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Thursday, 25th April 2024 |
| IFSC needs to harness the plans and ideas of a new generation |
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| Padraig Rushe looks back over the past twenty years of the IFSC and pays tribute to its hugely significant contribution to Ireland's economic recovery these past 20 years. However, he adds that perhaps now is the time to rekindle the vision, the enthusiasm and the dynamism that drove forward this unique project. |
Twenty years ago when the unusual notion of an international financial centre based in Dublin's derelict dockland was first mooted, Ireland's economy was very different to where it stands today. | | Padraig Rushe |
We had a national debt that was well over 100 per cent of gross domestic product; unemployment was almost 20 per cent, inflation was crippling and Ireland's best and brainiest had no option but to emigrate.
Twenty years on from those dark days, Ireland has been transformed into one of the strongest economies in the developed world, Ireland's best young brains are staying at home and the notion of an international financial services centre in dockland Dublin has proved to be an inspired brainwave.
Few 20 years ago would have dreamed of the glass and concrete edifices that now line Dublin dockland on both sides of the Liffey, full to the rafters with the household names of the global financial world. Who back in 1987 would have believed that many of the world's biggest banks, insurance groups, multinational corporations or funds industry specialist firms would be employing thousands of Irish people not just in the docklands but in many other of our cities and towns?
Since 1997 the IFSC has contributed some €6 billion in tax revenues and that figure excludes completely the income tax paid by the many thousands employed in the IFSC not to mention the value added tax on the discretionary spending of the comparatively well-paid thousands who are employed in the centre. The annual figure is now in excess of €1 billion. Not a bad return on the very modest capital outlay that supports the IFSC!
Quite simply, the development of the IFSC has been a hugely significant factor in Ireland's economic recovery these past 20 years. And so it is right that we should celebrate this achievement.
But we cannot become complacent about the success of the IFSC. Other jurisdictions are now putting in place the structures to try and compete more aggressively with us. There is certainly an increased competitive challenge facing Ireland in this regard, although anecdotal evidence suggests that we are still the location of choice for many global financial players.
There are reportedly a significant number of banking licence applications with the Financial Regulator; fund management and insurance/reinsurance sectors are still attracted to Ireland and with an ever increasing frequency we read of expansions by IFSC firms to places like Athlone, Dundalk, Limerick, Navan and elsewhere. Over the past year or so we should also have been encouraged by the number of new privately owned specialists firms that have been established here. There is certainly room for cautious optimism that growth in the IFSC will continue in the years ahead and that the centre can withstand the increased competitive challenge now evident.
But we must also now move ahead with urgency and complete the infrastructural development that in many ways has failed to keep the pace with these burgeoning businesses. While the extension of the Luas to the Point will certainly benefit access the area lacks a sense of vibrancy most notable in the evenings. Stack A must now be completed and creatively tenanted to improve the image and attractiveness of the IFSC.
For the past 20 years public and private partnership has worked hand in hand on committees and in industry groups to further the cause of the IFSC. Successive governments have maintained this momentum and our agility in adopting new European Directives has served us well. But perhaps in 2007 we may need to rekindle the vision, the enthusiasm and the dynamism that drove forward this unique project. Should we now not find a way to harness the plans and ideas of the new generation of IFSC professionals?
Perhaps we need an incubator fund to kick start some of these ideas? Back in 1987 we had no capital and the 'brains' were mostly emigrating. Today capital should not be a problem but is this new generation as visionary and up to the challenge? |
Padraig Rushe is a director in Bank of Ireland Corporate Banking.
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| Article appeared in the March 2007 issue.
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