The Republic of Ireland was once the economic basket case of Western Europe. LikeSpain,PortugalandGreeceit has funds lavished on it by the European Union. In the early 1990s theRepublicofIrelandbegan a sustained economic boom that was to late until 2008.
The 1991 hit film ‘’The Commitments’’ shows Dublin just before the boom. One wag in the film collects his dole money and wisecracks about his lack of a job, ‘What can you do,Ireland’s a Third World country?’ It was a joke even then but this would not have worked even as a joke ten years later. Infrastructure such as roads, airports, port facilities, sports centres and hotels improved immeasurably.
By 2004 it was reported that 20% of the houses had been built in the last 10 years. Therein lay the problem. People became hooked on the notion that the price of property could only go one way. There was a massive oversupply of property. A debt double was built on construction and speculating on residential property. The bubble was to burst with spectacular results.
It all came crashing down in late 2008. The Fianna Fail Party had been in government since 1997. They had been the largest party since 1932 although they had not been in office all this time. However, in the March 2011 parliamentary election they were beaten into third place and secured only 16% of the vote. In the November 2011 presidential election they were still licking their wounds. They did not even dare field a candidate for the presidency.
For those with capital the Republic of Ireland is still an excellent place to invest. The Republic of Ireland is of course English-speaking and is a member of the European Union. The currency is the Euro and unlike in Greece there is no talk of leaving the Eurozone. There is a young workforce hungry for work and more willing to accept lower salaries in the past. It is also one of the best educated workforces in the world. 55% of young people go to university. This is the highest university rate in the EU and one of the highest in the world. Admittedly, the quality of Irish universities varies from outstanding to mediocre.
There have been a few positive effects of the crash from a business point of view. All bank deposits no matter how large are guaranteed by the Irish Government should the bank fail. Property prices have tumbled. Rents are cheap for workers. Those who wish to buy or rent warehouses, office blocks and workshops will find that the prices are affordable.
The Republic of Ireland has excellent links with other countries such as theUnited StatesandAustralia. Because of centuries of Irish emigration there are large Irish descended communities in the US,Canada,South AfricaandAustraliaas well of course as in the United Kingdom. Those who have so much as one Irish-born grandparent can get Irish citizenship automatically. Some of the people working in Ireland are Americans with Irish citizenship through a grandparent. There is a strong tourist sector with Americans being the largest tourist nationality.
The low corporate tax attracted many companies to locate there. There is a thriving IT sector. Financial services companies have also located to Dublin. There is also some oil off the Atlantic coast but so far this has been found to be not worth exploiting.
Transport connections are good. There are dozens of flights each day to the US and Canadaas well as every country in western Europe. Ryan Air is an Irish airline that led the way in the low cost movement.
The new Irish president inaugurated in November is a 70 year old academic and poet Michael D Higgins. Mr Higgins is a former member of the Labour Party and is known for his firebrand left wing views and his excoriating criticism of US foreign policy.
However, bad the Irish economic situation is – it is not that bad. 14% unemployment may seem high but until the 1990s it was higher than this for years on end. People in Ireland got used to having it so good for 15 years. Now at least people in the Irish Republic have the right to live and work in any of the other 26 EU member states. The economy is not chronically unstable like Greece or Italy. There is no question of slipping back into recession. Economic growth in 2011 is estimated at 2.8% – healthier than almost every country in Europe.
The one thing that is for sure is that the country is coming back. The value of property will appreciate.
The Irish Ambassador to Turkey, Tom Russell has recently visited Baku and was very encouraging in that he believes Ireland ‘has turned a corner’, ‘Ireland is very much open for business. It is a great place to invest with only 12.5% corporation tax. We have an educated population who are eager to work’.
