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The Economy in a Reunited Ireland
 Under the Eire
Athaontaithe (Reunited Ireland) proposal for
a reunited Ireland, the economy will be highly
ranked, as it is the engine that generates the finances required to
fund the government and the programs and policy initiatives that we
as empowered citizens collectively choose to live by. It
will be managed in a way that identifies and mitigates
vulnerabilities and at the same time develop a home-grown economic
base that will lessens the impact of downturns in the global
economy.
The Irish economy is generally referred to as a highly developed
knowledge-based economy, and alternatively as a small, modern,
trade dependent economy. Both descriptions are apt as they call
attention to the economy’s potential on the upside and vulnerability
on the downside. The economy ranks high amongst highly developed
countries according to a number of economic indicators including the
Gross Domestic Product (GDP), GDP per capita, the Global Innovation index
(GII), the
Organization for Economic Co-operation and Development (OECD)
the International Minimum
Wages Rates and the International Education Power Rankings.
To lend perspective to the relative size of Ireland’s economy, the
following comparison will suffice. The GDP
of the largest economy in the world, the United States is 22.8
trillion; the GDP of Germany, the largest economy in Europe, is 3.9
trillion; and the GDP of Ireland is 548.2 billion. Another important
statistic is the GDP per capita (the GDP divided by the population).
The GDP per capita for the United States amounts to $69,000, for
Germany it amounts to $51,000
and for Ireland it amounts to $99,000. For Ireland these numbers look
great, however, they should not be construed to gauge or compare the
quality of life in any of these countries. There are many other
intangibles not included in GDP statistics that would have to be
factored in to accurately measure quality-of-life issues.
Ireland’s economic system since its ascension into the European
Union has been a mixed-market system embracing a combination of
capitalist and socialist economics elements. Most European countries
work with similar economic systems --- each with their own unique
combinations. It’s difficult to assess the relative success of any
country’s system compared to another due to varying factors,
including, the size and makeup of each economy. Therefore, each must
be judged on how well it's managed and how it benefits the country as
a whole.
The largest sector of the Irish economy is the services sector which
accounts for approximately 55% of the GDP and employs 77% of the
workforce. The second sector, manufacturing, accounts for
approximately 38% of the GDP and employs 19% of the workforce. The
third sector, agriculture accounts for approximately 1.5% of GPD and
employs 4% of the workforce. Other sectors including public
administration and transport account for the remainder.
The fact that agriculture accounts for only 1.5% of the GDP is an
anomaly of sorts as agriculture has been the mainstay of Ireland’s
economy down through the centuries. At first blush it would seem
that it is the victim of intentional benign neglect so that other
sectors, particularly those with substantial foreign investments,
could be better resourced. If so, it’s short-sighted as it ignores
or downgrades what should be a foundational sector of the economy.
Ireland has been uniquely situated to attract foreign investment. In
addition to being the only English-speaking country with unimpeded
access to the European Union marketplace, it has had a very
favorable tax regime and a highly educated and flexible work force.
As a result, Ireland attracted multinational companies from across
the globe, particularly from the United States. This more than any
other factor is what fuels the Irish economy. According to some data
crunchers, it has raised the standard of living to one of the
highest in Europe. Despite what data crunchers conclude, the term
‘standard of living’ is nonetheless subjective depending on one’s
circumstances and sense of economic security --- for many in
Ireland, in all walks of life, the root cause of an ever-present
gnawing unease.
One factor in particular that has fueled the extraordinary
investment splurge has been the tax regime. European Union
countries require all members to adhere to a common corporate tax
policy so as to even the playing field regarding foreign
investments. To circumvent that requirement, Ireland and a few of
other countries secretly engaged in sweetheart deals with major
players as enticements to site their operations in their respective
countries. When this came to light, compliant countries in Europe
together with the United States forced Ireland and the other non-compliant countries to
agree to an across-the-board minimum corporate tax levy of 15% for
all companies.
This one forced change in Ireland’s
modus operandi will
have an influence where foreign companies invest their resources
going forward. A case in point is Puerto Rico where pharmaceutical
companies cut back on their operations when the tax incentives
expired.
Despite Ireland’s successes thus far, the future is an open book.
Irrespective of when Ireland is reunited, its leaders must be
visionary in their planning, not only for next year but for the
future we leave our successors.
To summarize, the federal system as proposed in the Eire
Athaontaithe proposal
is best suited to merge the existing economies of the Republic of
Ireland and Northern Ireland into a workable system with the least
negative impact. A long-term fix will require new regional economic
systems to facilitate a degree of regional parity in wealth, income,
development and government resources.
This can be achieved without losing any of
what is already gained. In can be done by tweaking the system to
remove vulnerabilities inherent in foreign-owned enterprises and by
providing adequate funding for domestic-based startups and
entrepreneurs so that they can develop a home-grown sustainable
economic base. Agriculture would also receive more attention and
funding so as to take full advantage of the rich soil of Ireland
which
a few centuries ago fed itself and also exported substantial
quantities of food and livestock.
TMMTP
Date posted 8/6/2022
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