Contrary to the wishes of many who have commented on this blog, I don’t want to “feck off back to America”. I really like it here. Ireland has a lot going for it. But, as someone who spends a lot of time thinking about Ireland, lately I’ve been plagued by one vital question:
“With corporate taxes already set perilously (humiliatingly) low, few natural resources, and crippling national debt, what industry or enterprise will foster Ireland’s financial turnaround?”
That a financial turnaround, nay, another “boom”, will happen seems to be taken as a foregone conclusion. In many quarters, the levels of spending still seem quite high. And the general mood seems to be that the current financial situation is but a temporary slowdown until we get back to what we so richly deserve. Notice I said “deserve”.
If the sentiment were “get back to what we are capable of”, I would say that’s the plucky Irish spirit and eternal optimism, and would believe that they/we are willing to work hard to get back to Celtic levels of financial “security”. Instead the feeling seems to be that we are all just waiting for Angela Merkel to wake up and realize how much she needs Ireland, and turn the money tap back on, just because, well, we’re Ireland.
The spoiled years of prosperity seem to have created a sense of, “We deserve that. It’s our right and due.” Granted, that was/is the general attitude in the U.S., and seems to be prevalent in other places that have undergone a major boom and bust cycle in the last few decades. Perhaps that’s just the nature of corporatist-fueled human greed.
The problem comes when people listen to their leaders who tell them that they can spend their way out of crisis. Those leaders, with their ties to big business, gladly tell the masses that a strong retail sector is the key, and that once spending comes back, it’ll all be grand. That happens everywhere there is a boom/bust cycle and the leaders have strong links to business.
The result is that people spend like drunken sailors, whether they can afford it or not. They’ve been told that they are doing their bit for the economy, and believe that when things turn around they’ll be able to pay the tab. For small, under resourced countries like Ireland, that’s a huge problem. Booms are rare in economies like ours. And you have to have something to go boom.
Ireland, as beautiful as it is, has no substantive, exploitable mineral wealth. There is talk of natural gas reserves in the west. Where, and how much? What kind of infrastructure do we need to profit from it? If it’s handled anything like Ireland’s oil reserves, we’ll likely sign away the rights and leases for a pittance. Ireland is perfect for wind power generation, but how do we develop that beyond cheap power for ourselves? Can we build turbine factories? There is a significant pharmaceuticals and biotech community in Ireland already. But, like the current tech sector, how/why would that expand? Ireland’s corporate tax rates are now at around 12%. With the brightest minds at Google (and the other multinationals in Ireland) hard at work exploiting loopholes to get the effective rate below 5%, you have to ask, what manner of guile and seduction will Ireland use to tart itself up next time?
We say we want to be the best small country for business, but with a capital city sporting an antiquated public water system, mass transit lines that don’t connect (yet), and national connectivity still in its infancy, how do we compete in a way that goes beyond simply holding corporate attention until somebody undercuts us ten years down the road?
As a profoundly creative country, with a history of innovation in the arts, sports, and most recently food, I’d like to think that the boom will come in the form of some new endeavor, a (literal) cottage industry, endemic to Ireland. But what will that be?
For Prospective Immigrants: To anyone considering moving somewhere based on the fact that said country is undergoing a boom, I say, “That’s great”. But, before you go, ask yourself a few questions. What is that boom based on? Will it last? When it’s over, how are the people, and the country likely to react? Where will the country’s next boom come from, and the one after that?
Things to look forward to in upcoming posts:
- Corporate Taxes Abroad, and the Con Artistry of Luring Foreign Investment
- Ireland’s Upward Only Rent Review