| For most of the past 300 years or so Ireland has | | | | creating jobs - which in turn increased income per |
| had the dubious distinction of being a country more | | | | capita and with it, consumer spending. By investing in |
| known for the hardships suffered by its inhabitants | | | | the long-term Ireland was perfectly poised to take |
| than for its beautiful countryside. While people in | | | | full advantage of favorable economic conditions when |
| other parts of the United Kingdom and in Europe | | | | they occurred years later. |
| enjoyed a relatively high standard of living Ireland | | | | Energy Independence |
| lagged far behind. Up until the early 1970's the | | | | Some of the public works projects that Ireland |
| average income in Ireland was approximately one half | | | | committed to prior to the expansion included |
| of that of the rest of the UK. Over the next 35 | | | | investing in her capacity to generate energy. Ireland |
| years that status would change dramatically. | | | | invested in hydroelectric plants. The island's numerous |
| Today Ireland is rated one of the best countries in | | | | peat bogs were utilized to create a fuel for heating |
| the world in which to live. Ireland boasts the fourth | | | | from dried peat products, and local off-shore gas |
| highest gross domestic product per person and very | | | | fields were tapped. Prior to and during Celtic Tiger |
| low unemployment. University tuition is free and there | | | | Ireland could operate without the financial burden of |
| are a high percentage of skilled positions available. | | | | dependence on foreign oil. It is worth noting that as |
| How did Ireland accomplish such a dramatic | | | | Ireland's demand for energy began to surpass the |
| turnaround? | | | | capacity of her local energy sources her economic |
| New Economic Policies | | | | growth slowed in concert with her increasing |
| Economists who have analyzed the emergence of | | | | dependence on foreign oil. Apparently these lessons |
| the "Celtic Tiger" (a popular nickname for this period | | | | on energy production were not wasted on the Irish. |
| of unprecedented economic growth) have identified | | | | Today, Ireland is creating new capacity by developing |
| economic policies that encouraged growth. Beginning | | | | wind based power generation facilities. |
| in the 50's and 60"s Ireland began to shift away from | | | | Political and Social Reforms |
| protectionism and started to plan long-term for | | | | Prior to this renaissance Ireland had suffered from |
| expansion and to increase international trade. | | | | rampant corruption in high political offices. Society |
| Corporate tax rates were lowered and tax incentives | | | | was divided politically and in the conflict between |
| were offered to foreign investors. Initiatives to | | | | Catholics and Protestants there seemed to be no |
| expand exports were adopted. | | | | end in sight. Civil liberties were restrictive compared |
| In the 70's the currency was strengthened and | | | | to other modern countries. These factors coupled |
| stabilized with Ireland's entry into the EU. EU | | | | with high unemployment and low wages caused |
| membership also provided Ireland access to | | | | Ireland to suffer from a kind of social and economic |
| substantial subsidies from France and Germany which | | | | pessimism. |
| was invested into public works projects to improve | | | | By the 80's Ireland had cleared up much of its political |
| and expand infrastructure and education. Ireland now | | | | corruption and began to develop a more cooperative |
| had greatly expanded access to European markets | | | | political climate. Government, employers and trade |
| and began to increase exports. As its economy | | | | unions forged landmark compromises to work |
| began to respond, Ireland focused on lowering its | | | | together to bring in trade and investment. Universal |
| public debt and eventually achieved a 35% debt ratio, | | | | education made it possible to maintain a highly |
| lower than most of other countries in the EU. As her | | | | educated workforce. More women pursued advanced |
| financial position improved Ireland initiated several | | | | education and entered the workforce. Birth rates per |
| new programs that were aimed specifically at | | | | capita dropped as more women pursued careers. |
| attracting high tech businesses and other growth | | | | This reduced the ratio of dependents to wage |
| industries. Ireland now offered an unbeatable | | | | earners and helped to lift the gross domestic product |
| combination of stability, favorable tax and trade | | | | per capita. |
| policies, and a well educated English speaking labor | | | | During the most robust phase of the expansion |
| force available at relatively low wages. This brought in | | | | Ireland benefited from the leadership of President |
| employers from all over the world to do business in | | | | Mary Robinson who garnered a 93% approval rating |
| Ireland. By the end of the 90's unemployment had | | | | during her term. President Robinson was a true |
| fallen from 18% to 4%. | | | | diplomat bringing together parties within Ireland and |
| Ireland is not the only country to follow this basic | | | | forming cooperative relationships with other nations. |
| formula for economic expansion (think of China, Brazil, | | | | Robinson was also instrumental in expanding civil |
| Russia, India, and Mexico). Yet Ireland seemed to | | | | liberties. Shortly after Robinson left office to become |
| reap much higher dividends than most of the other | | | | the United Nations High Commissioner on Human |
| counties adopting a similar approach. Looking at other | | | | Rights, the Belfast Agreement was signed bringing |
| changes in Irish society that occurred in concert with | | | | together political and religious foes to work to end |
| the changes in economic policy reveals that other | | | | the violence in Northern Ireland. All of these changes |
| factors may have played a critical role in the | | | | lifted the spirits of the Irish people and helped them |
| phenomenal success of the Celtic Tiger expansion. | | | | feel better about their future. |
| Long-Term Planning and Investment in Basic | | | | The Power of Optimism |
| Infrastructure | | | | One could characterize the Celtic Tiger expansion as |
| It is important to note that Ireland committed to a | | | | a journey from pessimism to optimism. An optimistic |
| long-term plan for growth nearly 20 years before the | | | | social climate is a powerful economic stimulus. When |
| Celtic Tiger expansion really took off. Ireland was | | | | consumers feel good about the future they spend |
| willing to commit to new economic policies and | | | | more money. When business leaders feel optimistic |
| maintain fiscal discipline for many years before | | | | they are much more likely to invest in research and |
| substantial results were forthcoming, although there | | | | innovation and expand their operations and increase |
| were clear signs of growth after the first five year | | | | their workforce. What made the Celtic Tiger |
| plan was implemented. Ireland also invested for the | | | | different is that the economic policies were |
| long-term by initiating many public works projects | | | | supported by a cooperative political and social climate, |
| designed to strengthen her infrastructure and | | | | a willingness to invest for the long-term and social |
| education system. This increased Ireland's production | | | | policies and leaders who fostered optimism. |
| capacity and the quality of its workforce while | | | | |