Ireland - Economic development



Government policies are premised on private enterprise as a predominant factor in the economy. Specific economic programs adopted in recent decades have attempted to increase efficiency in agriculture and industry, stimulate new export industries, create employment opportunities for labor leaving the agricultural sector, and reduce unemployment and net emigration. In pursuit of these objectives, the government provides aids to industry through the Industrial Development Authority (IDA), the Industrial Credit Co., and other agencies. Tax concessions, information, and advisory services are also provided.

The IDA seeks to attract foreign investment by offering a 10% maximum corporation tax rate for manufacturing and certain service industries, generous tax-free grants for staff training, ready-built factories on modern industrial estates, accelerated depreciation, export-risk guarantee programs, and other financial inducements. IDA also administers industrial estates at Waterford and Galway. The Shannon Free Airport Development Co., another government-sponsored entity, administers an industrial estate on the fringes of Shannon Airport, a location that benefits from proximity to the airport's duty-free facilities. A third entity, Udaras Na Gaeltachia, promotes investment and development in western areas where Irish is the predominant language. As of 1986 there were some 900 foreign-owned plants in Ireland.

Price control legislation was introduced under the Prices Act of 1958, amended in 1965 and 1972. In general, manufacturers, service industries, and professions are required to obtain permission from the Ministry of Commerce and Trade for any increase. Price changes are monitored by a National Prices Commission, established in 1971. The economic plan for 1983– 1987, called The Way Forward, aimed at improving the cost-competitiveness of the economy by cutting government expenditures and restraining the growth of public service pay, among other measures. The 1987–1990 Program for National Recovery is generally credited with creating the conditions to bring government spending and the national debt under control. The 1991–1993 Program for Economic and Social Progress was to further reduce the national debt and budget deficit and to establish a schedule of wage increases.

A 1994–1999 national development plan called for investment of £20 billion and aimed to achieve an average annual GDP growth rate of 3.5%. The government hoped to create 200,000 jobs through this plan, with funding by the state, the EU, and the private sector. Half of the money was earmarked for industry, transport, training, and energy.

At the end of the 1990s, Ireland boasted the fasted growing economy in EU with a 9.5% GDP real growth rate in 1998. Total expenditures on imports and exports in 2000 were equivalent to 175% of GDP, far ahead of the EU average, which made Ireland's economy one of the most open in the world. Ireland became known as the "Celtic Tiger," to compare with the formerly fast-growing economies of East Asia prior to the Asian financial crisis of 1997. In 2000, the economy grew by 11.5%, the highest growth rate ever recorded in an OECD member country. Wage inequality has grown, however, and spending on infrastructure has failed to keep pace with social or industrial demands. Corporate taxes were as low as 12.5% in some circumstances in the early 2000s. Economic growth decelerated rapidly in 2001, to 6%. Inflation fell as did housing prices, but they rose again in 2002. Tax increases were expected in 2003 and 2004, and the government was facing pressures to cut spending. GDP growth was forecast for 3% in 2003 and 3.8% in 2004.

User Contributions:

1
Stephen
Report this comment as inappropriate
Apr 25, 2011 @ 11:11 am
I was wondering if you could tell me when this was published, and who-if there was anyone-was responsible for this article.

Comment about this article, ask questions, or add new information about this topic: