Ireland, The Economic Growth Leader


03/22/2016

There are not many countries able to achieve economic growth at almost 8 percent. Even China, which last year managed to increase its GDP "only" by 6.9 per cent, hopes at best to remain at this level in the coming years. However, the north-western edge of Europe is home for a state with a population of 4.5 million people, which could make an economic breakthrough. Yet, the significant figure got lost in the flow of news.



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This is Ireland. In 2014, the growth rate of the economy was 5.2 per cent, which has been the best result in the entire European Union. In 2015, it accelerated to 7.8 percent, which is several times higher than in most EU countries. China's economic performance slowed in the past year - in Ireland, on the contrary, it is growing.  

Irish statisticians traditionally take more time to summarize economic data than their counterparts on the mainland do. That is why the official announcement about the last year's GDP growth to 7.8 per cent came from Dublin only in mid-March - the latest pan-European indicators. As a result, this very significant figure was literally snowed under the turbulent flow of current world news.

The news is interesting for at least two reasons. Only five and a half years ago, bubbles in the overheated real estate market and in the bloated banking sector burst in Ireland. The country found itself on the verge of bankruptcy. In autumn 2010, it became the second euro zone country after Greece to receive billions of dollars in emergency financial assistance from the creditors - the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF).

Successful recovery of the Irish economy confirms thus the correctness and effectiveness of the program of austerity and reforms, on which the European stabilization fund and the IMF insist. Ireland later was followed by Portugal, Spain and Cyprus, only their options of such programs were slightly different. So far, only Greece haven’t delivered desired results.

Secondly, the Republic of Ireland since the mid-1990s until the mid-2000s has been one of the leaders of the EU in terms of economic growth (about 6% annually). Ireland’s current return to the same dynamics shows that this country has an economic structure that can repeatedly generate high and even extremely high (for developed countries) growth. At the same time, it indicates willingness of the Irish society to adapt to changing conditions and rapidly agree on the urgent reform.

Once classical agrarian country, known solely for its butter, beer and whiskey, Ireland joined the European Union in 1973. Having conducted large-scale reform of the education system, the country had managed to embark on industrial rails, with an emphasis on high-tech manufacturing and high technology. Now, the largest sector of the Irish economy, providing almost 60 percent of exports, is the pharmaceutical industry, and the most important employers on the island relate to the IT-industry.

Ireland produces microchips for computer giant Intel, here are the European headquarters of Microsoft, Facebook, Google, Twitter, Linkedin. Apple company has already set up around 5000 jobs on the island. To 2017, the company plans to add up about a thousand workers.

Competitive advantage of the Green Island is not only a very low corporate tax rate of 12.5 percent, which Dublin has managed to defend in the negotiations with the creditors. Favorable investment climate is set up also due to an excellent transport infrastructure, created largely with the financial support of the EU, as well as a large number of qualified personnel, low levels of corruption and effective state apparatus. Above that, Ireland is the only euro-zone country where English is the official language.

source: dw.de