August 7, 2007

BACK IN THE DAY...:

Ireland an economic role model (Andres Oppenheimer, Hacer)

A news item buried in The Miami Herald's business pages earlier this week saying that the Irish have become Europe's wealthiest people should become a mandatory history lesson in all Latin American schools and be posted on the walls of government offices throughout the region.

What does that news story have to do with Latin America, you may ask yourself. Well, a lot. Tiny Ireland could be a phenomenal role model -- and morale booster -- for most countries in the region.

Like most Latin American countries, Ireland was until very recently a poverty-ridden, agricultural, soccer-loving, Roman Catholic country best known for having a sizable part of its population living abroad and an economy that was heavily dependent on family remittances from its migrants in the United States.

By some standards, Ireland was even poorer than most Latin American countries. The Great Irish Famine of 1846 left about one million dead. Until as recently as the early 1990s, Ireland was still one of Europe's poorest countries, and the Irish were often stereotyped as the British people's poor cousins. Like in many parts of Latin America, the most common joke in Ireland was, ``Would the last person to leave the country please turn off the lights?''

Ireland was also largely known abroad for producing great writers, performers and sports stars, but very few successes in the business, science or technology worlds. This should sound familiar to many Latin Americans.

Yet in less than 15 years, which amounts to virtually nothing in a country's history, Ireland has become the richest country in the 27-nation European Union in terms of average wealth.

According to the report released Monday by the Bank of Ireland, the average individual net wealth of Ireland's 4.2 million population rose by 19 percent to $268,000 last year. Income from Ireland's technology export boom was further boosted by a huge rise in property prices and high savings rates, the bank said.


...the Irish were one of the prior groups the nativists claimed could never learn the Anglo-American ropes.

Posted by Orrin Judd at August 7, 2007 8:34 PM
Comments

Yup. All they had to do was give up being Catholic to do it.

Wonderful trade. Do you think they'll get Wales next?

Posted by: Chris at August 7, 2007 11:54 PM

I always was ahead of my time.

Posted by: John DeLorean at August 8, 2007 6:12 AM

Either the author is being disingenuous or he really hasn't a clue as to why Ireland went from rags to riches. I'll give him a hint, it ain't redistribution of income or financial aid from the EU, it was a well educated, law abiding citizenry and old fashioned capitalism. Can Latin America follow suit? No reason they can't, but first they need to get their people educated, stop the wholesale corruption that's crippled them since the year dot, and provide a reasonably safe environment for investors to risk their funds.

My son-in-law, who is leaving for Rio next week, was told by colleagues who live and work there not to bring his wife and daughter with him for a vacation because it wasn't safe. His company is thinking of investing major dollars, but why would they put them in Brazil when Brazilians can't even make their financial and tourist areas safe.

Posted by: erp at August 8, 2007 6:42 AM

It's no coincidence that Ireland has as high a score as America on the religious vector of the World Values Index. It's their Catholicism that's saved them.

Posted by: oj at August 8, 2007 7:19 AM

Catholicism is rampant in Latin America too.

Posted by: erp at August 8, 2007 7:39 AM

erp, I just read the article, and the author clearly places the reasons for Ireland's success on other reasons than the EU funds - especially the tax reforms.

Ireland also benefitted from speaking English and being a low wage, but highly educated country. Companies saw it as a good place to put their EU operations once the single market became a reality. These were important factors that Latin America won't have. Neither did Ireland have the entrenched poverty like the favelas in Brazil.

So while Ireland does have good lessons, we should not expect the same success.

Latin America, as a region, will only slowly raise itself up. Several improving countries will serve to anchor reform in the region and be seen as role models - Chile, Costa Rica, and possibly later Panama and Mexico. At some point they will reach a level of development where their success will shame others into emulation, and they'll have capital of their own to invest in their neighbors.

Posted by: Chris Durnell at August 8, 2007 10:34 AM

Ireland was always been a Catholic country with well educated people who spoke English, but they were nevertheless impoverished. It was only when they started to look to themselves for prosperity that it started to happen for them.

In today's world, any Latin American country could institute reforms that would take them into the 21st century. I had high hopes for Costa Rica, but things don't seem to be happening.

There's a large Brazilian community here. They are hardworking and ambitious. They love their country, but say the corruption is so pervasive, there is no way to beat it and one of things that surprised them the most is that we are honest and don't steal from each other.

Quite an endorsement.

Posted by: erp at August 8, 2007 12:32 PM

Going from poor to rich has been a strange experience for Ireland. For a start violence has ended - hard to be a terrorist when your house is worth $400,000 (and the terrorism was pointless to begin with). Also the country is flooded with immigrants - which feels unusual in a country which was so homogenous

Posted by: mike at August 8, 2007 3:59 PM
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