Wednesday, August 31, 2011

More positivity for the Irish economy - why am I worried?

Now I'm worried. So many international pundits have been rushing recently to extol the virtues of the Irish economic recovery that one has to start remembering that we've been here before – and it didn’t work out well.

Think about it. In the mid nineties the term “Celtic Tiger” was coined to describe what appeared to be a runaway success in terms of becoming a prosperous nation in the shortest possible time. We could do no wrong. Retired Irish politicians and business leaders toured the global lecture circuit telling the rest of the world how it should be done. The Irish bought anything that came up for sale, whether it was Polish banks or Chicago real-estate.

The truth of the matter is revealed in this video clip by Alan Mattich of Dow Jones Newswires. Ireland is a small, very open economy. We depend on international trade, much of it carried out by non-indigenous Multi-national corporations that have been attracted here by our corporate tax rate, combined it must be said by the very real facts that we have a sharp, young, well educated workforce, are the only English speaking state in the Euro zone (Memo to government: don’t even think about leaving the Euro or doing anything that might endanger it as a unit of currency) and enjoy the benefits of having one of the most professional and effective development agencies, IDA Ireland, in the world.

But it is so, so easy to lose the run of oneself. Will we be more circumspect this time around? And if so, for how long?

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