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News : Irish Economy Last Updated: Jan 10, 2011 - 3:49 PM

Newly appointed president of American Chamber of Commerce in Ireland says Ireland as a country has been tarnished by the fiscal and banking crises
By Finfacts Team
Jan 10, 2011 - 3:46 PM

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Newly appointed President of the American Chamber of Commerce in Ireland, Gerard P Kilcommins, has pointed to the role US firms can play in Ireland’s economic recovery in the coming years and he said Ireland as a country has been tarnished by the fiscal and banking crises.

“We share Ireland’s goals in terms of economic recovery and we are anxious to play our part in achieving them. Inward investment played a major part in the recovery of the 1990s and it is now in a strong position to play a similar role again - - as demonstrated by the growth in manufacturing output, exports and increased employment in the sector in 2010. Now more than ever it is vital that we retain and grow FDI (foreign direct investment) investment in Ireland as we seek to return to economic growth,” he said.

There was an increase in jobs in the mainly US-owned FDI sector in 2010 of 1,352 jobs but
total full-time employment in the international tradeable goods and services sector fell back to the 1997 level when the total workforce was 25% smaller.

Kilcommins is vice president of Global Operations for Medtronic’s Vascular businesses and General Manager of the Galway site. In addition to the Galway facility, he holds global responsibility for all Vascular manufacturing activities including a number of facilities outside of Ireland.

Kilcommins was appointed on the 50th anniversary of the founding of the American Chamber of Commerce in Ireland. The first meeting of the Chamber took place in the Gresham Hotel, Dublin on the 10th of January 1961, and today’s press briefing was held in the Gresham Hotel to mark the occasion.

Speaking on his appointment, he said; “In the 50 years since the American Chamber of Commerce was founded, the industrial landscape of Ireland has changed irrevocably. An increased inflow of foreign direct investment, full integration into the EU and a competitive corporate tax regime which supported the generation of wealth and employment all contributed to the stellar growth of Ireland’s economy in the 1990s and into the early part of this century.

“However, what has benefited us in the past, may not work in the future. As we seek to restore economic stability, Ireland must adopt a strategic and proactive approach to influencing and controlling its destiny.”

Kilcommins said global corporations make investment decisions two or three years in advance and the effect of any reputational damage to Ireland as a result of the fiscal and banking crises may not be felt until 2012 and beyond. Ireland as a country has been tarnished by recent events. It is critical that the Government recognise this and support the rebuilding of our reputation as a secure and successful international business hub. Ireland’s attractiveness for investment as a whole should be promoted as an integrated Government communications campaign, highlighting the many positives of our country.

Kilcommins said that while the multinational sector remained pivotal to Ireland’s economic recovery, it had not been immune to the downturn in the global economy with over 9,000 jobs lost in the sector in 2010. However, despite these challenges, the environment for investment has improved in Ireland in recent years.

“The three key issues for inward investors are tax, talent and competitiveness,” Kilcommins said. “Corporate tax is a critical factor for companies to invest in Ireland. Yes, other factors such as our work ethic, our education, our proximity to Europe and our pro business environment all contribute to Ireland’s attractiveness but it is the competitive corporate tax rate which is the jewel in the crown for attracting investment to Ireland.

“And we must be clear that overseas firms do pay their fair share of corporation tax. In fact, 60% of all corporation tax -- around €2.4bn in 2009 - - is paid by the FDI sector. The sector also accounts for €110bn or over 70% of total exports in the Irish economy (about 90% of tradeable exports), €19bn in direct expenditure in the economy, €7bn in payroll costs and 73% of business spend on research, development and innovation. With over 139,000 direct jobs created by multinational companies, 100,000 in US companies alone, the sector is a primary creator of direct and indirect jobs in Ireland."

Looking to the future, Kilcommins said that Ireland must play to all of its strengths as it faces the challenges ahead. “Our strengths remain our competitive tax regime and the quality of our people and we must not lose focus on these,” he said.
“Cost competitiveness was a strength in the 1990s and we must make it so again. Of course, we will never return to being a low cost economy but we can work towards being a high value economy which can compete and win FDI investment and create jobs in high value, export-led sectors.”

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