With an unemployment rate of 14.6% equating to 324,000 people and with 420,000 overall on the Live Register which includes all recipients of employment-related benefits, you would have thought it was a national priority to encourage investment which might generate jobs.
So, when NAMA announced in May 2012 that it was going to invest €2bn in its developments over the next four years, there was a warm welcome for the announcement. NAMA itself said that the investment might create 35,000 jobs and that would make quite a dent in the unemployment numbers. Not just that, we know that construction-related investment is one of the best ways of stimulating growth more broadly throughout the economy.
At the time, NAMA was coy about when it would spend the €2bn, and declined to answer questions on the phasing of the expenditure.
But thankfully, we have the IMF involved in the running of this country, and in their latest staff review report on the Irish economy published this week, they say the following:
“To support its asset disposal and market restoration objectives, NAMA plans some €2 billion in capital projects in Ireland, phased in a back-loaded manner through 2016, with risks to be managed by limiting project exposure at any given time”
We know from the NAMA Act and from Minister for Finance Michael Noonan’s letter to NAMA in March 2012 which ordered the Agency to temporarily finance the repayment of the €3.1bn Anglo promissory note, that NAMA has a wider remit than just managing its loans. It has access to ultra-cheap financing and has a massive portfolio of property, a good deal of which requires development and it can act and be ordered to act in the interest of the wider economy.
Which all begs the question – why is NAMA “back-loading” its investment when the need is right now?
NAMA was asked for a comment on the statement in then IMF report, but none was forthcoming at time of writing. That is not to say that NAMA has not been investing in the economy and there have been announcements of shopping centre developments and there is speculation about a major office development in Spencer Dock. But why “back-load” the investment?