What is the path to the upturn that will ultimately come?

Trotter

What are people's opinions on what will actually happen between now and the upturn in our country's fortunes, and on what timescale?

I feel that next year will be very hard for the economy. Deflation may mean a return to prices for certain items and services that we could have only dreamed of last year.

I think the rising tide of the global economy will lift all boats, sometime in 2011. I expect the glimmer of light to reach the Irish tunnel in 2012.

I fear that we will still have no faith in politicians and government and it will be 10-15 years before we have a government that anyone actually wants.

Will we learn from mistakes made in the past years?.. the squandering of wealth by a section of the wealthy and the dishonesty of too many of those banker types who over-influence Irish society's direction.

Maybe I'm way off.. I'm curious what others think about what it will take for us to turn the corner, and how far away that turn is.

Frank007

You seem very pessimistic (like most people) the world economy is still growing but at a much reduced rate than previous years. I Think there is still a while to go before things start to bottom-out. My educated guess is that the end of this year will see some signs of a recovery in the US and that should hopefully filter through to ourselves, but it will probably be mid 2010 when we begin to recover.

Thanks just my opinion

NewDubliner

The most important thing is for us to keep our collective nerve.

Not easy if you've lost your job & your partner is facing pay cuts while services stubbornly remain at pre-recession prices. Not easy if a family member depends on health services and Harney is adopting her 'to hell or the private sector' attitude.

We'll have to bide our time & pick our battlefield before dispatching FF & its friends to the oblivion they deserve.

Mr.Micro

I think it all depends on how the massive toxic debt that has built up globally particularly in the US, UK and Ireland is handled. There is talk of a bad bank in each of the above countries to dump this debt, which will mean that the sick banks become solvent again??? The banks to perhaps to carry on as before coming up with more schemes or should I say scams under the umbrella of financial products. Keeping interest rates low may cause the same problems again. As far as Ireland is concerned most of our boom was construction and housing, so even if a recovery takes place elsewhere what will we be depending upon? The same again? Unlikely, but maybe modest exports and tourism hampered by high unemployment.

DublinWriter

Massive inward investment.

Two reasons this won't happen:

1. High overheads of doing business in Ireland
2. General global economic downturn leading to a contraction in multinational organisational expansion.

It's time for us to up our game and get our indigenous SME's to the next level instead of depending on some multinational to set up a sweat-shop cum ribbon-cutting photo-op for some local TD.

Mr.Micro

DublinWriter wrote: »

Massive inward investment.

Two reasons this won't happen:

1. High overheads of doing business in Ireland
2. General global economic downturn leading to a contraction in multinational organisational expansion.

It's time for us to up our game and get our indigenous SME's to the next level instead of depending on some multinational to set up a sweat-shop cum ribbon-cutting photo-op for some local TD.

Since the Government here and abroad have intervened into the very heart of the free market by bailing out the banks why not go a step further and deal with the huge cost base here from retail prices to the cost of running a business? We have priced ourselves out of touch. Surely something can be done instead of Mary Coughlin making noises but will probably do nothing.

gurramok

Agreed.
Remember, the global economy was on a boom in the 80's while Ireland sunk. Point being there is no guarantee a global upturn will lift us, its hugely dependent on govt economic policy.(hint- get away from construction fuelled credit frenzy)

peasant

As with all doom and gloom, there also are quite big opportunities.

Instead of trying to hang on to the coat tails of the big bad world out there, little old Ireland could try and do its own thing.

Ireland is big enough to support itself reasonably well, yet small enough to not be perceived as a threat to anyone. Cut the dependence from big global companies as much as possible (they'll see to that themselves) and move towards Ireland Inc. instead.

But not just by hoping that throwing a few Euro at local SME's will yield something in the end but by actively steering industry and development in certain directions.

Here are a few whacky ideas:

This is a windy, watery island lapped by waves ...let's use that for power generation. But not just generate the power, develop and improve the technology and invent some new stuff while we're at it. Surely some remote beach or bay somewhere could become the European/worldwide wave-power research park? Enough bare, boggy, windy mountaintops to do the same for wind.

Ireland has no motor industry ...hence no oil/motor lobby to block alternative developments. There are people out there working on cars powered by compressed air, powered by water or other sources running into walls put up by the big players all the time. Bring them here. Make this Island the development centre for the green cars of the future.

People with more vision than myself surely could come up with a few more ideas.

People with more leadership than the current shower at the helm could make it happen.

Trotter

I just feel that there's a core dishonesty at the highest level. I don't believe what Im being told by the taoiseach and ministers via the media. I have no problem whatsoever with paying more towards the cost of getting us out of trouble, IF there is honesty and transparency at the top. I think that public service unions were ready to accept the current pension levy once that measures were put in place to make the contributions fair across the board, i.e. the top earners paying up too.

The governments refusal to accept this, the retention of junior ministers when many of them were willing to give up the position, the huge payoffs to bankers etc, leads me to believe that there is a level in society that is exempt from the "pain" that "we all" must feel. There's a nudge and a wink mentality that says.. sure look, you've a load of people on 15k-70k, hit them and we'll play golf and discuss that donation cheque.

Where am I going on this.. I don't feel that we have the senior decision making civil servants in the departments, nor the kind of person in the cabinet who is mentally or emotionally capable of dealing with this crisis. I do believe the world economy will rise in 2010, and the conditions will be there for Ireland to make the turn.

I don't believe we have the people at the top end who have the ethics or the moral fibre to lead, and act as we as a society require.

Charlie Haughey told us to tighten our belts when he was spending a fortune on shirts. His colleague's son, our minister for Finance told me to do the same yesterday. He then announced none of the junior ministers would be demoted to a mere 100k+ TD salary when they clearly were willing to do this.

Ireland will not turn the corner to genuine prosperity until there is solid, competent, strategists at the helm. Maybe I'm naive and theres no country in the world with trustworthy leaders.

Zynks

peasant wrote: »

Here are a few whacky ideas:

This is a windy, watery island lapped by waves ...let's use that for power generation. But not just generate the power, develop and improve the technology and invent some new stuff while we're at it. Surely some remote beach or bay somewhere could become the European/worldwide wave-power research park? Enough bare, boggy, windy mountaintops to do the same for wind.

Ireland has no motor industry ...hence no oil/motor lobby to block alternative developments. There are people out there working on cars powered by compressed air, powered by water or other sources running into walls put up by the big players all the time. Bring them here. Make this Island the development centre for the green cars of the future.

That's what we need, progressive ideas!

Peasant, if you don't mind I will quote these in another thread. I want to make a collage of fresh and constructive views.

peasant

work away

silverharp

ok if we talking whacky, scrap the current income/CT tax system and replace it with a 10% Income/Corporation tax where the tax rules are all contained on an A4 page. I guarantee you wealthy people & companies will Q up to move here. As posters have said we are a small country that wont get up too many noses so we should take advantage of this.

turgon

silverharp wrote: »

ok if we talking whacky, scrap the current income/CT tax system and replace it with a 10% Income/Corporation tax where the tax rules are all contained on an A4 page.

There then remains the more than slight problem of, um, funding the government????

silverharp

turgon wrote: »

There then remains the more than slight problem of, um, funding the government????

I dont see a problem, so you cut the gov budget in half, you wont need the IDA , FAS , Bord Failte and the dozens of other "hole digging" arms of gov. we have. The only question I have is do you want to be busy and a little less regulated or be unemployment but happy in the knowledge that the gov. will pretend to look after you?

SkepticOne

When it picks up (and it will) the cause will not be very obvious. It will be small business starting up, using highly available and flexible labour and low costs to export goods and services abroad. None of this will get reported in the media.

Daithinski

SkepticOne wrote: »

... using highly available and flexible labour and low costs to export goods and services abroad. None of this will get reported in the media.

The thing is that the majority of the current batch of Irish business people being the cute hoors that they are, if they think of a product to manufacture and export they will do what the multinationals are doing ie go to somewhere like poland to get it done where the minimum wage is one fifth what it is here.

More money for them. Why would an individual business man care about creating jobs for other Irish citizens? I haven't seen much caring and sharing from these people so far. They are only interested in lining their own pockets.

I heard of someone that decided to make hurleys and promptly set up a factory in some eastern european country and bought a couple of acres of eastern european ash plantation.:mad:

There is a company in India that makes hurls, sliotars and even produce rule books on Gaelic and hurling. Maybe the eastern european factory has since closed down because it couldn't compete with Indian prices?

In 2010 and beyond we will still have the same problem that we do now ie that the cost of doing business here is far higher than other countries, and business people being business people who are only in it for the money will choose those locations over and over again.

Unless the government can make the cost of doing business here substantially cheaper, I think we will continue to see the slow death of Irish manufacturing.

Ireland needs a niche industry that can't be manufactured abroad.

I don't know what that could be. The only thing that springs to mind is to look and see if we could develop the english language schools.

Government funding of some sort could yield dividends if spent on something like this. TEFL courses don't take long to complete and you could retrain a lot of people quite quickly to do this job.

That's my tuppence worth.:p

SkepticOne

Daithinski wrote: »

Ireland needs a niche industry that can't be manufactured abroad.

I don't know what that could be. The only thing that springs to mind is to look and see if we could develop the english language schools.

Government funding of some sort could yield dividends if spent on something like this. TEFL courses don't take long to complete and you could retrain a lot of people quite quickly to do this job.

That's my tuppence worth.:p

I don't think anyone knows what the niche industry will be. It could be several niche industries. What the government needs to do at this stage is make sure the process for establishing these is streamlined and as much red tape is removed as possible and that as many barriers between Irish businesses and their potential customers abroad are removed. The actual ideas themselves will come from individuals hoping to become rich.

What we have now is the internet and people are much wider traveled. Access to information is no longer a problem.

On the other hand, if these industries are not created then Ireland becomes a low wage economy and competes on that basis making low value goods. It is not that it is desirable to be a low wage economy it is simply that you can only have high wages if the money is coming in.

Zynks

There is a point regarding our high costs and to a large extent low taxes will not be enough.

I suspect our future is totally related to innovation, high-end/high-value services, foreign trade (as a hub logistically and commercially between Europe and Americas), and exploring somehow the potential low cost countries have to offer to increase the value of what we can do here.

We need to be very creative and explore the resources we have, such as

- EU membership (we can sell our products and services without attracting import duties, we can import lower end components to be assembled or modified with no import taxes).
- Instead of fearing our jobs goin to low cost countries, we should find ways of employing them as a way to reduce our final costs (it is a win-win in my view, they get jobs, we survive)
- As part of the EU we can bring in components tax free, do the high value bits here and distribute to the EU.
- We should look at exploring our natural/sustainable capabilities as Peasant proposes.
- We should explore better the Internet and other communications tools that make it almost irrelevant where you are today - thus reducing our handicap as an island in the Atlantic
- We should think globally

I am doing my best to educate my kids to be good entrepreneurs, not good employees. This can be hard when we have an educational system very much driven towards the job market.

The main areas we should specialize in IMO are:
- Product design & innovation
- Business engineering
- Foreign trade
- Marketing
- Outsourcing

Things we should invest in:
- Infrastructure to enable a shipping logistics hub (Rotterdam or Le Havre style)
- Proper Business education
- Establish a hands on market/business development network across Europe for hard selling and maintaining networks
- Bring in top R&D minds and invest on our own
- Support even more universities in their R&D initiatives and ensure business potential is realized where possible
- Invest more in language and cultural training
-We should make all possible efforts to ensure Irish enterprises with foreign trade potential grow, so we are not over-dependent on multinationals as we are today.

There are many more things we can do, of course. If we just raised out heads a bit and put our efforts into ambitious planning rather than moaning around the place we would have a chance of becoming a serious player in the European economy.

SkepticOne

What I would be worried about with large scale government initiatives (and I am not against them in principle) is that people start to feel that the government will ultimately solve the country's economic problems. At best the government can identify broad areas where they feel the growth will come from and then facilitate activity in that direction.

If they get it wrong, however, they will have hindered economic recovery. The problem with the government getting involved is that there is very little personal stake on the part of the officials organising it. Failure means embarassment and lack of career progression. Success means they continue on their career path, nothing more.

The government should be a general facilitator but should not try and and second guess the market. There are actually a lot of people right now in Ireland quietly working away on business ideas. Provided there is a pick up in world economic activity there is no reason why they will not succeed. It will be he accumulation of these people, maybe thousands of them, that will bring about the recovery. Most of them wont get media attention like, for example, a multinational locating here, but in my view, large amounts of small-scale entrepreneurship is far more beneficial to the country and not just in economic terms.

Therefore, I think the government needs to be clear that government can only ever be part of the solution, the rest has to come from the people. For this we need inspirational leadership, not the kind of political fixers that pander to all the sectional interests that we have so far had to put up with and which has led to the current disaster.

PJW

OK, I think everyone agrees that the current high labour costs are essentially restricting the growth of new jobs in this country. Unfortunately high wage demands are necessary for the average industrial worker to repay their one essential inflated outgoing “the Mortgage or the Rent”, (also along with high energy costs) there is just little room to bend in terms of wage reduction for most peoples personal level.

Humour me here for a bit please.
So what to do in this regard? Well what did the Gov do in this regard? They pumped and guaranteed 4.5 billion of state coffers (future taxes) into the banks to support the debt they found themselves in because of leaning money for the average Joe Soap to afford an inflated property. (Ok I know that was a very broad outline but you get my drift) So what did they get in return? A bank full of debt and % stakes in a couple of other banks but I cannot see any positive gain from this speaking from a layman’s level.

Why did the Gov not just buy up the loans, physically buy them out, and take my mortgage, the guy next doors mortgage, the couple down the road’s mortgage and the other say 600,000 mortgages at average €200,000 = 1.2 billion with money left out of the 4.5bn for renters. Put in place T&Cs, capped at 200k, ability to pay, no remortgages say for 5 years allowed, car loans?? etc. blab bla bla, this is the main concern for the majority of people in Ireland right now.

So the main result will be freeing up personal depth enabling wages to reduce, this will allow Ireland become competitive again, kick start home grown companies, bring back MNs, to our skilled work force and lets hope we learn some lessons from the recent past, independence financial regulator, lol

El Stuntman

PJW wrote: »

Why did the Gov not just buy up the loans, physically buy them out, and take my mortgage, the guy next doors mortgage, the couple down the road’s mortgage and the other say 600,000 mortgages at average €200,000 = 1.2 billion with money left out of the 4.5bn for renters. Put in place T&Cs, capped at 200k, ability to pay, no remortgages say for 5 years allowed, car loans?? etc. blab bla bla, this is the main concern for the majority of people in Ireland right now.

are you Brian Lenihan? you seem to have his grasp of maths

600,000 * €200,000 = 120 billion

total outstanding private sector debt is 400 billion plus

Frank007

legalising certain drugs could provide massive income on excise duties for the gov, and solve a few problems (but create newer ones). Lead the world in stem cell research and make Ireland the hub of new scientific advances.

And simple things like providing school buses for every school which would (in theory) remove thousands of cars from the congested roads everyday, reducing emmisions and travel time and thus overall productivity.

oscarBravo

Daithinski wrote: »

Ireland needs a niche industry that can't be manufactured abroad.

Niches have two disadvantages: they're small, and they're hard to find. Sustainable growth means expanding out of your niche, at which point you either need to find another one, or expand your base.

Mr.Micro

Several small countries and islands survive in the world as they became tax havens and generated money from that status. Places like Monaco relies on being a tax haven and gambling for its income. Both unsavoury but we could use the money.:D

PJW

El Stuntman wrote: »

are you Brian Lenihan? you seem to have his grasp of maths

600,000 * €200,000 = 120 billion

total outstanding private sector debt is 400 billion plus

LOL, we did have the same maths teacher, not really, but my point remains that personal debt is the crux of the issue regarding high wages / competetiveness.

Also there was a post here sometime back about our natural resources off our coasts estimated at 500bn or something, if true this is definite money that should be persued.

Daroxtar

Well if my friend maya is right then this recession and global depression will only last until about christmas 2012. I'd say the way forward would be to invest in flint, tinned food, water filtration systems and animal furs. also developing a keen sense of night vision and a taste for carrion would be of major benefit and who knows, by 2015 when the dust has settled (literally) we should see the light at the end of the tunnel (that we dug).:D

Trotter

Why not make the banks give an option to extend existing mortgages to 50 years so that in the short term people have more disposable income, banks make more in interest, people spending means improved cash flow for business, more tax revenue, and combined with price controlling, there'd be a general improvement. When things improve, give people the option to revert to their original mortgage term.

gurramok

Humour forum that way!

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Lets see. A 30 yr old will keep paying a mortgage when they are 80 in the nursing home

babaloushka

gurramok wrote: »

Humour forum that way!

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Lets see. A 30 yr old will keep paying a mortgage when they are 80 in the nursing home

Hopefully, we'll have emerged from the recession before then. If not, maybe the housing market will have picked up and the house can be sold .. probably needed to pay the nursing home fees in the first place

Trotter

gurramok wrote: »

Humour forum that way!

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>>>>>

Lets see. A 30 yr old will keep paying a mortgage when they are 80 in the nursing home

Its standard enough in Scandinavia and Switzerland.

gurramok

Trotter wrote: »

Its standard enough in Scandinavia and Switzerland.

Can you post links to that if true?

Would love to know how they do it. A simple google shows home ownership in Switzerland at 31%, now we know why
http://www.realtor.org/intlprof.nsf/All/Switzerland?OpenDocument

Trotter

I'll have a look on the net. It was a friend who's in the business who told me.

Zynks

Trotter wrote: »

I'll have a look on the net. It was a friend who's in the business who told me.

I am not sure about the duration of mortgages in Sweden, but I do know that the vast majority have interest only deals. The main reason is that Sweden has a wealth tax and it is more tax efficient to not have much net equity.

Having said that, if we all switched to interest only, this would solve a huge part of our problems in the short to medium term because it would be less likely that people would default and there would be some spare cash to help keep the economy moving.

If you are looking for examples for long mortgages Japan will certainly be the one. 100 year mortgages are supposed to be common there. People inherit the property with a mortgage attached - and why not, I guess.

feicim

I came across this thread from 2 years ago there were several questions raised by the OP and it seems none of them have come any closer to being answered.

What has our government been doing to create jobs?

Why are they still in power?

What positive steps have they taken in the last two years to improve the life of the average irish citizen?

We all know things have gotten worse and are still getting worse, but that shouldn't mean that the government just gets to sit back and watch the destruction, they should have come up with something by now??

Years have passed when they FF/Green party should have addressed some of these issues but nothing has been done. So annoying! :mad: