Renaissance Ireland
Renaissance Ireland
Author's cottage in the '80s
- an image of traditional Ireland.
It is changing.
For most of my life, Ireland has been a poor country by Western standards. Indeed visitors used to comment that touring this beautiful land was like going back in time. No freeways, no industry to speak of, cattle still being driven along the roads, little crime, a leisurely pace of life. Lots of golf courses. A fine literary tradition based mostly on dead authors (and/or those who had fled the country). Nice little pubs to relax in.
A great place to visit or even to retire to but a terrible environment for business unless you were a publican, owned one of the larger farms or worked for the state (and almost everyone seemed to work for the state).
My old economics professor once remarked back in the early sixties, when I was at Trinity College, Dublin, wrestling with that particular discipline, that "This bloody country (Ireland) is the most socialist state outside the Soviet Union" and then swept out of the lecture theatre in high dudgeon without adding a word. That single message was his lecture for the day.
Taxes were too high, there was no vigor in the place and the phones did not work - and getting one could take two years. And on top of all that, there was the reality of terrorism in the North of Ireland. Well over 3,000 dead in thirty years and ten of thousands horribly injured (all out of a population of only 1.5 million in the North).
In fact it looked as Ireland was going to drift along as a kind of offshore theme park for the US and Europe indefinitely.
And then change sneaked up and like some rocket whose fuse has been lit but seems to have gone out, this county suddenly really started to go places.
FAST! It is astonishing. It is mind boggling. It is magnificent. And apart from the traffic - a separate and painful subject - it is, in many ways, truly exciting. Albeit that the price is that the mystical, hopelessly impractical but romantic Ireland is changing. Perhaps worst of all for me (a small problem in the scheme of things) is that the traditional purple smoky color on the hills in the West of Ireland is vanishing. European grants to sheep farmers in the West have made for an excess of sheep, and overgrazing. The heather that gave the hills their marvelous mysterious purple-haze look is being been eaten.
For generations the assumption has been that to achieve material success you had to leave Ireland, but at last Irish men and women and their children are beginning to realize that they can make it here. And make it from here.
In a major cultural change, Ireland is becoming (it is still very much a work in progress) an opportunity culture - the land of the possible.
Hard to believe if you are someone like me who has seen this county molder beautifully in the damp for decades but a true statement.
A few economic facts to illustrate the point.
- Ireland is currently the fastest growing county in the European Union with a growth rate about 400% of the average. This year our economy will grow by something in excess of 11% (eleven - not a misprint) and we have been growing at over 6% for something like six years. Our growth rate for the next couple of years, even factoring in the Asian crisis is estimated at 8-%.
- Unemployment, the bane of Ireland since the foundation of the State as an independent nation in 1922, is dropping like a stone and at just over 8% is now under the European average (though still nearly double that of the US). A decade ago, something like 20% of our workforce had no jobs.
- Our budget is in substantial surplus.
- Our balance of payments is in surplus.
- Our national debt, as a percentage of Gross National Product, is in rapid decline.
- The Irish economy is now considered strong enough for Ireland to be joining the new European currency, the Euro, which starts in January 1999.
- Our telecoms market has now been fully deregulated and other traditionally state monopolies are being privatized.
- Our corporate taxes are amongst the lowest in Europe.
- Return on invested capital by foreign companies who invest here - many of them are from the US - is the highest in Europe.
- Ireland is now the second largest exporter of computer software in the world.
- Ireland is now the European headquarters and/or principal manufacturing base for many of the leading US computer corporations including Apple, Microsoft, Intel, Dell, and Gateway to name but a few.
- Ireland is a leading producer of pharmaceuticals and indeed Viagra is made here.
- Ireland now has one of the fastest expanding financial services centers in Europe.
- After over forty years of economic isolation and seeing the economy stagnate, Ireland decided to open up to free trade. In 1967, the Anglo-Irish Free Trade Agreement was signed and in 1972 Ireland joined the European Common Market - which became the European Union. Free trade became a good thing and the Irish started to discover competition and the fact that they were quite good at playing the game. In effect, private enterprise started to become respectable and after a learning curve, success started to breed success with critical mass being reached in the early nineties. Effectively, it took nearly a generation for the economy to make the transition from a closed socialist state to an open free market economy.
- Years of investment in education started to pay off. A better population started to look around, travel, feed back what had been learned and demand change since clearly the existing structures were not working.
- Politically, a new generation of better educated more outward looking politicians started to get elected and, once elected, to be open to ideas that worked - as- opposed to schemes which put money in their own pockets. Not that I am suggesting that the traditional political culture has been entirely swept away but certainly the climate has been dramatically improved. Politicians are now expected to deliver more than promises. Probably the most visible manifestation of the change in tone and move to higher standards was the election of Mary Robinson as President in 199? President Robinson is a woman of unquestioned integrity whose example had a profound effect on both the political culture and the aspirations of the voting public. And she also gave a huge boost to women's self confidence and Irish women are now increasingly important in ever facet of life and particularly in questioning the status quo.
- Private enterprise was actively encouraged through a series of tax breaks.
- The excesses of the trade unions were curbed and wage inflation brought under control through a series of national agreements. That boosted confidence and overall inflation started to be tamed.
- The economic management of the economy was vastly improved. Government expenditure was trimmed. Borrowing, previously a reflex policy, was reined in. The actual management of the national debt was removed from the traditional civil service.
- The Irish government started to target the new fast growing US computer industry and, in turn an increasing number of those corporations realized that Ireland, with an educated English speaking workforce, a good infrastructure and pro business policies would make an ideal springboard for entry into the expanding European market. Initial successes led to further expansion and soon, aided by an increased investment in computer science education, there was a steady increase in computer literacy and in the availability of qualified labor.
- In a further initiative of great significance, the Irish government put through the legislative structure for a low tax financial services industry.
- The European Union embarked on a program of upgrading the infrastructure of its less advantaged members and started to pump something like $9 billion into Ireland to improved roads, transport and other facilities. Aided by matching funds that promoted a building boom which was then further fueled by the expanding economy needing more industrial buildings, houses and retail outlets.
- The economy went into high gear in or around 1992 and has been operating at that pace or faster ever since.
- The very latest development of significance is that Ireland's entry into the European Monetary Union has meant that interest rates have had to be brought down dramatically to bring them into line with Europe's leading economy, Germany. That means cutting interest rates roughly in HALF. So for the first time in this author's lifetime, Irish business will actually have access to borrowings and capital at a reasonable rate.
Some of the reasons for this economic turnaround - which has also brought a cultural boom - are as follows.
One of the things I have been most struck by when travelling is that old but absolutely valid cliché that success breeds success. When I was researching my first book GAMES OF THE HANGMAN in Switzerland, I was struck again and again by the quiet self confidence of the Swiss. They believe in education, thorough training, cheap money, good infrastructure, power from the bottom up and doing it right rather than doing it cheap. And they only have to look around to see that this approach works. There is a proven culture of success. In contrast, starting a business in Ireland - unless it was in property - used to be a almost a guarantee of failure. To paraphrase a great quote 'No good deed goes unpunished,' the appropriate saying might be 'No act of enterprise can (now could) survive the Irish business environment.'
Perhaps the most depressing aspect about starting a business in Ireland was that you could read in the eyes of the very people who backed you that you would fail.
It made the entrepreneur feel like he was going over the top in Word War I and the enemy were waiting, eager and had advanced warning. And he also knew that if the enemy did not kill him, his own side would destroy him because there was a well established culture of begrudgery. Success was resented. It showed up those who had not tried.
Well, the nineties have been a period of success and businesses no longer automatically fail so I live in hopes that a cultural change is taking place - but it is going to take time. So far, the underpinnings of our economic success are mainly US owned multinationals and marvelous that that is, it is not enough. For true cultural change to take place, we need to do shoulder a good portion of responsibility ourselves.
That has started but there is a way to go.
