 Ireland has cranked up economic growth averaging 8% over the last decade – one of the best performances in Europe, if not the world. Today though the Celtic Tiger is looking a little skittish, spooked by climbing interest rates and emerging territories aggressively undermining its hard-earned competitiveness. Nevertheless, the economy is still set to show a 4% growth rate this year, even if the Irish government's accounts will be in the red for the first time in recent years – though state spending is still expected to rise by 8% next year. So where should investors seek opportunities in coming years? Certainly, Ireland will be attractive for major construction firms as it prepares to spend €180bn on infrastructure under its much-touted National Development Plan (NDP). New motorways between Dublin and all of the other major cities, new railways around Dublin, Cork and the West of Ireland, and waste treatment plants in dozens of major towns will all be built before 2013. More than €8bn has been put aside by the state to spur research and development alliances between Ireland's universities and industry, building on co-operation that has been driven by Science Foundation Ireland over the last five years. And despite the current economic clouds, finance minister Brian Cowen – tipped to become prime minister when Bertie Ahern retires – insists that the all-important NDP will not be restrained. Indeed, it cannot be if Ireland is to survive now that it can no longer compete on the price of manufactured goods with rapidly developing economies in Asia and Eastern Europe. The government is depending on the NDP to pick up some of the slack in construction now appearing as the rapid house building of the last 15 years slows. Last year, Ireland built 90,000 houses; this year 75,000 will be built, while economists estimate that about 60,000 will be added next year. In all, one in every three houses will have been built in that time Meanwhile, pharmaceuticals is still one of Ireland's biggest industries, with most of the leading global brands operating there, such as Pfizer, which announced a €500m further investment in its Irish operations in October. In the past, Ireland attracted much of this investment because of its low corporate tax regime. Today, the government is banking that it can keep existing multinationals, and attract more of them, by offering a highly educated workforce. This hope has been bolstered by the decision of leading pharmaceutical multinational Wyeth to set up a life sciences campus outside Dublin that is already employing several thousand. Other life science companies are following. Ireland attracted over €1bn in such foreign direct investment between July 2006 and June 2007, compared with Switzerland's €487m share and the UK's €290m. |