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Exporter of the Year Award 2012: Kent Stainless, Wexford: Colin Lawlor, president IEA, Anne O'Brien, managing director, Kent Stainless, and Richard Bruton, enterprise minister, Dublin, Nov 23, 2012. Photo: Paul Sherwood
Irish Economy: The Irish Exporters Association (IEA), the private sector
industry body, says exports grew by €9bn in 2012 to €183bn. However, the
official headline value of exports in 2011 was €164.3bn. So the claim of
€183bn is the first fiction.
The CSO revises its initial value of annual merchandise exports, mainly
offsetting transhipments to Northern Ireland, in its March Balance of Payments
statement that accompanies fourth quarter growth data. The official value of
merchandise and services exports in 2011, are detailed on Page 4 of the
March 22, 2012 BoP statement [pdf].
The IEA says Irish exports grew by 5% in the year, "which was double the
world trade growth, and shows a return to competitive strength in many sectors
of Irish industry."
This narrative is the second fiction.
The IEA says services exports were the main driver of export growth last
year, with an 11% growth which "consolidated Ireland’s ranking as the 9th
largest global exporter of services."
Manufactured goods exports showed no growth in the year. Growth took place in
medical devices exports of 6% and in agri-food exports of 2%,however exports of
computer hardware continued their long term decline and fell by 16% , and
pharmaceutical and chemical exports showed no growth as the off –patent drugs
peaked in impacting the sector in 2012.
Looking forward, the IEA says it is confident that export growth in 2013 will
once again be over 5% and increase to 7% in 2014.
John Whelan, chief executive of the IEA said at the launch of the
annual review: "Ireland’s export growth at twice the world trade average for
2012 shows a strong return to competitiveness in many our businesses.
"Ireland is now seen as the prime location in Europe for hi –tech mobile,
internet and social media technology companies. There is no doubt that there
is a direct link between the increased success in this sector and our increased
competitiveness, which if maintained will enable ensure significant long
term jobs growth. Services exports now account for 49% of total exports and are
expected exceed 50% next year.’’
Last year we estimated that at least a third of
the value of services exports relate to tax strategies and it could be as high
as 40%. So for example when Google books almost half its global revenues in
Ireland for tax purposes, it feeds into the delusion that exports are rising
when they are not. Never underestimate the Irish and international market for fairytales.
As to the statement: "There is no doubt that there is a direct link between the
increased success in this sector and our increased competitiveness, " there
should be no doubt that this is a very misleading claim.
The biggest services exporters are the
funders of the IEA.
The IEA chief executive referred to the lack
of growth in exports to the fast growing BRICS (Brazil, Russia, India and
China) markets, where exports fell for
the second consecutive year: "Our competitors in other EU
countries have rapidly grown their exports to the BRICS countries to the point
that they now account for 22% of total EU 27 exports, whereas exports from
Ireland still only account for 4% of total Irish exports. This is a very
worrying trend as 90% of global trade growth is expect to come from the emerging
markets outside of the EU over the next decade ‘’
Most of the 4% relate to multinational exports
and decisions on destination of output are not generally made in Ireland.
An example of the fantasy world of spin
is provided by the Irish Examiner today:
‘Amazingly strong’ year for exports - - It's essentially a lie and
these additional exports are as bogus as the paper wealth creation by Wall
Street during the credit bubble.
A copy of the IEA review should be available
The following illustrates the high revenues/exports of €12.4bn booked by Google in Ireland in 2011 and the low value-added e.g. payroll costs were €218m.