Foreign investment has helped Ireland's economy recover from the global financial crisis.
Ireland went from the “poor man of Europe” in the early 1980s to the European economic miracle of the 1990s and early 2000s. Then in 2008 and 2009 the global financial crisis (GFC) sent Ireland’s GDP plunging by more than 20 per cent.
Far from disappearing, the renewed miracle has Ireland back atop the European economic ladder.
Economist David Haugh, of the Organisation for Economic Co-operation and Development, says in a new summary that the Irish economy grew at 6 per cent in 2015 and should grow at more than 10 per cent this year.
Unemployment has dropped from a peak above 15 per cent to a much less destructive 9.3 per cent.
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What’s behind Ireland’s renewed success? Haugh singles out its sustained success in attracting foreign investment. In five years from 2009, a stunning €125 billion in foreign direct investment flowed into Ireland.
Haugh says the rebound is obvious at the “Silicon Docks” area of Dublin’s rejuvenated port, now a powerful information technology cluster where previous investors such as IBM and Microsoft have been joined by big new online software firms like Google, Facebook, Airbnb and LinkedIn, all setting up regional headquarters.
Critics are targeting the Irish success, arguing Ireland’s low corporate tax rate is sheltering corporate profits. The European Commission wants up to €13 billion in back taxes from Apple.
Haugh points to the presence of three other global industries in Ireland: pharmaceuticals, medical devices and financial services. Eight of the top 10 global pharmaceutical companies have a significant presence in Ireland, he says, and half of the world’s top 50 banks and top 20 insurers operate from a Dublin financial services hub.
Haugh argues Irish policymakers laid the ground to attract capital as long ago as the 1960s.
At that time, he says, “a major effort was made to boost education and promote Ireland as a European enterprise destination. By the 1990s, Ireland had developed high-value attributes for innovative global business that the latest financial crisis did not remove.”