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Sunday, March 15, 2009

COUNTERPOINT

Now that the Celtic tiger's turned tail, whither the Emerald Isle?


Irish patriot, poet and eminent surgeon Oliver St. John Gogarty (1878-1957) once played a wily prank on a drunken acquaintance. He stuffed the poor chap, who was catatonic, into a sack and sold him to The Royal College of Surgeons strictly, one would assume, in the interests of medical science. His friend apparently woke up and struggled free just in the nick, if you will excuse the expression, of time.

A few days ago, I returned from a trip to Dublin, where I found the state of the Irish economy was similar to that of Dr. Gogarty's hapless friend. But whether, like him, it revives before sustaining really deep wounds is certainly debatable.

Just a year ago, my previous visit to Ireland had revealed a Celtic tiger roaring loudest among the fat-cat nations around the world. The country then was not so much being developed as redesigned: construction sites were everywhere; snazzy, luxurious housing was selling at skyrocketing prices; and hordes of foreign workers, primarily Poles, were thronging the pubs.

This year, though, I found that construction had largely halted, its scaffolding standing like skeletons in an exposed landscape, while real-estate "values" had plummeted. And, in a paradoxical twist, Dell Computer, the world's No. 2 PC manufacturer, had recently announced it was moving production from its Limerick plant to one in the Polish city of Lodz. It is also estimated that a third of the 200,000 Poles once in Ireland are either homeward bound or already there.

As for the Irish themselves, in the past when they emigrated in droves in search of their fortunes, they at least had other countries to go to — primarily mainland Britain and the United States. Now with the global crisis, where are the economic magnets to lure them?

Irish playwright Brendan Behan once wrote, "It is always winter in Dublin." The outlook there and across the Emerald Isle is wintery indeed these days. According to the Irish Economic and Social Research Institute, unemployment is set to rise to between 12 and 15 percent, though some foresee it reaching 20 percent (it passed 10 percent last month). Social and Family Affairs Minister Mary Hanafin admitted this month that 90 percent of private- sector pension schemes were in deficit — to the tune of some 30 billion euro in all; while Master of the High Court Edmund Honohan warned on Feb. 12 of "a recession of historic proportions, with an avalanche of home repossession cases."

To make matters worse, last week the "2009 European Growth and Jobs Indicator," which measures competitiveness in the top countries of the European Union, had Ireland slipping from fourth to 13th place — just above Italy — in a one-year fall it termed "unprecedented."

Ireland performed badly in economic growth, productivity, employment, sustainability of public finances and investment in capital and new equipment — while Finland came out on top.

What went wrong?

I have been visiting Ireland since the summer of 1970 and have always found that the country's strengths lie in the richness of its culture, the beauty of its countryside and the irrepressible friendliness of its people. These, needless to say, are as much in evidence in 2009 as they were nearly 40 years ago; and it is these qualities, virtues and charms that will sustain Ireland through its current dark times. After all, didn't they see it through centuries of British oppression and unrelenting suppression from their own Roman Catholic Church?

During the 1990s, however, Ireland was transformed. By the time it adopted the euro as its currency in January 2002, it had become cosmopolitan and open, and ordinary Irish people were enjoying a lifestyle their ancestors thought existed anywhere but at home.

Meanwhile, the powerful grip of the Church on the Irish soul had considerably slackened, allowing liberal values to take hold in virtually all layers of society. In Ireland, the Church had for centuries never much bothered with intellectual or theological issues as it did in other faith-driven Christian countries. Instead it was obsessed with social and political control. When the locus of Irish politics became aligned with that in progressive Europe, and Irish society jumped from the 19th — or 18th — century into the 21st, the Church found itself isolated from the mainstream. Now it is effectively defunct as a cohesive force in the country.

The other monumental change of the past two decades concerns the national ethos. The Irish had long been fixated on their neighbor, Britain, the colonizer that kept them in misery until the establishment, on Dec. 6, 1922, of the Irish Free State. Now Ireland has begun looking high over the British shoulder, joining the EU and accepting the continent's multicultural value system as its own. Irish people of talent began returning to the homeland, and in the early '90s the number of immigrants to Ireland surpassed the number of emigrants for the first time ever. Schools were filled with children from all manner of ethnic backgrounds — all speaking in the tones of Cork, Limerick, Galway or wherever across the country.

The Church is unlikely to experience a spiritual or political revival in Ireland; and though the ethnic mix may become somewhat less heady, Irish society has been opened up for good. But with only 4.3 million people, the country is not a major player on the world financial scene. And now, unmoored as it is, it can be tossed about like a buoy when big ships make waves.

This month's Public Sector Times, the newspaper of the Civil and Public Service in Ireland, quotes Finance Minister Brian Lenihan:

"We are living in turbulent times. The difficulties facing our economy are the most challenging in the history of our State. . . . Our problem is compounded by unhelpful exchange rate movements and by our overreliance in the recent past on the housing sector as a driver of growth."

In other words, the Irish fell right into the big bubble, thinking the sky was the only limit on their over-leveraged property prices. A recovery in that sector is unlikely for many years to come.

The government in Ireland, following the U.S. and British leads, is keen to bail out the banks and the builders. But, with the exception of the Green Party, all political parties — from the governing Fianna Fail to Fine Gael and the Labour Party — received contributions from those very banks and builders. Will they be prepared to cut the lifeline that sustained them? Will the parties really be able to restructure the economy on lines that will benefit ordinary citizens and cater to their welfare?

This is a dilemma for all capitalist countries, not only Ireland.

Ireland has lost none of its status for the culture it has given the world. Dublin is still up there as the sixth most-visited European city, behind London, Paris, Rome, Prague and Barcelona — and above Vienna, Amsterdam, Madrid and Berlin.

If you can ignore the abominable service you get in restaurants and hotels, and focus on the kindliness of those you meet in their homes and on the streets of Dublin, you will find one of the warmest peoples in the world.

They will, I am sure, survive this new catatonic state; though, recalling Dr. Gogarty's luckless incipient corpse, how long Ireland will take to struggle free and stand again on its own two feet is anybody's guess.



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