Friday, Mar 29, 2002
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By V.S. Sambandan
In a way, the story of Ireland's economic success can be the envy of several developing nations. From a protective economy in the 1930s, accentuated by a contracting domestic market, the road to its present integrated status in the European Union has been marked by timely Governmental interventions. Brian Callanan, a director in the Irish Business and Employers Confederation, tracing the contemporary changes made by the Irish economy, told visiting Indian journalists that the change started during the 1960s. Rural as well as urban poverty provided an unhealthy economic setting and triggered emigration. That was when the "path to progress'' commenced with an emphasis on long-term issues relating to economic growth. Even as the recalibration process was underway came the opportunity of joining the European market during the 1970s, which was to become a watershed in the nation's economic success story. Joining the EU meant that the Irish economy's domestic constraint of a limited market would no longer matter. The crucial decision that Mr. Callanan points out which set the economy on the road to prosperity was the selective "targeting of sections'', especially investing in education. During the earlier decades, the literacy mix was more towards secondary education, with about 35 per cent in secondary education and about 10 per cent in tertiary education. Today, the situation is vastly different, with secondary education up to 80 per cent and tertiary up to 60 per cent. There were no immediate expectations then over the benefits from education. "It really was the long haul stuff,'' he said. The 1980s saw a difference, in that economic circumstances led to a situation where "the IMF was knocking on our doors.'' That was in 1987. This situation led to the emergence of a tripartite agreement between employers, trade unions and the Government, marking the commencement of three-year agreements on salaries and tax structures and a Programme for National Recovery. Slowly the benefits of investments in education started showing and, with the added advantage of the European market, the Irish economy started performing well. The 1990s also saw a period of fast economic growth. However, this growth was not without its own set of problems. Pointing out that the present slowdown was in fact timely, Mr. Callanan said the economy was "expanding too fast, too rapidly.'' The insufficiency of infrastructure was starting to show and was "not able to take the growth.'' The overheating of the Irish economy would have taken quite a different turn but for the global slowdown. "In a way, it has provided us a soft landing'', he said, as it gave the necessary reaction time for the economy. The path from now would be dependent on several factors, an important one being the next three-year agreement between the employers, trade unions and the Government. There are areas that require correction as well, like the largely Dublin-centric economic growth. Charting out the methods that can sustain the Celtic tiger is bound to engage the Government's attention in the years ahead.
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