Monday, November 9, 2009

From boom to bust

Just three years ago Ireland was the place that every developing country wanted to emulate. It had transformed itself from a poor, peripheral country on the edge of Europe (in 1987 its GDP was 67% of the EU average) to one of the richest nations on the planet (with a GDP 139% of the EU average in 2004). For over a decade GDP growth per year was over double that of nearly every other European country. Employment rose from 1.16m people in 1991 to 1.99m people in 2005, and unemployment dropped from 15% in 1993 to run at about 4% between 2000-2005. Standands of living and quality of life rose rapidly, as did propert prices, and the population grew by 17% between 1996 and 2006 (from 3.62m to 4.23m). In turn there was a cultural transformation away from social conversativism to liberalism and consumerism. Ireland seemed to be a conundrum with low personal and corporate taxes, high indirect taxes, yet with a public health system and free education at all levels - to use Mary Harney's phrase it resided 'somewhere between Boston and Berlin', blending European social welfarism with American neoliberalism. And then the global financial crisis occured and Ireland's boom rapidly heads for bust with plummeting house prices, rapidly rising unemployment, personal tax hikes, and salary cuts across the private and public sector.

In 2006 I co-edited 'Understanding Contemporary Ireland' with Brendan Bartley. The book consisted of 22 chapters examining all aspects of society and economy, written by a collection of leading social scientists, all of whom challenged the myth that the Celtic Tiger had done nothing but good and were sceptical as to government policy and the sustainability of the economy. I don't think any of those writing anticipated the wheels coming off Ireland Inc. quite so spectacularly though. We were probably all hoping for a soft landing even if we feared the worst. What we're experiencing is anything but soft, although it's still a long way from Iceland's demise (and certainly the joke that Ireland was Iceland but for one letter and six months has not come to pass). I thought it was about time I got beyond the newspaper reports and started to read some of the analysis that seeks to explain what went wrong. To that end I went and bought a number of books over the weekend (from The Reading Room) which I'll be reviewing over the coming weeks as I get myself back up to speed with the state of contemporary Ireland.

I'm also co-organising a one day workshop on Nov 23rd entitled 'Geography after NAMA' (the government's plan to buy the bad property debts off the banks) and it'll be interesting to see what other social scientists make of what is occuring.

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