through Ireland to take advantage of tax rates?

And what's wrong with that; money for nothing...

M three · 06-10-2012 12:41AM

maninasia wrote: »

I've been looking for a breakdown of that figure, what is actually meant by investment in this case?

It would also be useful too see how much the IDA and enterprise ireland spend in attracting US companies to Ireland, how much money is lost in tax breaks, providing industrial units etc

What if the money was spent instead on encouraging and funding indigenous Irish companies?

Does anyone have any idea of the money involved?

femur61 · 06-10-2012 06:45AM

Don't a lot of companies set up here to avoid paying tax in the US and UK.

http://politico.ie/social-issues/7966-coporation-tax-ireland-a-popular-tax-haven-among-ftse-companies.html

http://www.forbes.com/sites/kellyphillipserb/2012/03/18/ireland-continues-to-flex-tax-haven-muscles-will-their-luck-run-out/

Ultimately very little of the profits these companies make will stay in Ireland but the plus side is the snowball effect it has on surrounding businesses.

Dob74 · 06-10-2012 09:00AM

GCU Flexible Demeanour wrote: »

OK, Enda's on the cover of Time giving the country some positive coverage, and a bit of good PR can be helpful. But do we need to critically assess the benefits of the FDI that this coverage is, presumably, aimed at attracting?

Consider this recent story

http://www.independent.ie/business/irish/multinational-boost-as-us-investment-hits-305bn-3249411.html

US multinational investment in Ireland last year was the second highest on record. A report commissioned by the American Chamber of Commerce Ireland revealed investment in Ireland was $30.5bn (€23.6bn).

Ireland ranked third in the top list of European destinations, following the Netherlands with $55.7bn (€43bn) and the UK with $36.8bn (€29bn).

<...> US firms invested more in Ireland last year than the total in developing Asia combined (roughly $23bn).

There's only four and a half million of us. If we're getting an amount of US FDI that's comparable to the UK, and more than Asia, how are we not all swimming in wealth?

Unless US FDI has some feature that means, actually, it's not such a great benefit. You can be the third largest location for US FDI, and still find yourself looking at your mounting national debt with a wonder of how it will ever be repaid.

Is it fair to say we sort of guess this is some scam, but we're afraid to say so? Huge amounts of money on paper, but we sort of guess it doesn't amount to anything real.

Is there any way of starting a real dialogue on the value of FDI to the Irish economy, as preparation for a change in our outlook?

Is this for the European issue or the US issue? Was on us website it had s different cover.
Personally I think the press is blowing this out of all proportion. Time isn't as iimportant as a cable needs channel. Just spin

GCU Flexible Demeanour · 06-10-2012 11:49AM

Dob74 wrote: »

Is this for the European issue or the US issue? Was on us website it had s different cover.
Personally I think the press is blowing this out of all proportion. Time isn't as iimportant as a cable needs channel. Just spin

I actually don't know - and I do agree it's PR. I'm really just using it as a jumping off point for the discussion - I'd see the article as, certainly, part of Government efforts to present a positive image abroad to attract FDI.

maninasia wrote: »

I've been looking for a breakdown of that figure, what is actually meant by investment in this case?

I'm similarly interested. I'd expect its a different issue to transfer pricing - as I'd expect that the money in this case would have to be something that could purport to the investment, rather than simply income.

I can dimly remember something being said (a few months back in some other story) about IFSC operations giving an impression that more 'investment' was resident here than would actually be the case, but I can't find a link or anything that illuminates that.

murphaph · 06-10-2012 05:02PM

barneystinson wrote: »

And what's wrong with that.

It's extremely easy to replicate, ie, it's possible to lose this advantage at any time: unstable. Not a good way to run a solid economy.

FDI is fine, but we should strive to not be dependent on it!

bbam · 06-10-2012 08:03PM

But the thing is that if a company like Intel spend fifty million euros here on equipment for a new wing of a factory. Y
99.5% of this is sourced from outside the state. And then it's staffed by existing staff as the push is on further automation.
So for the fifty million I'd doubt more than a few jobs are created and very little money gets spent that stays inA the state. I

maninasia · 07-10-2012 02:13PM

This looks like the real figure from the American Chamber of Commerce website (the same chamber which commisioned the report above)
http://www.amcham.ie/article.aspx?id=919

US Companies Continue to Invest

US Companies are continuing to invest in Ireland. So far in 2012 there has been over 45 major investments that have resulted in almost 6,000 new jobs and investment of $2 billion.

So if this is investment to date, we are probably looking at a real figure of about 2.5 billion for the year, only 1/10th of what is actually stated...so not too far out!:rolleyes:

I think this is the report that is referenced in the original article, I guess the 'journalist' just copied and pasted the press release from the Chamber of Commerce.
http://www.amcham.ie/download/fdi.pdf

I've looked through it and can't find any simple or clear breakdowns on investment per year and what is classified as 'investment'. I guess they are somehow counting holding companies capital and revenue flows into annual 'investment'.

thebman · 07-10-2012 03:26PM

maninasia wrote: »

This looks like the real figure from the American Chamber of Commerce website (the same chamber which commisioned the report above)
http://www.amcham.ie/article.aspx?id=919

US Companies Continue to Invest

US Companies are continuing to invest in Ireland. So far in 2012 there has been over 45 major investments that have resulted in almost 6,000 new jobs and investment of $2 billion.

So if this is investment to date, we are probably looking at a real figure of about 2.5 billion for the year, only 1/10th of what is actually stated...so not too far out!:rolleyes:

I think this is the report that is referenced in the original article, I guess the 'journalist' just copied and pasted the press release from the Chamber of Commerce.
http://www.amcham.ie/download/fdi.pdf

I've looked through it and can't find any simple or clear breakdowns on investment per year and what is classified as 'investment'. I guess they are somehow counting holding companies capital and revenue flows into annual 'investment'.

Whatever makes the number bigger is factored in, whatever might make it smaller is left out.

The same way the government do everything.

Good loser · 07-10-2012 11:55PM

maninasia wrote: »

This looks like the real figure from the American Chamber of Commerce website (the same chamber which commisioned the report above)
http://www.amcham.ie/article.aspx?id=919

US Companies Continue to Invest

US Companies are continuing to invest in Ireland. So far in 2012 there has been over 45 major investments that have resulted in almost 6,000 new jobs and investment of $2 billion.

So if this is investment to date, we are probably looking at a real figure of about 2.5 billion for the year, only 1/10th of what is actually stated...so not too far out!:rolleyes:

I think this is the report that is referenced in the original article, I guess the 'journalist' just copied and pasted the press release from the Chamber of Commerce.
http://www.amcham.ie/download/fdi.pdf

I've looked through it and can't find any simple or clear breakdowns on investment per year and what is classified as 'investment'. I guess they are somehow counting holding companies capital and revenue flows into annual 'investment'.

Very interesting. The $ 2 bn to $ 2.5 bn you reference strikes me as about the true figure for buildings and equipment. The balance must be capital flows of some kind.

Multinational boost as US investment hits $30.5bn

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