Emerald Envy: Unveiling the Astonishing Success of Ireland’s Economy Through a Canadian’s Eyes

As a Canadian, I find myself in awe of the remarkable ascension of Ireland to one of the richest countries in the world. It is with a sense of admiration and respect that I reflect upon the incredible journey this nation has undertaken, transforming itself into an economic powerhouse and a beacon of prosperity.

The story of Ireland’s rise to prominence is a testament to the indomitable spirit, resilience, and unwavering determination of its people. However, Ireland was not always a developed country. In fact, it was one of the poorest countries in the world. It was a country that faced a period of famine that caused a higher number of emigration and fatalities due to severe starvation. This is also the reason why there is a higher number of Irish people living all over the world.

A century after gaining independence from the UK and decades of recovering from the aftermath of the potato famine, Ireland boosted a stable and continuously growing economy. The country’s miraculous recovery was so incredible that the significant GDP growth seemed unrealistic to the world.

So, how did Ireland go from struggling with famine to one of the wealthiest nations in the world? Let’s get into it.

The Devastation of the Potato Famine

Ireland was in extreme poverty even before the famine. Ireland wasn’t industrialized, a higher number of people continued to compete for land, and the few established industries were struggling to survive. Due to poverty, fishermen weren’t able to preserve their catch, and the English Protestant gentry owned all the productive farms and took high rents from the farmers.

The properties were managed by middlemen who would split the large farms into smaller sections to get more rent. Since the sectioned farms were too small to hire any labourers, there was a major decline in employment opportunities.

The only way for people to support themselves and their families was to grow and sell potatoes. Since a higher number of potatoes can be grown in a small area of land, it provided food for entire families for the entire year. Potatoes worked great for them since they were nutritious, could be fed to farm animals, and required little tools to grow.

Over half of the Irish population depended on potatoes as the major source of nourishment and livelihood. Unfortunately, Ireland experienced a major plant disease called Phytophthora infestans in 1845 that spread rapidly throughout the country and destroyed most of the potato crop. Within seven years, three-quarters of the potato crop was infected.

Since more than half of the Irish population relied on their potato crop, this infestation resulted in a catastrophic impact. The potato crop started recovering in 1852, but the damage was massive. From 1845 to 1854, Ireland experienced a period of emigration, disease, starvation and fatalities.

Overcoming the Shadows of the 19th Century

Even years after the famine, hunger continued to be a significant problem in the country. In 1849, the Encumbered Estates Act further worsened the problem as it meant the estates in debt could be auctioned off. This resulted in mass evictions and the rise of the Land League, the politically organized labourers and farmers alliance to take steps against the landlords responsible for the rise in evictions.

This was the start of political reforms to help the tenants and farmers, starting with the Land Act in 1881. Gradually, the farmers and tenants were able to purchase the holdings from the landlords with the Wyndham Act of 1903. This ended the centuries-long exploitation of the landlord system in the country.

Meanwhile, the struggle for independence started that continued throughout the 1900s. After weeks of armed rebellion, destruction, and fatalities, the hundreds of years of British rule on the country came to an end on April 18, 1949. Ireland was still recovering from the famine, and little economic progress led to a higher number of talent leaving Ireland for better opportunities. This resulted in a steady population decline.

The Irish government implemented the Tallaght strategy to tackle these economic issues, where all political parties in the country came together to suggest economic reforms. Taxes were cut, and there was also a cut in spending. This resulted in people investing and spending more, improving the economy gradually. These policies became the turning point in Ireland’s economy.

Becoming the Celtic Tiger

Throughout 1995 and 2007, Ireland rapidly grew its economy at a rate of 9.4% annually. The country’s GDP drastically grew by 229% from 1987 to 2007. This major boom earned the country the nickname of Celtic Tiger. Ireland made a massive jump from being a poor country to one of the richest ones in Europe within a few years.

The first boom was during the 1990s, when the low tax rates attracted many foreign investors. The change in labour policies made it simpler and easier for these businesses to hire within Ireland, which solved the unemployment problems and further improved the economy.

Further reasons for this major economic boom included an increase in construction and consumer spending, social partnerships among trade unions, government, and employers, the rise of women in the workforce, higher investment in education, and Ireland becoming a member of the EU.

The Second Boom, the Fall, and the Recovery

In 2004, Ireland experienced a second boom when it opened doors to EU member nations’ workers. Other contributing factors to the comeback of Ireland in 2004 include:

Revitalization of the IT industry
Growth in tourism
Establishment of foreign businesses that created more job opportunities
Multinational corporations investment
Increase in housing prices

However, Ireland was hit severely by the global financial crisis in 2008. The government requested the European Union and IMF to prevent the financial institution from failing, which could have worsened the situation for the country.

Fortunately, Ireland secured rescue deals to help with the economy, which is what saved Ireland drastically. In 2012, Ireland started to recover from the 2008 crisis and began to grow again. Multinational companies started investing in the country to take advantage of the low taxes, resulting in dramatic GDP growth. This unbelievable growth, particularly the 26% GPD growth in 2015, was famously labelled as “leprechaun economics.”

Conclusion

Today, Ireland has a strong economy that is equal to Britain. It boasted a diversified economy, which continued to grow even during the pandemic. Its stable economic and political system allowed the country to rise rapidly from poverty and become one of the richest countries in the world.

The establishment of leading tech companies in the country from all over the world is one of the major reasons behind the economic prosperity of Ireland. Hundreds of foreign businesses have operations and even headquarters in Ireland. The country is among the biggest exporters of software-related services, medical devices, and pharmaceuticals.

Ireland is also the leading airline powerhouse in the world, with multiple multinational aircraft companies operating from the country. Around 22% of the aircraft fleet worldwide is managed by the company, with a 40% share of leased aircraft in the global fleet.

There are major lessons that can be learned from the recovery and growth of Ireland. From creating the right policies in time to increase employment opportunities for the citizens and investing the financial aid properly to save the economy during the global financial crisis, Ireland has provided other countries with a roadmap for handling challenges and rising from destruction to prosperity.

 

Marc-Roger Gagné MAPP

@ottlegalrebels