International Business Environment in Ireland - Case Study Example

International Business Environment in Ireland Introduction In order for a country to prosper economically, the government must act positively towards development for instance lowering taxes on imports and adjusting taxes upwards on exports so that the country controls movement goods and services in and out of the country. The research paper is aimed at determining how political, economic and legal systems are contributing to economic development of Ireland. When the government is peaceful then even the foreign investors are ready and willing to invest in to the country. Without inclusion of the global business partners the country would not have gained the economic state it has at present. However, within the combination of various factors that influence development, the government of Ireland embraces peace and socio-cultural integration so that the country is able to recognize business partners as part of their economic development stakeholders hence handling business partners with the diligent they require. Cut in government spending is also a factor which boosted performance of the economy of Ireland. Tax reduction was meant to reduce cost of investment and attract foreign investors in the country. That is why Microsoft was attracted to invest in information technology business in Ireland which generated a lot to economic activities and contributed positively towards the gross domestic product. Economic systems With control over the inflation, the country is able to gain from Foreign Direct Investment (FDI) increasing the number of business transaction between traders and intergovernmental organization to the benefit of the country. However, with peaceful transition in government, the economic state of the country has withstood the tough global economic challenges that face many countries in the global market resulting into heavy losses in business and trade as a whole (Gordon Bigelow, 2003, p. 45). The overall ability of a country to attract foreign investment also depends on membership of an economic trading block. In case of Ireland membership of European economic commission not only provided market to the country but also enabled it to diversify its export products. Initially Ireland depended on the markets of the united kingdom alone which relied mostly on agricultural products only. Through membership of the economic block Ireland was able to open up to competition for its products as well (Philip, 2000, p. 17). In accordance with the PESTEL system, it is important to highlight the role played by the legal issues to ensure that all trade processes are carried out in accordance with the Irish business laws so as to reduce suspicion on unwarranted business deals that are likely to jeopardize the economic state of the country. With the aid of available technology, Ireland was able to engage other countries into trade agreement within the global business laws so as to restrict illegal business while increasing legalized trade between countries and Ireland (Thomas A. Boylan, 2003, p. 64). Further, due to the attractiveness of the country integrated with PESTEL, Ireland was able to provide control, and benefit for foreign companies which overcame the cost and risks they uncured leading to high foreign direct investment. The tremendous economic growth is as a result of government commitment in the pledge to sustain and trusted regulations that would stabilize the political and socio-economic development to eradicate global recession for instance the 2008 recession that was felt by all the global financial controllers (Philip, 2000, p. 104). Many countries prefers trade with Ireland from the 2008 experience where Ireland stood out as the only country that was not shaken by the 2008 economic recession, this greatly influenced the country’s GDP (Gross Domestic Product), this would lead to long term economic performance in the country (Philip, 2000, p. 89). In the initial stage, the independence from Britain greatly uplifted Ireland as the investors had opportunity to face Ireland business wise. It was difficult before to trade in a country that is colonized by another. The opportunities erupted which the country utilized well to reverse their economic state. This was influenced by coherent election process that would increase the level of trust between Ireland and the neighboring countries. Colonization is another political factor which did great harm to development of Ireland hence stagnating development activities. It came with rebellions to the British rule made possible by social groups such as the Irish brotherhood. Financial support from European Union was another boost to the economy of Ireland. This came with membership of the European Economic commission. Signing of the national partnership treaty between government, employers and employees are some of the effort which the government took to control investment costs. This went to the extent of locking wage increases to be a 3% p.a. Personal income taxes were cut hence empowering the employees economical due to extra disposable income they take home (Gordon Bigelow, 2003, p. 49). However, the information from the World Bank mission statement states that the developmental challenges encompass the change in social system. To affirm this, the bank state that “the challenges of development is to improve the quality of life, with a better quality of life there should be high income though it involves much more than that level of education also increases the country’s economy as the level of interdependency due to poverty would reduce, environmental conservation would also be looked at in a wider perspective (Philip, 2000, p. 79). Environmental factor lead to famine at one point Government protectionist policy hindering foreigners from owning properties also is a factor which must be visited. Other countries may not be willing to open up their markets if a country is protecting its own market. Without foreign investments a country losses foreign exchange, lack of exports means no foreign exchange as well hence low standard of living and reduced per capita income. However, in the current worsening climatic conditions, the depletion of the ozone layer is a great distress to the global communities’ interfering with the level of food production (Thomas A. Boylan., 2003, p. 55). A country that intends to grow economically should rely on its agricultural production for the benefit of the citizens so that the surplus products could be sold to other countries. It is important to recognize the interplay between development and law which is in real sense considered as relation ship between law and economics which is very important embracing development. However, considering the American department of law scholars who acknowledged that the rule of law plays an essential role in whichever country with developmental agenda and changing the pace of third world development through channeling foreign aid into westernizing their judicial and law systems. This proves the statement that law is an engine for social reforms globally (Philip, 2000, p. 76). Ireland removed restrictions on foreign ownership of properties and that became a turning point for its economy. It granted tax exemptions on all exports and thus encouraged business firms to export products which earned foreign exchange into the country. Competition was highly encouraged and this improved the quality of locally produced products. At the same time many firms which were unable to compete favorably closed down occasioning massive job losses. Exports were diversified even away from U.K markets. Government privatization of state owned corporations also helped alleviate spending (Thomas A. Boylan., 2003, p. 93). References Gordon Bigelow. (2003). , famine, and the rise of economics in Victorian Britain and Ireland. New York- USA: Cambridge University. Philip, J. C. (2000). Bust to boom?: the Irish experience of growth and inequality . New York- USA: Institute of Public admnistration. Thomas A. Boylan., T. F. (2003). Irish Political Economy. Washington - USA: Routledge. 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