Why Irish Eyes Are Smiling

By Scott R. Cooper, Crook County Judge
published in the Central Oregonian, November 2004

The Irish Economic Miracle Has Lessons For Oregon

When you think about economic development, perhaps the last place you think of is Ireland—that little island off the west coast of England on the other side of the Atlantic. But think again: recently events in that the tiny republic may well offer a roadmap to economic vitality for our own state.

In Europe, Ireland is referred to as the Celtic Tiger. It got that nickname as a result of the phenomenal growth the Irish economy has experienced in the past five years. I had an opportunity to see that growth up close during a 9-day vacation around the country in September.

What I saw looked familiar.

The Irish Republic covers 27,135 square miles. It’s about one third the size of Oregon. Its principle features are mountains, plains, valleys and coasts. The primary color is green (except when it’s gray, which is most of the time because it rains every day.) As nations go, Ireland is young. Although it has been inhabited for thousands of years, the Irish state only organized political independence from Great Britain in 1916. The population is young, too. The average age is 26. In total, 3.9 million people live in Oregon, compared to Ireland’s 3.5 million. About a third of the population lives in a single city (Dublin.) Employees work principally in agriculture (8 percent), industry (29 percent) and services (64 percent). Those numbers are comparable numbers to the distribution of jobs in Oregon. At one time, Ireland had thriving natural resource industries in wood products and fisheries, but those have been greatly reduced in significance.

Not so long ago, Ireland’s unemployment situation was dire. In 1996, the national unemployment rate was 12 percent. Instead of working together to solve the problem, Ireland’s leaders of Ireland’s various political parties spent their time blaming each other’s parties and the policy choices of the government in London for their problems. Meanwhile, the real culprits—a tax rate which discouraged investment, a poorly skilled workforce and undereducated population unprepared to compete in the new economy and an excessively generous social welfare system—continued to drag down the economy and discourage much needed foreign investment.

All that changed with the election of Mary Robinson as prime minister of the country in 1997. Much like Britain’s Margaret Thatcher, Mary Robinson was one of those rare people who grasped the national imagination and almost single-handedly changed the culture of a nation. With a series of economic and social reforms, Robinson and her government brought about astonishing progress in a very short time

Between 1997 and 2001, the Irish economy grew an average 9 percent per year. Ireland slashed its corporate tax rate 30 percent as a means of attracting new investment and began offering cash incentives to any corporation which would build a headquarters in Ireland. The government also increased its investment in higher education, and now boasts one of the most highly skilled and best educated workforces in Europe. Equally importantly, the country launched an aggressive tourism campaign supported by one of the best-funded and best-functioning government tourism agencies —a move which had the dual benefit of exposing Ireland’s potential to the world business community and providing economic opportunities for entrepreneurs and service providers in more rural parts of the nation, which were missing out on the economic boom which came first to the urban areas of the state.

The plan worked astonishingly well. Ireland quickly gained the nickname “the Celtic Tiger” of the European Union. Its gross domestic product, including exports, soared to $117 billion in 2003. Unemployment was slashed to an astonishing 3 percent nationwide—a level which requires the country to import labor to fill all the available jobs. Literacy rates jumped to 98 percent, and every corner of the nation prospered as tourists poured in creating jobs in the service, entertainment and hospitality industry. Although the country was not immune from the economic effects of a worldwide slowdown which began in 2001, its economy continues to prosper, with unemployment holding steady at 5 percent, inflation at 3.1 percent and, by my count, 55 cranes looming over major construction projects on the Dublin skyline.

The question I was left to ponder as we flew out of Dublin was: “If the Irish can overcome their political and historical difficulties, why can’t we?”

Ireland did several things that would benefit us in Oregon. First, the county’s leadership united behind a common goal of economic recovery. Its parliament gave its leader a charge, and then gave her the support to carry out her responsibilities—something Oregon’s legislature seems decidedly unwilling to do. Secondly, the country recognized that in new economy, old skills aren’t adequate. By placing a high value on education and skill development, the nation was able to turn its workforce from a problem which had to be solved into an asset new businesses were eager to capitalize on. Thirdly, the nation quit pining for a way of life that was yesterday and turned its attention to what could be achieved realistically tomorrow. Fourthly, the Irish faced squarely the undeniable fiscal reality that private businesses and entrepreneurs, not governments, ultimately create jobs. As a national policy, Ireland recognized that when companies prosper, so do workers and communities, and it eliminated long-standing barriers to those profits. Finally, Ireland stopped waiting for the world to find out what the Irish had to offer and instead, through astute tourism and marketing, brought the world to its doorstep.

It sounds simple. But as any Oregonian who has been around since the late 1980s knows, the delivery is the tough part. Ireland is a country which one writer described as “paralyzed under the weight of its own history.” In some ways, that’s an apt description of the current political climate in Oregon, where our citizens and leaders are caught between mourning a lost past and fighting amongst themselves over how best to confront the future. I take comfort that one small country with geography, a population and a problem not unlike our own found a solution. There may be hope for us yet.