The Minister for Good News Strikes Again!
Irish business related news was dominated again this week by property and the Minister for Good News a.k.a. Minister for Enterprise, Trade and Employment Micheál Martin, led a trade mission to the US, with recycled announcements ready for issue each day.
The ESRI advised the Government to let the Irish property market readjust itself, to a more sustained level. Quite a lot of non-socialists like the way markets work - - when it suits them, of course!
The more exciting property news was on the international front. Garrett Kelleher's Shelbourne Developments launched the promotion of the sale of units in the 150-storey Chicago Spire, which will be North America's tallest building and Ballymore Properties announced that it had acquired a 95% interest in the 60-storey Manchester Piccadilly Tower project, which is planned to be Europe's tallest residential property. Irish developer Sean Dunne must have felt envious as he prepares to do battle with the Nimbies of Ballsbridge in South Dublin in respect of his planning application for a 37-storey tower. Of course, developers themselves are not averse to being afflicted with the Nimby disease, when it suits them!
The investment of more than €40 billion by Irish investors and banks in commercial property, principally overseas, will undoubtedly have some benefits for the Irish economy. Some rental income will make its way home and banks like Anglo Irish will continue to do well from it.
As to the trade-off with the emasculation of the Irish-owned tradable goods/export sector, the impact will be evident as labour intensive multinationals shut shop.
What Minister Micheál Martin thinks about issues like this, he keeps to himself. It's easier to brag about becoming a world-class knowledge economy in six years. Besides, hadn't he a rake of good news Stateside this week to show the begrudgers at home that he was bringing back the bacon!
One of the few successes that Martin hasn't claimed credit for, is Denis O'Brien's Digicel in the Caribbean.
Digicel, which has been of the rare significant Irish related business successes of recent years, received recognition in this week's issue of the Economist:
The Irish are coming
WHEN Digicel, an Irish mobile-phone operator, decided to invest heavily in Haiti last year, it raised eyebrows. How on earth did Digicel's maverick owner, Dennis O'Brien, hope to make money in such a poor country? “You don't look at GDP. You ignore that,” says Mr O'Brien. Sure enough, Digicel signed up new customers so fast that the company had to rewrite its business plan after the first week. After just 15 months it has signed up 1.7m customers, compared with the 1m shared by its two rivals, Comcel and Haitel. Digicel's assault on Haiti is only the latest in a series of Caribbean conquests. Since the company set up in Jamaica in April 2001 it has established a presence in 22 markets in the region and has amassed some 5m customers. Mr O'Brien says he has invested $1.9 billion in total, including $260m in Haiti.
Trade Missions and Spin
A trade mission requires the spin that a ministerial presence can conjure up business like an illusionist. So on this occasion, Enterprise Ireland had thin gruel to work with in respect of new announcements and in substitute, it arranged contract signing ceremonies in respect of past business deals - as if busy people have time for this carry-on every day!
On Tuesday, Minister Micheál Martin made the first of several announcements, with the heading: Limerick Firm scoops massive contract on US Trade Mission - - the granting of the contract clearly had nothing to do with the trade mission.
The biggest announcement was headed: Minister Martin Announces $300M Energy Deal for Airtricity - - Airtricity linked projects in Texas announced in 2006 and early 2007. The arranged signing ceremony, was in respect of a wind turbine purchase agreement with General Electric.
The danger is that when making announcements, many of which are part of a routine of actionless action, become the main function of a minister, the spin can become the reality.
Last month, the Irish Exporters Association lauded the success of the Government's "Asia-Pacific" strategy and said it should be applied in Europe.
The claimed "success" is simply a fantasy.