Ireland republic is part of the United Kingdom and has been having an economy based on farming for centuries. The republic has gone through major economic changes including globalization.1
Globalization is the process of conversion of home or local ideas into international ones. This process is a mixture of trade and industry, scientific, socio-cultural, and political forces; it is often used to refer to trade and industry globalization that is the integration of home economies into the worldwide market during the business, wealth flow, relocation, reserves, and spread of expertise.
Ireland’s republic economic history was rural oriented on grazing land and increased dispensation of foodstuffs and the sell overseas business. State-run factories existed. During the 1930s there was an economic hostility where the Irish refused to maintain paying terrain annuities. This hostility was resolved in 1938. Patriotism, later, made many of the industries which were state-run and control to be under semi-state control today. In 1960, the economy expanded. Housing, skill, and overseas direct venture were encouraged. Education was also reformed.1
In the 1980s, Ireland was under par in Europe and was far behind its European counterparts. The republic underwent economic difficulties until the 1990s-2001when they resolved to the Celtic Tiger period.
The Celtic Tiger consisted of benefits that encouraged growth and investment such as, high FDI rate, low corporate tax rates, better economic management, and new social corporation move towards industrial relations. This changed the Irish economy with the European Union pumping over 10 billion pounds into infrastructure. In 2000, the republic turned out to be one of the wealthiest nations, joblessness minimal and earnings tax rate almost half of what was in the 1980s. The Irish economy expanded by five to six percent per annum raising the economic earnings to competitive levels with other Western European states. Economic changes in Ireland have been dynamic over the decades with transformation being attributed to good governance. The introduction of foreign involvement in economic matters helped Ireland shape up to be an economic giant in the region. It was not all rosy, during the dot com economic slowdown, Ireland was not spared. The high-tech sector was affected by a minimal growth rate. This however did not last, in 2003 – 2005, growth rates got better only to suffer again in 2007. This time the effect was a result of the wider global meltdown. Consumer spending has been affected greatly.1
This tremendous growth was admired by other European states with a growth rate of ten percent in 2000 alone. Ireland had labor shortfalls and had to import from other European countries. The Celtic tiger has gone dim since then. It was the first state to go into recession in Europe in the second quarter of 2008 with a GDP of 2.3%. The future is bleak expectations not looking good. Unemployment is skyrocketing forcing laborers to go back to their countries. Investors are also shifting to lucrative areas. Tax intake has collapsed with revenue collection dwindling. A deficit has been noted to be growing and measures to curb it are advised by the European Commission. 1
A country like Ireland has enjoyed exponential growth that relied on global business and investments. This heavily impacted the economy positively giving an impression of the place to be. Investors in the information and communication technology sector saw Ireland as a green zone, putting investments in the country. The laws were conducive and attractive.1
The Celtic Tiger governance style is good but it lacks a solid foundation. Most of the growth was brought about by foreign investment. A base should have been created to transfer technology and create homegrown products that can be developed and exported. The style of governance is best for growing an economy fast, what it lacks are pillars that can support it during such times as recessions. Evidence is seen when Ireland was noted as the first state to enter into a recession. The economy shared in the global market and heavily depended on it for its development and growth. Predictions are now showing a further decline. These statistics should have been foreseen.
The information technology investors came as a result of the accommodating laws. Those who analyzed the future of Ireland’s economy should have looked at the economic history of the island. From as early as the 1930s, economic hardships were created by unforeseen circumstances. This can be classified as a volatile economy. The country needs laws that can survive and have a cushion for tough economic times. Developed economies spread their risks by having multiple industries that are independent and sometimes dependent. This mixture of the economy gives it a support structure such that, when one area is showing signs of difficulty, the other remaining areas are encouraged to grow. This is done by issuing incentives and markets for the produce. In an economy that grows very fast, sharing of risks is recommended. This method keeps the budget together even though not where it was.
Finally, the Celtic Tiger was a good way to jump-start the economy, it is the global focus that was not put under scrutiny.
Works cited
Smith Nicola Jo-Anne. Showcasing globalization.2006 Manchester U Press ISBN-13: 978-0719069932.
Footnotes
- Smith Nicola Jo-Anne. Showcasing globalization. Manchester U Press 2006 ISBN-13: 978-0719069932.