How did Ireland go from being so poor to being so rich?

mr_fegelien · 18-08-2020 5:33pm #1

My father growing up remembered that Ireland was once seen as a poor and troubled Western European nation with a lot of emigration. Now, it's one of the richest countries on earth with a GDP per capita better than the UK.

How did this happen? Was this always destined to happen?

Ray Donovan · 18-08-2020 5:34pm

All the Nigerian princes moving here. Obviously.

Timberrrrrrrr · 18-08-2020 5:35pm

mr_fegelien wrote: »

My father growing up remembered that Ireland was once seen as a poor and troubled Western European nation with a lot of emigration. Now, it's one of the richest countries on earth with a GDP per capita better than the UK.

How did this happen? Was this always destined to happen?

The EU poured a shìt tonne of money into infrastructure, this helped to connect the country and attracted foreign investment (Intel, Microsoft, IBM etc) thus creating jobs.

mr_fegelien · 18-08-2020 5:36pm

Timberrrrrrrr wrote: »

The EU poured a shìt tonne of money into infrastructure, this helped to connect the country and attracted foreign investment (Intel, Microsoft, IBM etc) thus creating jobs.

How much was Ireland's development in the 20th century influenced by the EU fund compared to the UK?

Why does the UK want to leave so badly?

sydthebeat · 18-08-2020 5:38pm

mr_fegelien wrote: »

How much was Ireland's development in the 20th century influenced by the EU fund compared to the UK?

Why does the UK want to leave so badly?

https://ec.europa.eu/ireland/about-us/impact-of-EU-membership-on-Ireland_en

Economy and Jobs

Ireland's membership of the European Union greatly facilitated our move from an antiquated, agriculture dependent economy to a one now largely driven by hi-tech industry and global exports.

The country was a net recipient of European funds up to the 2014-2020 Multiannual Financial Framework (MFF) EU budget. This basically meant we got more money out of the EU than we put in. Ireland is expected to become a net contributor to the MFF for 2021-2027. Contributions from Member States are based on their financial capacity.

According to figures from Ireland’s Department of Finance(link is external), Ireland has been technically a net contributor to the EU Budget since 2013. However, from 1973 up to 2018 the country had a net benefit of over €40 billion.

The 2020 European Semester report for Ireland shows that Ireland has made remarkable progress in strengthening its financial sector and improving employability since 2014. Much of that success is a result of EU membership.The report also said that Ireland is experiencing strong economic growth, with real GDP growing by 8.2% in 2018.

The EU budget provides a significant contribution to job creation and training in Ireland through the European Social Fund(link is external) (ESF) and the European Regional Development Fund(link is external) (ERDF). From 2014 to 2020 the ESF supported nearly one million Irish people. The European Commission is proposing to invest €1.2 billion in Ireland through ESF and ERDF funding over the period 2021 to 2027.

Ireland has a small, open economy that’s heavily reliant on exports. Being part of the EU's Single Market makes it easier for Irish businesses to trade on both European and international markets.

Our open economy also makes us vulnerable to global events, such as the 2008 global financial crisis. However, Europe’s response to that crisis means that as a member of the EU and the euro area (Eurozone) group we’re now better protected from future financial turmoil.

Ireland’s recovery from the financial crisis was aided by a three year EU/IMF financial assistance programme that ran from 2010-13. The programme was successful and Ireland now has one of the fastest growing economies in the EU.

EU membership has helped Ireland attract billions of euro in direct foreign investment, creating thousands of job opportunities for Irish people.
Irish exporters can also sell more easily and cheaply into lucrative global markets like Canada, Japan, South Korea and Singapore thanks to international EU trade agreements. More agreements are on the way or are currently being negotiated.

As EU citizens, Irish people can live and work freely in any Member State, and that means more opportunities and job choices for Irish workers. Irish citizens working in other EU countries enjoy equal treatment in accessing employment, working conditions and all other social and tax advantages.

Workers’ rights have been improved through EU regulations including measures that improve working hours, conditions and contracts.
Irish jobseekers and students can upload a CV to Europass(link is external), which makes skills and qualifications easily understood in Europe for enrolling in education or training programmes or getting work in another Member State. The EURES website also makes it easier to find a job in another European country.

European legislation on equality in the workplace has ensured that Irish men and women are entitled to equal pay for doing the same job. They also have legal protection when it comes to equal, fair treatment at work and both parents are entitled to maternity and paternity leave. More women can now access the labour market thanks to EU legislation that led to the abolition of an out-dated marriage bar for women in public service jobs in 1973.

Bubbaclaus · 18-08-2020 5:39pm

EU membership and an attractive tax regime for US multinationals, who took the bait and provided tens of thousands of well paid jobs.

Always found it interesting how some Irish people seem to despise the things that brought prosperity to the country, such as the 12.5% Corporate Tax rate.

gmisk · 18-08-2020 5:39pm

Timberrrrrrrr wrote: »

The EU poured a shìt tonne of money into infrastructure, this helped to connect the country and attracted foreign investment (Intel, Microsoft, IBM etc) thus creating jobs.

That about sums it up.
Plus corporation taxes being low.

The fact we are english speaking and have a decent level of education helped too.

Charles Babbage · 18-08-2020 5:41pm

In 1986 the Economist ran an article on Ireland "The poorest of the rich". Countries in NW Europe are generally rich and once we joined in then we became likewise.

Geuze · 19-08-2020 10:50pm

A key turning point was 1958, and the publication of T.K.Whitaker's report.

After that, the economy was gradually re-opened.

KyussB · 20-08-2020 6:15am

Ireland was already one of the top 5 most open economies in Europe in the early 50's - it seems Whitaker's contribution is a bit of a myth:
https://twitter.com/CMacCaba/status/1293329614924914688

Since we wedded ourselves to the Sterling, through using a fixed exchange rate instead of floating our currency - and there was a lack of proper private investment - this trashed our trade balance, and we decided to use state subsidies to try to encourage foreign businesses to set up base here, to remedy this - instead of floating our currency and ensuring private banks provided enough investment.

Sam Russell · 04-10-2021 10:34pm

I think there a few benchmark events for the Irish economy.

We were tied to sterling from independence, so breaking that tie would be huge. However, it brought few benefits for Ireland.

The battle of the annuities started the economic war with Britain 1932 1938, which led to devastation to the economic collapse of many businesses which left the economy in tatters. My family were big losers.

In 1939, Britain were looking for food, and particularly beef. Unfortunately, it had been culled.

In 1965, the Britain Ireland Free trade agreement came into force, favouring Britain and its cheap food policy.

1st Jan 1973 Ireland joined the EEC, along with Denmark and Britain. It was this that allowed us to prosper. We joined as paupers with an average income of 60% of the EEC average - of the then 9 member states.

In March 1979, Ireland broke with Sterling and went with what became the Euro. Currently sterling is worth 10% less than the Irish Pound was at the aunch of the Euro, while it was worth 10% more than the Irish pound at launch of the Euro.

Whitaker's contribution was paramount in the elevation of Ireland's growth. He pushed for industrial growth, and inward investment. It worked. He persuaded Lemass and that is what it took.

We are doing well - mostly, well at least the better off - pity about the poor performance of politicians in the last two decades - boom, bust - boomier, bustier. Lots of bad decisions, some major, some corrupt, some just stupid.

FintanMcluskey · 04-10-2021 10:46pm

FDI attracted by low corporate tax

https://www.irishtimes.com/business/economy/foreign-direct-investment-in-ireland-exceeds-1-trillion-for-first-time-1.4565120

In a new report on Irish FDI trends, the CSO said the value of inward investment that year rose to €1.03 trillion – equal to 288 per cent of Ireland’s gross domestic product (GDP).

The indigenous industry in Ireland is worth very little and mostly consists of tractor exhaust manufacturer's

Unfortunately despite the magnitude of FDI investment, we haven't spent wisely and have rather poor infrastructure coupled with an enormous national debt level

It wont last

Mattie500 · 05-10-2021 12:09am

Education and the EEC and subsequently the EU. Foreign direct investment utilising an educated workforce creating a prosperous economy. Some would have you believe everything is awful but the reality is somewhat different.

Ash.J.Williams · 05-10-2021 12:11am

https://www.boards.ie/discussion/comment/114345718#Comment_114345718

There’s more to it, those companies seem to like it here , trump failed to get them back

Wanderer78 · 05-10-2021 10:10am

https://www.boards.ie/discussion/comment/117977377#Comment_117977377

with yet another bulk of findings from the pandora papers, we ve clearly moved more towards a tax exile for fdi, than actual investment, even though there has been major investments over the decades, fdi is effectively just passing through here, and heading to other tax exiles, and we re just picking off the scraps for ourselves, this is truly unsustainable, and incredibly reputationally damaging.

in all of this, we re continually exposing our indigenous industries, in particular our sme's, who continually are left out to dry, picking up the pieces, including in regards taxation, always baring in mind, they collectively actually employ the majority of people. this approach is just causing monopolisation of many of our sectors, opening the door for major global players to control markets, and forcing many smaller players out of business.

again, national(public) debt isnt truly a major problem, as theres now sufficient evidence to support, the majority of economic crashes globally, have in fact been caused by excessive private debt, i.e. an over reliance on the private sector money supply, i.e. the credit supply, as 08 yet again showed us. we must move back towards a more public money supply, i.e. via deficits etc, in order to stabilise our economies, but to direct these funds more towards productive means, and not the default of asset markets, i.e. property markets etc

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