Ireland (Part 1) and its Diaspora. 110 million and Muhammad Ali
Back in the spring of 1985 as a graduated university student, I saved money and did the European travel thing and the climax of my 7 month meandering brought me to my ancestral homeland, Ireland, for close to 5 weeks. It was a spectacular combination of fantastic bike rides, hitch hiking, pub crawling, and phenomenal B&B hospitality. I would realize later that it would give me a tremendous history as well.
One humourous takeaway from the whole trip was a quote from the chap who ran the B&B in Galway City where I was staying. As he served me tea and went to tend to the fireplace, we jumped into that age old speculation about the Irish and what could have been if history was slightly altered: "Imagine if all the people of Irish heritage decided to come back to Ireland I offered up to the innkeeper." My innkeeper sat on that hypothetical circumstance while he poked around at the burning turf in the fireplace. " All dee Irish comin back to Ireland? They'd be eatin the babies for breakfast! Da place would be burstin' at the seams. "
Wow. That was some harsh imagery to digest with my eggs and soda bread. But he was probably quite accurate about the outcome of that fantasy.
The unrelenting migration out of The Emerald Isle since the 1840's potato famine spawned a diaspora population of approximately 100 million, including an estimated 50 million in the US alone (including heavyweight champ Muhammad Ali, by the way!). Most of us don't know how much Irish we have in us. So maybe what happens in Ireland may resonate more in the global financial psyche than at first dismissive glance.
What is a staggering statistic is that the population of Ireland today has 30% fewer people than during the 1840's when the number was about 6.5 million.
Change of Mindset in The 1960s
At 4.6 million people, the country has made massive progress in the last 50 years from its dependence on agricultural which was at its peak in the early 1960s, when 50% of Irish exports were from the agriculture sector. (Today it's less than 10%). It was at this time when Irish Prime Minister Sean Lemass initiated a type of Irish industrial revolution and a more modern outward looking view to its relationship with the rest of Europe.
From http://www.fiannafail.ie/content/pages/3174/ : "we welcomed the prospect of the negotiation of an agreement for European political integration – not solely because of its inevitably .... because we saw in this prospect a new source of national strength, an extension of our freedom, and a better opportunity of fulfilling our cultural, economic and social aims."
The 1970s and Early 80s: Sectarian Troubles to Economic Despair – The RUC Guy, The Bogside
Back to my 1985 trip for a second. My journey also gave me a look into the dark side of the "troubles" – the sectarian conflict between Catholics and Protestants in Northern Ireland – Catholics wanting full union with The Republic and Protestants vigorously defending the status quo in its annexation to Great Britain. I got escorted by hitchiking in Northern Ireland into the city of Derry by a super friendly chap who ended up being an off-duty member of the RUC (Royal Ulster Constabulary) reserve. He gave me a whole rundown of the politics as he drove me to the site of the famous Bogside Bloody Sunday memorial (made more famous by that U2 song) where 14 demonstrators were gunned down by The British Army. After his quick drive through and tour, he sent me quickly on my way and let me off near the border crossing over to Donegal. The Catholic part of Derry was a scary looking place back then. I realized later that my host may have taken his life in his hands if he was ever recognized.... and I would be spared because my name was Burke.
This unnerving impact of The Troubles, compounded with the energy crisis, persistent emigration and government's desperate grab for taxes, made the 70's and 80's quite bleak economically. Back then unemployment reached over 17%!
LATE 1980s, 1990s: Political Co-operation, Low Corporate Taxes, Foreign Investment
Climbing out of the economic mess of the 70s and early 80's required some political harmony and tax incentives. In Ireland, the Fine Gael opposition party adopted a strategy of co-operation with the ruling party initiatives if they were bearing fruit in pushing the Irish economy in the right direction. It was introduced by party leader Alan Dukes and named after a speech he gave in the town of Tallaght., so now known as Tallaght strategy. As for tax breaks, it seems that every tech and pharma giant (Intel, Microsoft, Eli Lilly, Google etc.etc.) that wanted a strategic foothold in Europe set up shop in Ireland. And why not: educated work force, English speaking, and - the biggest seduction of all – 12.5% corporate tax rates.
The result was the economic freight train called the Celtic Tiger between the mid 1990s and 2005, where 9 and 10% growth rates were common.