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Ireland's political and cultural magazine
26 November 2014
O
F the 196 appointments to state boards
made by the current Coalition, only 35
resulted from open public competition.
Pay increments for civil servants – for length of
service not performance – remain in place. Only
0.75% of civil servants received less than three
out of five in the October performance reviews
which ground entitlements to the automatic pay
increments. Meanwhile the country is on the march
over Irish water and its bonus-for-nothing culture.
The Regulator has set it a target of only 8% in cost
reductions over the next few years. The percentage
is paltry because it is obliged to maintain double the
necessary workforce inherited from local authority
staffs until 2025 – following a deal with the unions.
John FitzGerald of the ESRI has said the
extra wages and other costs for the 2000
extra staff amount to around €150m a year,
or an extraordinary €90 per household.
In recent weeks, the Government promised to
deliver comprehensive reforms of the public sector.
As before, there are vague targets for transforming
the sector underpinning much less vague giveaways to
insiders. In exchange for reversing pay cuts imposed
in the two previous agreements with the unions,
the State is promising some easing in the absurdly
ineffective procedures for removing incompetent
employees. The former is a tangible, enforceable and
easily monitored commitment: either new pay flows or
it does not. The latter is completely non-transparent
and unenforceable. No-one, beyond senior civil
servants, will ever have any real proof as to whether
or not the new regime is working. No-one in the
public service has any incentive to make sure it does.
As pay, promotion and performance awards remain
detached from actual productivity, no fine-tuning
can ever deliver measurable gains in performance.
And of course Public Sector Reform Minister
Brendan Howlin failed to implement the €75m
reduction in civil-servant allowances he promised
some years ago, out of the total of €1.5bn in such
perks. In the end the only allowance abolished was
a €218-a-night payment for civil servants who
represent Ireland at meetings abroad. Of course
even straightshooter Leo Varadkar suggested it
was worth retaining the allowances so as not to
damage the Croke Park deal. “We have to weigh
up the consequences of any action”, he said at the
time. “It has been determined that allowances
and increments, like core pay, are protected by
the Croke Park Agreement and for €75m it wasn’t
worth throwing the agreement in the bin”.
Some public-sector workers still get paid 30
minutes a week “banking time” to cash cheques, even
Any fool can
see, and
the detail of
recent surveys
confirm,
improvements
have been
mimimal
Constantin Gurdgiev
OPINION
INTERLOPER
Chimerical
competitiveness
November 2014 27
though salaries have been paid electronically for a generation.
Others are entitled to two ‘privilege’ leave days which were
originally introduced back in the 1940s to allow them to make
their ways back to Dublin from the country after a bank holiday
weekend when the trip might have taken a day. And some civil
servants benefit from a paid half-day’s leave for Christmas
shopping. Employees of the Marine Institute get an allowance for
going to sea, soldiers get an allowance for handling explosives.
Inland Fisheries get an Eating on Site allowance and Advisory
Counsel Grade II in the Attorney General’s Office get an ‘Acting
Up’ allowance for doing the work of an Advisory Counsel Grade I.
Furthermore there is to be no reform of unsustainable
public-sector pensions. There are no changes to the
imbalances between public and private sectors’ employees,
which are a multiple of even the imbalances in pay between
the sectors. There will be no reform of the
performance-rating and monitoring systems.
There is a growing public recognition in Ireland that
the current Government offers little real reform of our
political culture and the system of governance. This
all contradicts recent surveys of global institutional
and structural competitiveness that have generated a
lot of ‘feelgood’ publicity for Ireland’s political leaders.
Last month, the World Bank released its Doing
Business 2015 survey results. Ireland’s overall
rankings improved by four places from 17th in
2014 to 13th, the best reading since 2012.
The good news prompted a flurry of excited press
releases and a chorus of minstrelling Ministers. Even
our reserved Minister for Finance, Michael Noonan
has lauded Ireland’s improved position. “I welcome
the continued strong performance by Ireland in
the Doing Business report, which is reflective of the
ongoing reforms being implemented in Ireland’s
business and regulatory environment as we continue
to improve our competitiveness”, he drawled.
The praise, however, came with a kicker.
The sub-components of the survey reveal that
Ireland’s gains came almost entirely from a massive
jump in our rankings within one category. In the
(hardly determinant) ‘Getting Electricity’ rankings we moved
from 139th position in the 2014 survey to 67th this year. There
has been a marked decline in the length of time required for
business to obtain an electricity connection. Which is great. And
the cost of compliance fell, as a share of income per capita. But
it happened because our income per capita rose, not because
the heavily-regulated energy sector became more efficient.
The World Bank survey largely fails to reflect the bleak
reality of Irish energy. According to the Irish Academy of
Engineering, since 2007 our energy-price inflation outpaced
the OECD average by 45 percent. Household electricity prices
in Ireland are up almost 30 percent in the last three years.
Our ranking in the ‘Starting a Business’ category placed
us 19th worldwide in 2015 compared to 21st in 2014 –
a fine if small improvement. The gains here were driven
by a significant drop in the number of days required for
new-business registration. But the number of procedures
and registration costs remained unchanged.
We gained two places from 52nd place to 50th in the
‘Registering Property’ category rankings. The time
taken to register a property has reduced but the cost of
Chimera:
‘a thing
which is
hoped
for but is
illusory’
The World Bank
Doing Business
2015 survey
shows Ireland’s
ranking
improved by
four places
from 17th
in 2014 to
13th, the best
reading since
2012
“
28 November 2014
complying stayed the same. In other sub-
categories, things were much less positive.
When it comes to dealing with construction permits,
Ireland ranks slipped due to recent Government
reforms. A year ago, Ireland was ranked 117th in the
world for ease of securing a construction permit. This
time around we are 128th. In an economy allegedly
starved of new building activity the World Bank
estimates that the cost of obtaining a commercial
property construction permit is around 9.5% of
the total value of the property, up on 8.9% before
the reforms. It takes on average around 150 days to
finalise a construction permit for the surveyed type of
projects, up on 132 days in the
previous study. For comparison,
in Germany the cost is 1.1%
and a permit can be obtained
on average within 96 days.
Meanwhile, in the area where
the Irish Government has
spent most of its attention and
resources – getting credit into
the economy – our performance
fell by four places. For ‘Getting
Credit’ we ranked 19th in the
2014 study, falling to 23rd
this year. Across all survey
measures that comprise this
category, Ireland simply
stayed in the same place over
the last 12 months. Which
meant that global-credit-
condition improvements have
pushed us down in the world
rankings. In today’s world,
standing still is a loser’s game.
The Jobs Minister, Richard
Bruton, has said that reforming the regime for the
enforcement of contracts through changes in the
way the courts work is one of the Government’s
commitments to improving Ireland’s institutional
competitiveness. Yet, in the category relating to
enforcement of contracts, Ireland’s rank deteriorated
from 17th in 2014 to 18th in 2015, while in the
category covering resolution of insolvency there
was no improvement year on year (rank 21st).
All in, our competitiveness score has declined
by 2 percent between 2011 and 2015, covering
the period since the current Government came
into office. Ireland is now down four places from
the time the Coalition won the General Election.
The World Bank survey was one pat on our
Government’s shoulder. Another one came
courtesy of the Prosperity Index 2014 published
by www.prosperity.com. Measuring country
performance across eight social, economic
and governance categories, the index placed
Ireland twelfth in the world for socio-economic
wellbeing. Which sounds brilliant, except this
represents a decline in our ranking from 10th
place in 2012 – the dark days of the crisis.
Although our economic performance improved
from 33rd in 2013 to 29th in 2014, the latest reading is
still worse than the 25th place we occupied in the world in
2012. The ‘Entrepreneurship and Opportunity’ sub-index,
measuring the reforms that Minister Bruton was lauding
this week, ranks us as the 16th economy in the world, which
is two places behind where we were in 2012 and 2013.
Since 2012, there has been absolutely no change in our
ranking for Governance. Personal Freedom ranks for Ireland
have depreciated from fourth in 2012 to eighth place in 2013,
and to eleventh this year. Of coures the cornerstones of the
Election 2011 promises were to political, administrative,
and regulatory reforms. To make Ireland the best little
country in the world in which to do business. Based on the
Prosperity Index, these reforms appear chimerical.
The stultifying, static consensus on the public service
was never eviscerated and still festers, belying vaunted
new competitiveness. The surveys show it. •
Ireland: Ease of doing business; by rank
Ireland’s Scores: 2014 relative to best performance 2009-2011 (% change)
The Prosperity
Index 2014
placed Ireland
twelfth in
the world for
socio-economic
wellbeing, a
decline in our
ranking from
10th in 2012 –
the dark days
of the crisis
“
OPINION GURDGIEV
November 2014 29
