BUSINESS OPINION:Why send John Bruton halfway around world if the Government is lukewarm on his role, writes JOHN McMANUS

JOHN BRUTON will shortly take up his role as chairman of IFSC Ireland. His job – which has a six-figure salary – is to drum up business for the IFSC, and he will hit the the ground running, with trips to Hong Kong and the Gulf already scheduled.

On the face of it the appointment is a very good idea. The IFSC has weathered the global financial storm far better than many expected and there are opportunities for further growth.

Bruton is a former taoiseach and a former EU ambassador to the United States. He has an international profile and, one presumes, plenty of contacts to help open doors.

The appointment is further recommended by the fact that it is a private sector initiative, funded by a coalition of bodies such as the Federation of International Banks and the Irish Stock Exchange, all of whom have a vested interest in seeing more business in the IFSC.

Few can fault such a practical demonstration of how to put your money where your mouth is. But paradoxically, while its private sector genesis is to be applauded, it may well be the Achilles’ heel of the so-called IFSC Czar.

The problem is summed up by the following question: What is the point of sending Bruton halfway round the world to hear about the sort of legislative and policy changes potential IFSC investors would like to see if he has no commitment from the Government to even listen to him, never mind implement them?

The Government would seem to be at best lukewarm about the appointment. The IDA is said to be positively hostile, given the overlap between his role and its own mandate.

While the IDA’s instinct to protect its turf is understandable, the standoffishness of the wider Government seems surprising – until you take the events of the last few years into account.

Arguably the single biggest criticism that can be laid at the door of the Department of Finance is that it did not act as some sort of circuit-breaker in the very unhealthy relationship that developed between the political system and the banking and property sectors.

The relationship between government ministers, senior public servants and what could be called the Irish business elite was simply far too cosy.

Without a doubt, the absence of a strong, independent department of finance to hold it in check contributed to our current problems.

We don’t really know where the ideas for the various tax breaks and other policies that fuelled the property boom came from, but it’s not unreasonable to presume that they came from the private sector, and were sold to Government as job-creating initiatives in much the same way the fruits of Bruton’s globetrotting will be.

And in much the same way as they in fact turned out to be get-rich-quick schemes for a small elite, the danger exists that initiatives promoted by Bruton in good faith could also turn out to be toxic.

In many ways, the emergence of a new culture of scepticism in the department – if that is what is actually going on – should be seen as a good thing.

The trouble is that if the economy is going to return to growth we are going to need some fresh thinking. The Government clearly ran out of ideas long ago, and the policy-making ability of the Civil Service has been hollowed out by the clientelism and backscratching nature of our politics.

There still needs to be a productive dialogue between Government and the businesses, both domestic and international, that have ideas that could lead to export-led recovery. The Government gives every appearance of thinking such a recovery will come about of its own accord if enough Ministers talk about it on a regular basis.

There are plenty of examples of how this has worked successfully in the recent past. One of the other areas of the economy that has shown resilience is the technology sector – and in particular the Irish operations of global internet titans such as Google.

One of the primary reasons why these companies came here, or in the case of the longer-established ones, why they have decided to stay, is the very attractive tax treatment of intellectual property. These changes only came about because – not surprisingly – the government sat up and listened when these companies made clear what they wanted.

It’s safe to assume that the door will always be open to big multinationals, and one hopes to John Bruton. It will be much more difficult to find a way to harvest homegrown ideas while avoiding the pitfalls of the past.