Small but Strong: The Irish Economy
When analyzing the distance between two countries, GDP per capita, or the income per person, is extremely important to determine the levels of trade and types of partners a country trades with. According to the 2017 Index of Economic Freedom, Ireland’s GDP per capita is $65,292.38. When we compare this to this to the United States, which has a GDP per capita of $53,041.98, we find that Ireland has a high average income per person. This is one of the factors that makes Ireland competitive. The 2017 Index of Economic Freedom also points out how important trade is to Ireland’s economy. The value of exports and imports combined is 222% of the GDP, indicating that it is a competitive country in the world of trade. According to the Observatory of Economic Complexity (OEC), Ireland is the 33rd largest export economy. In 2014, Ireland exported $142 billion and imported $72.6B, which resulted in a positive trade balance of $69.7 billion. Ireland has many exports, but the highest is packaged medicaments at 16% of all exports, which includes medicines like antibiotics and insulin. Two exports that pertain to the restaurant industry are malt extract (a cereal grain that is essential to brewing beer), which makes up 1.5% of exports bovine meat, which makes up 1.4% of exports. This is important because Ireland clearly makes enough of these products, so they will be available to your restaurant without having to import them. This is especially important for the malt extract, which will be useful in the pub business. Another important factor is that the United States is the top export destination for Ireland which receives 20% of Ireland’s exports according to the OEC. This is important as well for the restaurant industry because it shows that the United States and Ireland have a beneficial relationship with one another. When we compare Ireland to the United States, we see that the United States has a colossal trading network. According to the OEC, the United States is the 2nd largest export economy, which ranks better than Ireland, BUT the United States has a negative trade balance of $731 billion. The GDP is higher than Ireland with 17.4 trillion, and its top export is refined petroleum. When looking at the United States’ relations to Ireland, they only export .51% to Ireland, but they import 1.3%, or $285 billion, from Ireland. In the restaurant industry, this shows that Ireland might be a better place to settle as the United States depends more on Ireland than Ireland depends on the United States.
After announcing and sticking to a strong strategic financial plan, Ireland has seen a huge economical surge from Foreign Direct Investors. Not only has Ireland seen great yields from their plan financially, but they have also moved up to the number 18/190 slot in the Doing Business Report which is published by the WTO. Not only has ireland moved forward in the overall category, but they are also ranked 10/190 for starting a new business. In 2016 Ireland was ranked 19/190, which shows us that the market is increasing and continues to succeed. When we compare these numbers to the US who ranks 8/190 overall and 51/190 for starting a new business, we begin to see that Ireland’s economy may actually be more profitable to launch our business. Ireland has also scored higher than the US according to the Doing Business Report by the WTO in the categories of: construction permits (IRE 38th/US39th), getting electricity (IRE 33rd/US 36th), Protecting minority investors (IRE 13th/US 41st), and paying taxes (IRE 5th/US 36th). When reflecting on these rankings by the WTO we can see that Ireland’s economy could be a very ideal location for our investment.
With ireland’s low tax rates of 12.5% which is the lowest in Europe, their acceptance of Foreign Direct Investors, and booming agricultural economy a restaurant would be a great business idea, if started in the right area. The purchasing of land in Ireland is currently very laxed, and with the new strategic plan, very affordable. Unlike in the US which can hold some extremely expensive real estate locations, especially in a corporate sense, Ireland currently has no restrictions on the acquisition of urban land. The only restrictions when purchasing real estate in Ireland is if it will be agricultural land, due to their abundant farming communities.
With what is discussed above, Ireland is a great potential place to open a successful restaurant. The higher GDP per capita translates into people getting out more and spending more money. A strong economy will help kickstart any business. With Ireland being a strong country for both import and export, it allows for supplies to be readily available to keep up with the supply and demand changes for the restaurant. A low tax rate on land would allow for the purchase of a great location for a good price. As compared to the United States, it is fairly easy to acquire land and a building permit.
Ireland has been involved in the World Trade Organization since January 1995 and also been a member of GATT since 1967. Ireland’s involvement in the WTO is not only secure as an individual country but also through their association with the EU. This association with the WTO allows for Ireland to have a vast number of trade partners which creates lower prices to import goods for a restaurant. This association does not give them an advantage over the United States who are also a member. However, it does make it easier for the process of taking a restaurant internationally and into Ireland. The Irish economy has been making serious strides towards a higher GDP and economic stability. The fact they are members of the EU has not been the main reason for their increase but has been a great foundation for their rapid recovery from their economic collapse in 2008. The economy of Ireland has been showing signs of stability which leads to international investments as seen in the willingness of foreign investors to show interest in their markets.
“Ireland.” Ireland Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. Index of Economic Freedom, 2017. Web. 27 Feb. 2017. <http://www.heritage.org/index/country/ireland>.
“Ireland.” OEC – Ireland (IRL) Exports, Imports, and Trade Partners. Observatory of Economic Complexity, 2015. Web. 28 Feb. 2017. <http://atlas.media.mit.edu/en/profile/country/irl/>.
“United States.” OEC – United States (USA) Exports, Imports, and Trade Partners. Observatory of Economic Complexity, 2015. Web. 28 Feb. 2017.
“WORLD TRADE ORGANIZATION.” WTO | Ireland – Member Information. N.p., n.d. Web. 01 Mar. 2017.
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