ECONOMICS FOR GLOBAL BUSINESS - Essay Example

The general prognosis is that even though the Irish economy had in the recent past undergone a massive cratering, it has been on a slow but steady path towards sustained growth. The fact that it is ranked so highly in terms of economic freedom augurs well for the general condition of the Irish economy. That freedom, it is said, is based on a stable legal climate that has a deep tradition of respecting rights related to property, as well as a regulatory environment that is conducive to openness in business as well as in terms of supporting Ireland’s efforts to make its economy competitive in the global economic arena (The Heritage Foundation 2012).

That general climate is characterized by several key strengths in key areas such as the rule of law, the role of government, efficiency in regulation, and openness of markets. The legal environment, for one is said to be robust and stable, with Ireland having the reputation of having one of the most stringent regimes for the protection of intellectual property rights, as well as in the securing and honoring of contracts. Moreover, the regard for law extends to a low level of corruption in the country, making the country a favorable destination for those wanting to deal with a clean and honest government.

Meanwhile, as far as government is concerned, its recent levels of spending have been cited to reach a total of close to 50 percent of the country’s Gross Domestic Product or GDP, resulting in the ballooning of the country’s deficit. The level of public debt of the country, as a result also, has reached levels equal to about 90 percent of the country’s GDP. The government has come to impose a tax on all business activities amounting to about 28 percent of the GDP, with income taxes at 41 percent, corporate taxes at 12.

5 percent, and consumption taxes making up a substantial portion of total tax revenues as well, in the form of VAT and taxes on capital gains. Meanwhile, the government is said to have done well keeping monetary policies relatively stable, while at the same time fixing macroeconomics so that costs of labor are reasonable, costs of business establishment are minimal, and red tape associated with the conduct of business likewise being considered minimal. In terms of market openness, meanwhile, the facts are that tariff rates for products entering Ireland have been considered lower in comparison to other EU states, even as barriers that are not related to tariff are substantial, and somewhat negate the lower tariff regime in the country.

Investors are treated relatively with parity regardless of whether investors are local or foreign, in an environment where the Irish government seems to have done well to make the investment climate efficient. The recent past has seen the country cave in because of the financial crisis tied to the property bubble there and elsewhere, as the banking system in Ireland had been similarly overexposed alongside banks in the other EU states, but as of 2012 the banks have been noted to have achieved a certain level of capitalization