View
26
Download
1
Category
Preview:
DESCRIPTION
The Celtic Tiger A Macro and a Micro View. Dr. Joseph McFadden University of Saint Thomas Houston, Texas. The Celtic Tiger – A Macro Look. In 2000, Ireland was selected as the most global nation in the world - PowerPoint PPT Presentation
Citation preview
The Celtic TigerThe Celtic TigerA Macro and a Micro ViewA Macro and a Micro View
Dr. Joseph McFaddenDr. Joseph McFadden
University of Saint ThomasUniversity of Saint Thomas
Houston, TexasHouston, Texas
The Celtic Tiger – A Macro LookThe Celtic Tiger – A Macro Look
In 2000, Ireland was selected as the In 2000, Ireland was selected as the most global nation in the worldmost global nation in the world
Two strong categories: economic Two strong categories: economic integration and personal contact with integration and personal contact with internationalisminternationalism
Ireland also ranked #1 on a recent Ireland also ranked #1 on a recent survey on a happiness scalesurvey on a happiness scale
A successful combination of A successful combination of globalization and happiness!globalization and happiness!
The Celtic TigerThe Celtic Tiger
Ireland began to flourish in the 90sIreland began to flourish in the 90s Positive response to the criticism of Positive response to the criticism of
the Whitaker Reportthe Whitaker Report Consultants had three strong Consultants had three strong
recommendations: break recommendations: break dependence on Britain, stop being dependence on Britain, stop being economic illiterates, and create a economic illiterates, and create a more favorable economic more favorable economic development climatedevelopment climate
Economic Progress in IrelandEconomic Progress in Ireland
The nation represents a true The nation represents a true economic miracleeconomic miracle
Is Ireland a model?Is Ireland a model? A pattern of dynamic economic A pattern of dynamic economic
success can be seen when success can be seen when comparing the pre-Celtic world with comparing the pre-Celtic world with the Celtic Tiger Worldthe Celtic Tiger World
Ireland – 1973 and pre-Celtic DaysIreland – 1973 and pre-Celtic Days
GNP – 59% that of the European GNP – 59% that of the European Community average!Community average!
Per capita income among the lowest Per capita income among the lowest in Europein Europe
61% of exports went to the UK, only 61% of exports went to the UK, only 9% to other European nations9% to other European nations
Agriculture: limited electricity and Agriculture: limited electricity and tractorstractors
Economic isolationEconomic isolation
Ireland – 1990s and BeyondIreland – 1990s and Beyond
GNP – grew by 73%, an average of GNP – grew by 73%, an average of 9% growth per year in a decade!9% growth per year in a decade!
Unemployment holding at 5%; Unemployment holding at 5%; Ireland imports workers, and 10% or Ireland imports workers, and 10% or more of the population is foreign more of the population is foreign bornborn
Exports – 68% to EU (22% to UK) and Exports – 68% to EU (22% to UK) and 15% to US15% to US
Irish middle class grew by 25%Irish middle class grew by 25%
Factors of Economic ProgressFactors of Economic Progress
Transnational ApproachTransnational Approach Laws and IncentivesLaws and Incentives EducationEducation TargetingTargeting Societal SupportSocietal Support National Partnership AgreementsNational Partnership Agreements European UnionEuropean Union
Transnational ApproachTransnational Approach
Welcoming companies that Welcoming companies that manufacture in Ireland for European manufacture in Ireland for European markets and beyondmarkets and beyond
New money is brought in, and New money is brought in, and companies borrow little or no money companies borrow little or no money from Irelandfrom Ireland
An explanation as to why Ireland’s An explanation as to why Ireland’s GDP is 25% larger than its GNPGDP is 25% larger than its GNP
Laws and IncentivesLaws and Incentives
Very attractive corporate income taxVery attractive corporate income tax Lowest corporate tax rate in the EU!Lowest corporate tax rate in the EU! Permits and protects a high rate of Permits and protects a high rate of
profitprofit Fiscal restraint to hold down inflationFiscal restraint to hold down inflation Minimal restrictions on business Minimal restrictions on business
operationsoperations Maximum integration into European Maximum integration into European
economyeconomy
EducationEducation
Heavy investment especially in Heavy investment especially in Secondary and third level education Secondary and third level education with paid tuition for all enrolledwith paid tuition for all enrolled
Emphasis on science and technologyEmphasis on science and technology Students earning admission have Students earning admission have
funding to support themfunding to support them Educational attainment established Educational attainment established
as a national priority!as a national priority!
TargetingTargeting
Ireland has targeted key business Ireland has targeted key business areas that are likely to remainareas that are likely to remain
Used tax and other incentives to go Used tax and other incentives to go after the markets they desiredafter the markets they desired
Key targeted areas: Computers, Key targeted areas: Computers, Pharmaceuticals, Electronics, Pharmaceuticals, Electronics, Telecommunications, and the most Telecommunications, and the most recent International Logistics and recent International Logistics and ShippingShipping
Societal SupportSocietal Support
Progress could not be achieved Progress could not be achieved without the people’s supportwithout the people’s support
High income taxesHigh income taxes Irish provincialism and ambivalence Irish provincialism and ambivalence
regarding capitalism have been regarding capitalism have been overcomeovercome
Globalization does not necessarily Globalization does not necessarily conflict with national valuesconflict with national values
National Partnership AgreementsNational Partnership Agreements
National agreements are negotiated National agreements are negotiated and voted on by the Irish Congress of and voted on by the Irish Congress of Trade Unions (ICTU)Trade Unions (ICTU)
A “National Partnership Agreement A “National Partnership Agreement Towards 2016” is in progressTowards 2016” is in progress
It places specific emphasis on social It places specific emphasis on social justicejustice
European UnionEuropean Union
Especially in the areas of agriculture Especially in the areas of agriculture support, infra-structure projects, support, infra-structure projects, transfer funds, and standardizationtransfer funds, and standardization
The kind of planning that other The kind of planning that other nations did under the Marshall Plannations did under the Marshall Plan
Throughout Ireland one can see the Throughout Ireland one can see the blue flag of the EUblue flag of the EU
Ireland identified as the Mississippi of Ireland identified as the Mississippi of the EU, and funds flowed inthe EU, and funds flowed in
ConcernsConcerns
Persistence of poverty, income Persistence of poverty, income disparity, acquired debt, and high disparity, acquired debt, and high unemployment among some unemployment among some segments of Irish societysegments of Irish society
How is economic progress affecting How is economic progress affecting Irish values?Irish values?
General EU concerns regarding unfair General EU concerns regarding unfair tax advantage that Ireland enjoystax advantage that Ireland enjoys
Contrast IR with NIContrast IR with NI
The Celtic Tiger – A Micro LookThe Celtic Tiger – A Micro Look
How did economic development work How did economic development work on the ground?on the ground?
Targeted industry: Logistics/Maritime Targeted industry: Logistics/Maritime ShippingShipping
Creation of the Irish Maritime Creation of the Irish Maritime Development Office (IMDO)Development Office (IMDO)
Purpose: to attract companies of the Purpose: to attract companies of the highest operating standards to highest operating standards to IrelandIreland
The Strategy in PracticeThe Strategy in Practice
Ireland conducted a thorough study Ireland conducted a thorough study of the history of the industry in of the history of the industry in questionquestion
They found archaic nationalistic They found archaic nationalistic requirements and a muddled requirements and a muddled Shipping Tonnage Tax situationShipping Tonnage Tax situation
As a response, Ireland avoided As a response, Ireland avoided restricting requirements and devised restricting requirements and devised an attractive Shipping Tonnage Taxan attractive Shipping Tonnage Tax
The Strategy in PracticeThe Strategy in Practice
Education is promoted in order to Education is promoted in order to stimulate careers in maritime stimulate careers in maritime industryindustry
Ireland has also attracted a small but Ireland has also attracted a small but highly qualified dedicated staff of highly qualified dedicated staff of young professionalsyoung professionals
This team tries to meet the real This team tries to meet the real needs of potential operators and needs of potential operators and develops relationships with clientsdevelops relationships with clients
Benefits for CompaniesBenefits for Companies
Lower corporative tax rateLower corporative tax rate Pro-business environmentPro-business environment English speaking Euro global economyEnglish speaking Euro global economy Open-minded, well educated Open-minded, well educated
employeesemployees Emerging maritime knowledge Emerging maritime knowledge
environmentenvironment Educational system geared to serving Educational system geared to serving
international companiesinternational companies
Benefits for CompaniesBenefits for Companies
New maritime college to provide New maritime college to provide skilled workersskilled workers
Opportunities to teachOpportunities to teach Assistance in infrastructure facility Assistance in infrastructure facility
needsneeds Office space in Dublin at attractive Office space in Dublin at attractive
ratesrates Attractive labor rulesAttractive labor rules Positive working environmentPositive working environment
Conclusions and CommentsConclusions and Comments
Having no strong history as a maritime Having no strong history as a maritime nation, Ireland is working hard to nation, Ireland is working hard to overcome the disadvantageovercome the disadvantage
Ireland provides the four requirements Ireland provides the four requirements for business abroad: security for for business abroad: security for employees, fairness in the playing employees, fairness in the playing field, a qualified work force, and field, a qualified work force, and business incentivesbusiness incentives
Conclusions and CommentsConclusions and Comments
Exportation of the Celtic Tiger model Exportation of the Celtic Tiger model is highly unlikelyis highly unlikely
Struggling nations can learn from Struggling nations can learn from Ireland, but the model must be Ireland, but the model must be adapted to specific conditionsadapted to specific conditions
Irish case study represents a Irish case study represents a remarkable improvement that has remarkable improvement that has placed Ireland in the forefront of placed Ireland in the forefront of globalization in the 21globalization in the 21stst century century
Recommended