Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. I'm Carol
Speaker 1: Masser and I'm Tim Stanovik. Welcome to the Bloomberg Business
Speaker 1: Week Extra. It's a weekly podcast bringing you a highlight,
Speaker 1: a favorite interview from the week, just something that stood out,
Speaker 1: And this week it's with the CEO at i D
Speaker 1: A Ireland, Martin Shanahan. He oversees Ireland's government agency that's
Speaker 1: responsible for attracting and developing foreign direct investment into the country. Yeah,
Speaker 1: and at one point in January, tim Ireland had the
Speaker 1: fastest and highest spike in coronavirus cases in the world,
Speaker 1: and that was followed by one of the most stringent
Speaker 1: lockdowns over in Europe. Ireland is also among those European
Speaker 1: nations that have temporarily halted the use of the astra
Speaker 1: Zeneca COVID nineteen vaccine. Our conversation covered a lot of ground,
Speaker 1: including Brexit, corporate taxes, growth, tourism, and of course the
Speaker 1: impact of the pandemic. And that's where we started. Supposed
Speaker 1: like all countries, you know, it's been a very difficult
Speaker 1: year for countries, for citizens and indeed for for companies.
Speaker 1: But I think we are getting through this as you
Speaker 1: mentioned in your introduction, we've had a difficult January February,
Speaker 1: but we have seen infection rates for all hospitalizations fall. Thankfully,
Speaker 1: that's fall and like all of the countries, we are
Speaker 1: rolling out our vaccine program at the moment, so we
Speaker 1: are still in a reasonably high level of restriction, but
Speaker 1: we're hoping come the next number of weeks that we
Speaker 1: will be able to start to on wind some of
Speaker 1: those we've seen school children start to go back to school,
Speaker 1: so slowly but surely we're getting back and we are
Speaker 1: getting the most vulnerable vaccinated at the moment, and we
Speaker 1: hope that to be able to extend that program over
Speaker 1: the coming months. Obviously, availability of vaccines is really what's
Speaker 1: limiting us at the moment, and so it's it's supply
Speaker 1: rather than anything else. Yeah, looking at the Bloomberg Vaccine
Speaker 1: tracker right now, and it shows that nine percent of
Speaker 1: the population in Ireland have received at least one shot
Speaker 1: of the COVID vaccine and three point three percent of
Speaker 1: the population is at this point fully vaccinated. I mean,
Speaker 1: just anecdote speaking, how do you feel like it's going
Speaker 1: Are you starting to hear of more and more people
Speaker 1: and know, more people who are getting vaccinated. That's how
Speaker 1: it started for us here. Yes, I think we are
Speaker 1: him and I'm quite close to this as well, So
Speaker 1: maybe you know, I I hear a lot about this
Speaker 1: every day, but I think, you know, we are slightly
Speaker 1: ahead of the European average in terms of the numbers
Speaker 1: vaccination at this point, but undoubtedly Europe is behind I
Speaker 1: think the US and indeed the UK and Israel in
Speaker 1: terms of the numbers that are vaccinated. And but certainly
Speaker 1: undoubtedly we are seeing the effect. And you know, where
Speaker 1: people have been vaccinated, and again, like other countries, we've
Speaker 1: started with the most vulnerable elderly, those with serious medical conditions,
Speaker 1: and we have seen the vaccine is working. And and
Speaker 1: you know, so I think there's renewed hope everywhere because
Speaker 1: of the advent of new therapies and indeed the options
Speaker 1: we have now around vaccines. Yeah, the Bloomberg Vaccine Track
Speaker 1: says that the EU has a seven point seven percent
Speaker 1: of the entire population with one with one does so
Speaker 1: I am wondering how this is all. How you're thinking
Speaker 1: about this when it comes to attracting foreign direct investment.
Speaker 1: How how do you do you think does does the
Speaker 1: coronavirus pandemic. Is this setting back the goals that you
Speaker 1: had over the last few years, majorly in terms of
Speaker 1: attracting businesses to the country. No, actually, and I suppose
Speaker 1: what we've seen in in Ireland is a kind of bifocation,
Speaker 1: and I think we're not unique in that regard, where
Speaker 1: we've seen the domestically traded economy, particularly retail, hospitality, also
Speaker 1: the tourism sector and construction to some extent impacted and
Speaker 1: impacted very heavily. So undoubtedly the pandemic we have felt
Speaker 1: it in Ireland. But actually those sectors which are dominated
Speaker 1: by FDI in Ireland, which are technology, pharmaceuticals, medical devices,
Speaker 1: international financial services, have proven extraordinary resilient. And I suppose
Speaker 1: Ireland has really over the last number of years that
Speaker 1: on those sectors, really modern sectors that underpinned a modern economy,
Speaker 1: and they have proven really resilient during this period both
Speaker 1: the install base of investments here but also for twenty
Speaker 1: we only saw a six percent drop in the number
Speaker 1: of investments that we have had into Ireland, and Ireland
Speaker 1: is one of the few countries that also posted positive
Speaker 1: economic GDP growth in twenty twenty modest at three point
Speaker 1: five percent, but positive nonetheless though, uh and it is
Speaker 1: foreign direct investment and those companies, particularly in pharmaceutical and
Speaker 1: technology firms that are driving that. Martin, we were just
Speaker 1: talking about a story on the Bloomberg Um about how
Speaker 1: Europe is moving toward um vaccine passport so that people
Speaker 1: can move around from country to country. Do you think
Speaker 1: we need something like this, especially on a corporate level,
Speaker 1: you know, with companies that you know work for, companies
Speaker 1: that might be in another country. Yes, Carl, I mean think,
Speaker 1: as you know we now look forward to opening up
Speaker 1: there obviously needs to be ways of verifying that that
Speaker 1: can happen safely. The European Commission has proposed a digital
Speaker 1: Green Path and we're waiting at the moment to see
Speaker 1: the details of that presented. But I think essentially, as
Speaker 1: I understand that, we're looking at proof a person has
Speaker 1: been vaccinated, results tests for those that couldn't be vaccinated,
Speaker 1: you know, in terms of testing for a COVID and
Speaker 1: information on COVID recovery where where that's necessary. And but
Speaker 1: this is I think it's very complicated. I think, you know,
Speaker 1: you we need to respect data protection rules, we need
Speaker 1: to respect security. We need to respect privacy. So I
Speaker 1: think you know, we're gonna have to tread slowly and
Speaker 1: make sure that we get this right, and that's obviously
Speaker 1: what the Commission is doing at the moment. Can you
Speaker 1: give us a general idea about how your conversations over
Speaker 1: the last year have changed with executives companies around the world.
Speaker 1: Old when they are thinking about investing in Ireland before coronavirus,
Speaker 1: and what are they like now? Yeah, so, um, I
Speaker 1: think you know, firstly, they've changed because we're doing this
Speaker 1: all virtually, and like everybody else we have we've pivoted
Speaker 1: virtually and some companies have managed to make that transition
Speaker 1: very quickly and maybe some less so. And it's obviously
Speaker 1: much more difficult for companies making physical goods manufacturing. We
Speaker 1: have kept all of manufacturing opened in Ireland. Most of
Speaker 1: it is deemed essential because of the types of products
Speaker 1: that are being made. In terms of the discussions with executives,
Speaker 1: you know, the fundamentals of investing in a country still
Speaker 1: remain the same. You know, executives are interested in those
Speaker 1: same things what everybody is discussing obviously as what is
Speaker 1: the future of work? And you know, I think it's
Speaker 1: clear at this point that we're not going back to
Speaker 1: where we were, you know, Monday to Friday core hours
Speaker 1: in the office. There's going to be much greater flexibility.
Speaker 1: I think that's a given at this point. But also
Speaker 1: there is a role for the office, and I think
Speaker 1: that's clear, and that's what we're hearing from the companies
Speaker 1: we're engaging with because for reasons of innovation, collaboration, and
Speaker 1: building team culture, on boarding new team members is a
Speaker 1: big issue, and also ensuring that those coming into companies
Speaker 1: at more junior levels that there is some sort of
Speaker 1: training or apprenticeship model, much easier obviously to do on
Speaker 1: site than it is to do remotely. So there is
Speaker 1: still a future for the office and that regards I
Speaker 1: want to get your thoughts on potential tax in the
Speaker 1: tax increase for corporations here in the United States. We
Speaker 1: had a great story Nancy Cook and Laura Davison colleagues
Speaker 1: breaking this news yesterday that that President Biden is eyeing
Speaker 1: his first major tax site since in this next economic plan.
Speaker 1: One of those includes raising the corporate tax rate from
Speaker 1: how would that change the way that American companies think
Speaker 1: about doing business in Ireland? Would it make Ireland more attractive? Well, listen,
Speaker 1: I mean I think it's it depends on the overall offering.
Speaker 1: And similar to when I suppose the last administration introduced
Speaker 1: its tax changes, and I think I said at the time,
Speaker 1: you know the devil is basically in the detail here,
Speaker 1: and you know how it's done and what counteracting measures
Speaker 1: are introduced to support businesses. I think you have to
Speaker 1: see all of that. The headline rate is one thing.
Speaker 1: I think also we are obviously facing into probably significant
Speaker 1: global changes on the tax front. During the course of
Speaker 1: this year. The o E c D process has I
Speaker 1: think increased momentum. John as Yellen has I think made
Speaker 1: it clear that there will won't be a voluntary opt
Speaker 1: out for US companies and and therefore I think the
Speaker 1: prospect of a deal politically on global tax is probably
Speaker 1: further ahead now than it has been for some time.
Speaker 1: But again, until we see what happens there under both
Speaker 1: the billers they're looking at, it's it's difficult to say
Speaker 1: exactly what impact it will have. From Irlin's perspective, you know,
Speaker 1: we've at twelve and a half percent corporation tax rate.
Speaker 1: It is consistent, it's transparent, and it's stable and has
Speaker 1: been there for a long time. And I think, you know,
Speaker 1: while people look at our rate sometimes and think that's
Speaker 1: the answer potentially because it's a low rate, it's actually
Speaker 1: around the stability of the race is probably the most
Speaker 1: important thing, right and interesting right at a time where
Speaker 1: all of a sudden you could see the US corporate
Speaker 1: tax rate go from to higher rate, like a lot
Speaker 1: of movement in just a few years. Um. Having said that,
Speaker 1: I gotta ask you, Martin, what's the outlook? What does
Speaker 1: the global economic environment look like for you and for
Speaker 1: Ireland uh post pandemic, especially at a time where I
Speaker 1: think there's still a lot of countries that are thinking
Speaker 1: about what do we need to do domestically to heal
Speaker 1: our societies after COVID. Yeah, I think it's very challenging,
Speaker 1: I think is the short answer. I think that you know,
Speaker 1: we we had hoped probably that we would have on
Speaker 1: wound restrictions in a lot of countries before now. Having
Speaker 1: said that, I think, you know, if you're told us
Speaker 1: a year ago that we would have the vaccines options
Speaker 1: that we have and that they were tested and now
Speaker 1: being deployed, I think that's a really fantastic outcome from
Speaker 1: an FDI perspective. I mean, all the global projections suggest
Speaker 1: that FDI globally are going is going to decline significantly
Speaker 1: during the course of one again some with estimates up
Speaker 1: to decline. So it's going to be a really challenging
Speaker 1: environment for for US and for other colleagues across the
Speaker 1: globe as we seek foreign direct investment and um, you know,
Speaker 1: there's going to be a smaller pool and everybody obviously
Speaker 1: is going to be looking for that investment because they
Speaker 1: are trying to drive economic growth within their economies to
Speaker 1: pay for the cost of the pandemic. And there's been
Speaker 1: significant costs for all countries, you know, whether their healthcare costs,
Speaker 1: whether their supports to business or their support to individuals
Speaker 1: in terms of a social safety net. How happy are
Speaker 1: you that we're not talking Brexit? You know, I'm always
Speaker 1: happy to talk breximitly, Carol, think like how many times
Speaker 1: we've talked about it in the past years. It's done
Speaker 1: to some extent in that we you know, we are
Speaker 1: now talking post BRIGS that we trade and cooperation agreement,
Speaker 1: and that's the positive. You know, I think I would
Speaker 1: have said this time last year that the you know,
Speaker 1: the objective is to have an agreement between the EU
Speaker 1: and the UK. It's not ideal, It probably isn't as
Speaker 1: comprehensive maybe as we would have liked, but you know,
Speaker 1: it's an agreement nonetheless, and I suppose the core aspects
Speaker 1: of that from Ireland's perspective are in there. And one
Speaker 1: of those core aspects, obviously was that we prevent a
Speaker 1: hard border on the island of Ireland between north and size.
Speaker 1: That has been achieved, albeit it has been very challenging
Speaker 1: to achieve that, and you know, implementing all of this
Speaker 1: now is the challenge we're going to be dealing with
Speaker 1: in the days Monsign years ahead. Hey Maarton, we only
Speaker 1: have ten seconds left, but a year from now, are
Speaker 1: we doing this in person? Are you back here with
Speaker 1: us in the studio? I certainly will be making ver
Speaker 1: VF for to do that, and I hope you guys
Speaker 1: will have me. And let's be optimistic, you know, um,
Speaker 1: you know, certainly I've an optimism bias, and uh, I
Speaker 1: think we will be. That was the CEO and I
Speaker 1: d a Ireland. Martin Shannahan. You've been listening to Bloomberg
Speaker 1: Business Week Extra be sure to listen to our Bloomberg
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Speaker 1: I'm Tim Stanavan and I'm Carol Masser. This is Bloomberg