Individual Case Analysis Essay Example | Topics and Well Written Essays - 1250 words

Individual Case Analysis - Essay Example Ireland is a manufacturing base with low costs for the manufacturing of US enterprises. The policy towards FDI became more selective in the 1970s which encouraged flow of investments in the production of goods that are produced through modern technology (Ruane & Buckley, 2006, 4-5). Body In the decade of 1990-2000, the country witnessed massive economic transformation. The growth in GDP took the rising curve and fiscal surplus became the norm. The resurgence of the economy earned a great deal of worldwide attention. The experts opined the policies relating to collective bargaining and reforms in the education sector along with exchange rate reforms contributed in the resurgence. But some regarded FDI as the factor that is responsible. The performance of the country was primarily driven by the foreign owned firms serving the EU market. The high performance of the small firms nullified the poor performance of the indigenous sector. Many experts believed that the rising costs along with shortages in labor supply which act as the barrier to competitiveness of the country. The real wages seemed to increase faster than the productivity and reduce the incentive from FDI. Two acts were introduced by the Valera government namely the Finance Act of 1932 and the Control of Manufactures Act of 1932 (Baccaro & Simoni, 7-8). The economic stagnation in 1950 demanded changes in economic regulations. In order to boost the economy, several laws were passed. The country in collaboration with the IMF the World Bank relaxed the restrictions on the control of Manufactures Act. In 1958, there was a shift from protectionism to free trade regime and the government encouraged foreign investments through concessions in tax and incentive grants. The tariff got lowered in the period between 1962 and 1964. In spite of the turbulence faced by the country in 1970s the FDI continued to grow. Industrial development Authority believed that the agency led foreign investment strategy had done litt le to lift the economy. The success witnessed by some sectors did not trickle down to the rest of the economy. The linkage between the foreign investors and local industries was limited. The initiatives to promote foreign investment were not fruitful (Velde, 6). The support provided to the foreign firms particularly operating in the electronics sector was excessive. The MNCs were not blamed for the failure of the strategies as the suppliers lacked the required technical expertise. The IDA holds the mismanagement from the part of the government and is responsible for the situation particularly during the times of high inflation rates. Excessive government spending as well as high rates of unemployment took toll from the economy. The need for resurgence was felt from all sectors and the government took advantage of the situation and forged to create social partnerships across political and social sectors. The IDA took the initiative to promote labor industries of Ireland. A policy of advertising campaign was followed. The emphasis was shifted from tax and financial incentives to building up an educated workforce. The resultant was immigration of new firms into the country. The importance of Ireland among the EU was soon felt. Direct transfers were made into the country through the Single European Act. Funds for development of infrastructure and