Ireland’s special relationship falling into disuse..?

A couple of years ago, I floated a few ideas about what Ireland might do with the considerable social capital it had built up through the years of our ubiquitous Peace Process™. Whatever the practicality of the Green focus of the argument there, the idea was, at base, about getting one of the smartest arms of government (the department of Foreign Affairs) to think smartly about how it might engage the interests of larger world players in an increasingly multilateral world. Yet it sounds like the latest thinking to to emerge from the Irish Embassy in Washington has not impressed Niall Stanage over at CIF

…the dissolution of Irish immigrants and their descendants into the American melting pot has meant that that old-style ethnic Irish politicians teeter on the brink of extinction, and those who propagate the myth of a crucial Irish-American vote – as a cadre of Hillary-supporting New York Irish activists did during last year’s primary – are exposed the moment reality strikes.

Irish America has not only been weakened by assimilation. As recently as the 1980s, it could look to new arrivals from the homeland as a source of rejuvenation. But the old patterns of immigration were reversed during Ireland’s boom years. Between 2001 and 2007, according to Ireland’s central statistics office, more people moved from the US to Ireland than vice-versa. The Celtic Tiger may have expired, but the equally parlous state of the US economy suggests that no new tidal wave of Irish immigrants is likely.

Official Ireland has slowly come to acknowledge that the relationship is changing. But it doesn’t seem to have any real idea what to do about it. Cowen last year asked the Irish Embassy in Washington to carry out a strategic review of the relationship between the two countries. Launched with much fanfare on Sunday night, the report (apparently still unavailable online) reads like a caricature of lazy diplomatic thinking. Full of noble-sounding but gaseous sentiments, its main concrete recommendations were that the diplomats themselves should get a nice new embassy and an increase in personnel.

It would be churlish to deny that the US and Ireland have a special historic relationship, rooted in the mass emigrations of the mid-19th century. But that relationship is of negligible and ever-declining contemporary relevance. All the shamrock in the world will not change that hard reality.

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  • NCM

    You could send us money. Please?

  • Pete Baker

    Mick

    Niall has articulated the reality, rather than the myth, of the Irish-American vote before.

    And he’s not wrong.

    The most recent announcement, rather than being evidence of the strength of the Irish-American vote, represents its weakness.

    Public Equity Programmes demand a return. Otherwise pensions suffer.

    As I recall, some reports compared the announced amount to the spend of Invest NI – was it a quarter, or a sixth, of their budgeted investment in bringing international companies to NI?

  • Seymour Major

    It sounds a bit vacuous, doesn’t it?

    I would like to see Ireland invest more aggressively in the development of the British Isles Council. With the GFA still only 10 years old, that particular body is still very immmature. What I believe the Irish will find is that the more it can influence Britain, the more likely it is to punch above its weight in achieving its foreign policy objectives.

    You suggested green issues as an area where the Irish could exert influence. How ironic it is that David Cameron could yet turn out to be one of the most green-inspired political leaders the world has ever seen.

  • Shane

    “You could send us money. Please? ”

    That is the UK you are thinking of.

  • New Yorker

    Most US politicans use Irish identity to get themselves elected not out of any real interest in Ireland. There has not been an Irish bloc of voters on Irish issues since probably the 1920s.

    I suspect Ireland and things Irish will decline in Americian consciousness. The Celtic Tiger is past, Americans wished NI well but never believed fully the peace hype, U2 are well past prime. Unless something really extraordinary occurs or emerges from Ireland, I’d say it will be once again a small European country in US consciousness, a place where the great-great grandfather came from but having little else of interest.

  • KieranJ

    This entire thread reaches absurdity when one considers the fact that Irish America is responsible for the “Celtic Tiger”.

  • Dave

    Sentimentality or a “special relationship” has nothing to do with why US firms invest in Ireland or why Irish firms invest in the US. According to the American Chamber of Commerce in Ireland, Ireland offered US companies a rate of return of 20.1% on their investment, with the nearest competitor being the Netherlands at 14.6% and the UK offering just 7.6%.

    They list Ireland´s claim to be a knowledge economy as the most important factor with the “three key three pillars” being:

    [i]1) A Quality Education System that ensures that citizens are equipped to acquire, use, and share knowledge. The IMD World Competitiveness Yearbook 2004 ranks Ireland´s education system 5th from 60 countries surveyed for meeting the needs of a competitive economy. They also rank Ireland 2nd, behind Canada, for having the highest percentage of 25 – 34 year olds to have attained at least tertiary education.

    2) Innovation Systems that bring together researchers and businesses in commercial applications of science and technology. Science Foundation Ireland (SFI) invests in academic researchers and research teams who are most likely to generate new knowledge and leading edge technologies and also advances co-operative efforts among education, government, and industry. In the Time Magazine cover story of 11th January 2004 on the brain drain of top European scientific researchers from the EU to North America, Ireland was singled out as an exception to the rule. The article detailed how, thanks to the work of SFI, Ireland is attracting the best and the brightest. IDA Ireland also encourages Research & Development by existing overseas companies in Ireland in the form of support and incentives.

    3) An Economic & Institutional Framework that ensures a stable macroeconomic environment, competition, flexible labour markets and adequate social protection. The 2004 Index of Economic Freedom, compiled by the Wall Street Journal and The Heritage Foundation, categorised Ireland as a ´Free´ economy, and ranked Ireland 5th out of 155 countries worldwide. It also states that ´Ireland has one of the world´s most pro-business environments, especially for foreign businesses and foreign investment´ and that ´Ireland´s policy framework promotes an open and competitive business environment´.[/i]

    Unfortunately, many of the factors that attracted those companies are no longer applicable, such as the most competitive low tax regime in the EU, competitive wage rates, a currency that could be used to drive exports, and a pro-business environment, etc. The boom in exports that drove the actual Celtic Tiger in the 90s stagnated when Ireland joined the Eurozone, and Ireland will end a decade of Eurozone membership with substantially less exports than when it began it. Likewise, Eurozone membership has led to rapid price inflation and to rapid wage inflation with wages being more than double their level prior to joining the Eurozone. In addition, the EU’s fetish for regulation has imposed an annual cost burden of billions on Irish companies. The EU has also expanded to include East Bloc countries that now have lower tax regimes than Ireland with Estonia, for example, having zero corporation tax compared to Ireland’s 12.5% rate.

    The spin-off in indigenous entrepreneurial activity that should have materialised from the location of those US companies in Ireland during the 90s was diverted into an enterprise economy that was based on property speculation thanks to the ECB setting interest rates at insanely low levels and the Irish Central Bank having no means to stop the overheating in the Irish economy by raising the interest rate. So, we have no indigenous enterprise economy despite building the basis for one during the actual pre-Eurozone Celtic Tiger. Instead, we have lumbered all our entrepreneurs with massive property debts that ensure that they are out of the investment game here just as surely as the FDI investors are.

  • Dave

    [b]Continued[/b]

    FDI should never be favoured over indigenous enterprise. That, apart from being short-sighted, is parasitical on the entrepreneurs of other countries – not to mention, of course, that the touted advantage of creating jobs for Irish people doesn’t apply because most of them import cheaper labour under EU regulations so the Irish people simply end up paying more taxes finance the state grants that create jobs for foreigners.

    Incidentally, Ireland attracted just $2.1 billion (US dollars) in FDI in 2007, and it has negative FDI for 2008, with Irish firms investing more abroad than foreign firms invested here. On the other hand, the UK attracted FDI worth £91.7 billion (Sterling) in 2007. While the figure for 2008 is almost half that level, it still holds no comparison to the total collapse in foreign investment that has occurred in Ireland. Therefore, Northern Ireland would be deranged to try to hitch its begging bowl to Ireland when they should be waving it in the direction of Great Britain.

    While US companies employ 100,000 ‘Irish’ people here, Irish companies directly employ 74,000 Americans over there, so it cuts both ways.

  • Mack

    Pete – I disagree with your point re strength / weakness of the relationship being demonstrated by the type of investment. You need sustainable businesses to invest in NI, or there’s no long term benefit. Either that or you need investers to invest in sustainable local businesses. That is, they should expect a return.

    I know this is novel concept for soviet-style subvention NI, but it looks like they’re attracting the right kind of investment.

    US investment in Ireland

    I’ve no doubt they’re garnering a profitable return here, but don’t dismiss the cultural aspect too. I’ve worked in US multinationals, and stood in the office of American senior executives in the USA and been suprised to find them bedecked in Shamrocks and other Irish symbols.

    On a personal level with US team mates, I know they find it easier to converse with us than with many of the other nationalities we deal with.

  • Pete Baker

    Mack

    “That is, they should expect a return.”

    Sorry, my comment wasn’t clear enough.

    I wasn’t suggesting that they shouldn’t expect a return.

    And I don’t disagree with you on the value of investment, from any quarter, in local businesses, but these repeated announcements of promised investments by US pension funds is weak.

    I couldn’t find the relevant Invest NI figures but they’d be worth hunting down.

  • Moonchkin

    “I would like to see Ireland invest more aggressively in the development of the British Isles Council. With the GFA still only 10 years old, that particular body is still very immmature. What I believe the Irish will find is that the more it can influence Britain, the more likely it is to punch above its weight in achieving its foreign policy objectives.”

    That’s very true – indeed if we go a step further and come to some kind of East/West all-Islands federal arrangement we’d be entitled to 60 or so seats in the House of Commons, plus a share in a UN Security Council seat.

    Now that would be punching above our weight! Time to start thinking outside the box!

  • Pink Earth

    “…British Isles Council…”

    Could Seymour or Moochkin be good enough to provide a link to this mythical “British Isles” Council. I rather suspect they are both talking out of their British posteriors.

  • I can’t believe you can call a relationship that has yielded 140,000 jobs in the Southern economy and at least half our exports “negligible”? The fact that Obama is backsliding by telling Cowen that Ireland is not viewed as a “taxhaven” by the US admin is also a great victory for the continuing influence of Ireland in the American political-scene. You say that the Irish-American vote is assimilating. There may be some truth about that, but it hasn’t fed into the US political-elite yet. The only larger Diaspora in the US are the Germans, who for obvious reasons are not keen on trumpeting this fact (esp. with huge Jewish population over there). Even during the Bush admin, Ireland was the only country to get this kind of special treatment at the White House whereby we have one day reserved for us per annum. Recall too how Rosemary Nelson was received by the Senate Foreign Relations committee to expose human rights abuses and threats to her life from elements of Loyalism and the RUC. The special-relationship is still there. It’s just that it’s different from that of other countries like Israel and the UK. Different in the sense that there is no military component to it. Rather, it is an economic and to some extent and emotional relationship. At least we don’t have to sacrifice our men and women in some foreign war to maintain it. The British people might wish it was so for them too.