This stuff is just amazing. The Toronto Star really did a hatchet job on the Irish Miracle. But it’s an absolute joke. It is about the same as saying the ‘Ontario miracle’ of the past 15 years was a mistake because of the troubles the economy is currently facing.
A cursory look at the underpinnings of Ireland’s boom economy demonstrates its lack of sustainability. It was vulnerable to collapse in America’s boom economy, the source of two-thirds of foreign investment.
Look at that statement closely. The boom economy isn’t sustainable. That the Toronto Star makes such a conclusion is a waste of ink. Of course a boom economy isn’t sustainable. By definition a boom must come to an end. But to invalidate the 20 years of growth because of a strong pull back now makes no economic sense. The Toronto Star is saying that an economic development model that is predicated on foreign direct investment is invalid because Ireland’s 20 years of growth has now been offset by a couple of years of decline.
That’s crazy. I’ll take 18 years of rapid growth for two of decline any day of the week. That is exactly what has happened in Ontario and very few people are suggesting that Ontario has been a failure.
There are lessons to be learned from Ireland. The rapid increase in housing costs and wage costs did become problematic in the past couple of years. There may have been public policy moves that could have mitigated this somewhat. It is true that the rapid growth led to significant government spending to try and keep up with infrastructure needs (and now a high debt to GDP ratio). Ireland was spending like the boom would go on forever.
But the Toronto Star completely misses the point and will just add fuel to the fire of folks that want to cut places like New Brunswick out of the global business investment flow.
New Brunswick missed out on the growth of the past 15 years. As I have shown in this blog- with the notable exception of the call centre sector – the province’s manufacturing sector, life sciences, film & new media, aerospace sectors – most of Canada’s growth engines hardly grew at all here. And that is why we are not losing as many jobs. You can’t lose what you didnt’ get in the first place.
I’m disappointed by this narrow and biased interpretation of the Irish miracle and its current challenges.
Maybe those great journalists at the Star should pick up the telephone and ask any Irish person if they would rather be back in the 1970s with the massive out-migration and the dead economy. A 20 year boom was bound to come to an end and because of the close ties to the US market, the downturn has been particularly challenging. But, like Ontario, to wipe out the gains of the past 20 years it would take 15 straight years of a 6% GDP decline.
And that will never happen (has never happened in history).