Peace process key to southern success?

The Economist’s survey of Ireland is available on line, though most of it is subscription locked. This section from the summary piece makes for an interesting thought that the Tiger might have been in part dependent on the widely perceived success Northern Irish peace process:

“Peace in Northern Ireland has helped to boost the economy of the whole island. A visitor to Dublin, so lively and cosmopolitan today, would find it hard to believe that only a few decades ago it was gloomy and depressed. In the 1960s Ireland’s heavily agricultural economy, almost wholly dependent on exports to Britain, was only just emerging from the misguided protectionism that since the 1930s had been the main plank of Eamon De Valera’s ill-advised economic policy. Ireland had missed out almost entirely on Europe’s post-war boom; living standards were stagnating and emigration was in full flow. In 1960 the republic’s population was down to around 2.8m, the lowest in two centuries and a pale shadow of the 8m (for the whole island) in 1840, when this was one of the most densely populated countries in Europe. Many wondered if Ireland had a future”.

  • Davros

    Mick, I have this downloaded as a file from when it first made the news. If anybody wants a copy, e mail me.

  • Ciarán Irvine

    You’d expect better from the likes of the Economist. What a load of nonsense. As pretty much anyone who has been awake for the last 15 years knows, by 1994 the Tiger was already stalking the land, though nobody had actually come up with a name for it yet. All the work necessary to create the late-90’s boom was done in the 1987-1994 period.

    If the peace process has anything to do with anything, how come the north hasn’t shown an economic benefit 10 years on?

  • barnshee

    Here we go agin

    Uk joins EC ROI has to, ROI gets billions from EC (Mostly German and UK money) Claims huge economic success

    Ba Humbug

  • Ciarán Irvine

    Davros – how can we email you when you don’t have yer email addy in yer profile? 🙂

    Mail me that report would ya? cirvine@reevra.com

  • Davros

    Sorry Ciarán, I been around so long now I assumed everybody knows it 😉

    On it’s way .

  • willowfield

    Ciaran

    NI has shown an economic benefit.

  • Ciarán Irvine

    Davros – ta much lad!

    WF – I suppose it’s all relative…but I don’t see any substantial improvement in the macro picture or the strategic position of the NI economy. Youse should be doing much better by now given all the advantages. So why aren’t ye?

  • George

    Davros,
    could you send me that on.

  • Davros

    No problem George. It’s quite large , and has a few Newspaper articles at the end.

  • Moderate Unionist

    No doubt George will leap into action, so I’ll get my blow in first. The essential arguement by the economist having read all of the articles in the series is :-

    The improvement in the Irish economy, was driven initially by catch up from “Eamon De Valera’s ill-advised economic policy”, which happened to catch the tide of multinational investment (supported by an excellent IDA and polticial consensus) which provided a base for the nascent service sector, which reduced unemployment from 17% and brought more women into the workforce, which drove up the demand for property (and prices)and created a virtuous circle which greated the Celtic Tiger.

    It concludes that despite the successes of the Irish economy the circumstances have changed and it will be difficult to sustain or for others to repeat. The world economy is now truly global (Ireland’s international competitveness is falling) the Euro at 1.30 to the dollar will make exports difficult, interest rates are too low, property prices are too high,

    but the central thesis is correct. For an economy to develop, we need peace, political concensus and decisive leadership on the issue.

  • maca

    “but the central thesis is correct. For an economy to develop, we need peace, political concensus and decisive leadership on the issue.”

    Thing is we have always had peace (bar a couple of exceptions). Perhaps the perception of a few might have been different but anyone considering investing in Ireland would have done their homework.
    It’s bound to have helped where tourism is concerned but investment in industry, not so sure. JMOHO.

  • George

    Moderate Unionist,
    it’s Friday and I’m just looking forward to a weekend in Dublin town. Anyway the last great economic discussion went into this in great detail so I’ll just keep Davros’ pdf for my files and make a general comment on ongoing growth.

    I believe Ireland has caught up and can now keep growing at a faster rate than the rest of the EU (minus the accession countries who are in catchup mode) for the forseeable future.

    In order for the Irish Republic to maintain its potential growth rate, which is around 5%, the country needs around 30,000 new workers a year.

    At the moment we are getting this figure from returning Irish immigrants and Eastern Europe (30,000 since May).

    Also, high euro = cheap oil as well as dearer exports. Swings and roundabouts. We do have to lessen our dependancy on the US so maybe with the weak dollar, now is the time.

    As for Northern Ireland having an effect on economic growth, I doubt it. Money talks. It’s simply because the bottom line showed Ireland was the place to invest.

    In 2003, Ireland came top of net Intra EU25 Foreign Direct Investment with 16 billion euro, followed by Germany on 14 billion.

    As for external FDI:
    Ernst and Young October 2004:
    “The Irish market share of total foreign direct investment in Europe is 3% for the first six months of 2004, in comparison to 2% in 2003…
    Given the continued trend towards the East, this remains a very credible performance. Ireland continues to benefit from investment in traditional areas such as computing and software.”

    Or some other little facts that might help convince you that the growth isn’t over yet:

    US investment in Ireland in 2003 was more than 2½ times greater than American investment in China, and profits of US companies in Ireland in the same year surged by 45 per cent (weak dollar – swings and roundabouts again).
    US investment in Ireland was 4.7 billion dollars in 2003.

    Ireland is also the ninth largest investor in the US, so it’s moving both ways now.

  • Davros

    George , You need to clear your mailbox.

    There was an article in New Statesman by Patrick West linked on ATW (thanks David and Andrew)
    that I downloaded, if anybody is interested, about
    British Cultural Imperialism in the ROI – Boots, Tescos etc etc

  • Davros

    14

  • Fraggle

    I’d be interested in those articles too Davros.

    In my experience (and I spent all of last week driving my in-laws around the whole of ireland), Irish towns have so far escaped the identikit high street so evident in britain. irish towns have a lot more locally owned independent shops than similar sized towns in britain (where I live for about 7 years). A few months ago I was looking at the list of shops setting up in that new shopping centre in Dundrum (dublin version) and was struck by the lack of british chains. the chains were mostly non-british european.

    as for tesco, they have a particularly virulant business plan and they are a phenomonom even in Britain.

    boots have been in the south for years and have a large pharmacy network. however, they are not expanding and the big news in the pharmacy sector is the growth of indiginous chains such as IPOS and the german owned Uniphar (which is owned by the same company which owns britain’s largest pharmacy chain, Lloyd’s).

    I think you’d find that Britain’s representation on the irish high street is diminishing rather than growing. it is refreshing to visit an irish high street after so many boring identical british ones.

  • Davros

    On their way. I’ll be interested to hear what you think of the West article’s claims.

  • George

    Mailbox was clear,
    I only have 2MB’s. How big is it!?!

    Fraggle,
    you’re obviously not a woman. Belfast, with its British chains (not those chains, the other ones), would certainly be the number two shopping mecca after Dublin.

  • Davros

    Hold On . I’ll try again George.

  • Davros

    George- it’s 1.1 MB and I just got back

    Diagnostic-Code: …. This message is larger than the current system limit or the recipient’s mailbox is full. Create a shorter message body or remove attachments and try sending it again.

    I’ll strip the Other Newspaper articles and try again.

  • Fraggle

    George, I’m certainly not a woman. Luckily for me, my wife is and she reports that she is unimpressed by the shopping in Belfast.

    I am unimpressed by the New Statesman article. It is a silly anecdotal piece.

    I’ve dealt with Boots earlier, I confess I thought that it was longer established though. It is fast becoming a minor chain in the Irish pharmacy world. Importantly, the lucrative drug wholesale business is non-British. United Drug (which is linked to Sangers in NI), and Uniphar are irish as far as I am aware and the other main player is the German AAH (was once British – must be German cultural imperialism).

    He mentions that Guinness is now British. It is now part of a multi-national based in Britain and was always kind of british anyway. Arthur was pro-union etc.

    Manchester United and Celtic get a mention. Nevermind that they have always had a huge irish support. A silly example of him to make.

    Shelbourne Hotel is owned by someone British. Like no London hotels are in irish hands. Wasn’t the Savoy recently either bought or sold by an irish group?

    The exemples given are hardly earth-shattering.

    The coming of Swedish giants Ikea and H&M will have a larger impact in my opinion.

    A handful of highstreet shops and a few brandnames don’t change the fact that Irish trade with Britian is becoming less important (as a % of total trade).

  • Davros

    To me the significance of what he was saying is that it sounds as if Dublin is Morphing into Glasgow !
    All the City centres seem to be growing more alike.

  • George

    Fraggle,
    I have banged that trade with Britain drum on many occassions. It’s down to less than 15% now, Belgium is now nearly as important an export trading partner as the UK.

    Interestingly, if you plotted a graph, you would find that our dependence on the British is almost inversely proportional to our prosperity. The higher the % we export to Britain the poorer we are.

    The euro is changing a lot of things, including who we do business with. The longer the UK stays out the better for us in my view. We also import less from the UK now, which means less UK stuff on our shelves.

    In 1995, imports stood at 32% from the UK and 56.4% from the EU.
    In 2003, it was 28.6% from the UK and 55.8% from the EU.
    The big jump is China:
    In 1995, it was 1% of imports while in 2003 it was 4.6%.

    Far and away our biggest export market though is the US. We need to address that.

    As for Northern Ireland, 3.8% of our exports went there in 1995 while in 2003 it was down to 2.8%.
    No peace dividend there for us.

    However, I believe the Irish Republic now makes up over a quarter of Northern Ireland’s exports.

  • Fraggle

    There’s worse city centres to morph into but that’s not the point. H&M and Ikea will make Dublin more like Glasgow but they’re not British. Ireland’s high streets are converging with Europe (including Britain).

  • James

    “Peace in Northern Ireland has helped to boost the economy of the whole island.”

    Agreed.

    “Peace process key to southern success?”

    That oversteps it a bit. The team of Sean Lemass and T.K. Whitaker was the key, even if Haughey did screw it up.