• Text size      
  • Send this article to a friend
  • Print this article

The Celtic tiger may yet turn on its master

Seamus Heaney fears that old Ireland is in danger of losing its soul, of driving a stake through its sacred heart. Which is to say that the 1995 Nobel laureate is upset, very upset, about a motorway. His protest is typically rhapsodic and not calculated to appeal, perhaps, to politicians, planners and civil engineers, but that does not render it invalid. The poet has joined a growing number of people who believe that Ireland's economic boom has come at too high a price. Yet he speaks out, ironically enough, just as Alex Salmond is encouraging the Scots to emulate the "independence and prosperity" of the Irish.

Seamus Heaney fears that old Ireland is in danger of losing its soul, of driving a stake through its sacred heart. Which is to say that the 1995 Nobel laureate is upset, very upset, about a motorway.

Loading article content

His protest is typically rhapsodic and not calculated to appeal, perhaps, to politicians, planners and civil engineers, but that does not render it invalid. The poet has joined a growing number of people who believe that Ireland's economic boom has come at too high a price. Yet he speaks out, ironically enough, just as Alex Salmond is encouraging the Scots to emulate the "independence and prosperity" of the Irish.

According to Heaney, the Celtic tiger "is now lashing its tail and smashing its way through the harp - the strings of the harp are being lashed by the tail of the tiger". Specifically, he is outraged by a plan to run the M3 motorway through Tara, the ancient seat of Ireland's high kings.

Archaeologists and conservationists take much the same view of a site ranked among the world's 100 most endangered monuments. Tara is compared routinely to Stonehenge, Delphi and Canterbury, a place precious to Christians and pagans alike. For Heaney, it is a symbol. For a government long concerned by an inadequate transport infrastructure, Tara represents the quickest solution to the hellish problems faced by Dublin's commuters.

The poet charges that the politicians have made a "savage choice" from "secular motives". Tara is an "ideal of the spirit", the physical representation of a "sense of belonging". In other words, the place represents what it means to be Irish.

Some might say the same, though perhaps not publicly, about the M3. Tara was Tara when Ireland was being bled by emigration, unemployment and decades of economic failure. Tara was Tara, ancient and sacred, when the republic was ranked as one of Europe's poorest countries.

These days, by the usual calculations, and as Mr Salmond never forgets, Ireland ranks as the third-richest economy in the world after Norway and Luxembourg. Thanks to the 1987 National Economic Plan, a "partnership agreement" between government, business and unions, EU subventions, and overseas direct investment (generally American) there has been breakneck growth. The story is well known. With a growing population and corporation tax at 12.5% - another enticement to the SNP - Irish GDP growth has topped 4% in every year since 1993.

There is, though, another story, one that is no secret to anyone who has been paying attention or, for Scottish purposes, failing to turn a blind eye. This tells of a country with the highest levels of inequality in the world outside the US, according to the United Nations. This is a country in which one in five is classed as poor (earning less than 60% of the average wage), and in which one child in 10 lives in "consistent poverty".

Ireland is the country, too, whose health service is deplored by its citizens, a country where drug use and violent crime have increased rapidly, and where, in Dublin at least, three in four parents feel the need to pay for extra tuition to supplement the education system. If the economy is a tiger, meanwhile - and the GDP growth figures are not in serious doubt - it might also count as an endangered species.

Inhabiting the eurozone, Ireland must contend with a hawkish, inflexible European Central Bank. It must deal, and is already struggling to deal, with a rapidly deflating property bubble and the vagaries of variable interest rates. There is paper wealth aplenty in Dublin 4 and the coastal mansions: the average price of a property in the capital is £304,000. But this means two things: unaffordability for ordinary earners - homelessness continues to increase - and a dangerous dependence, throughout the economy, on the housing market.

Houses are still being built. In fact, by one estimate there are 25,000 more homes currently under construction than the market can bear as credit dries up. This would be tricky at the best of times. But one in eight Irish workers, from a labour force of two million, is employed in the construction industry. The generally accepted prediction is that Ireland's property-dependent growth will fall from slightly less than 5% to 2% in the year ahead.

"Growth" can be an odd concept, in any case. Foreigners still flood to Dublin (I've made the trip myself) to be briefed by affable diplomats and economists on the low-tax environment that has secured those enviable records of inward investment and lured returning emigres and immigrants alike. Visitors are keen, understandably, to hear how the miracle has been achieved. Optimists are persuaded that once the problems of rapid growth and the property bubble have been resolved, Ireland's economic virtue will be permanent.

Perhaps so. As in Britain, inequality and poverty are not yet issues to break governments. Even given a lack of investment in health, education and welfare, Ireland is certainly more prosperous than ever before. And what would Scotland not give, with its own educated, English-speaking workforce, to attract the Microsofts, Googles, NCRs, Oracles, Pfizers, Dells, Apples and Intels? Mr Salmond points us in that direction.

These firms create large profits and pay fairly substantial taxes (albeit set at a competitive rate) to the Irish government. But critics of the Irish Tiger model make a serious point. There is a big difference, they say, between economic activity within Ireland and profits being booked in Ireland. The latter certainly inflate GDP, but they are profits coming in, for the sake of those low corporate taxes, which leave no sooner than they arrive.

If the benefits were substantial, and if those famous GDP figures were reliable, Ireland would find itself in a tax war as other European economies joined the scramble to the bottom.

Cutting corporation tax as the Irish have done remains one of Mr Salmond's ambitions, nevertheless. Attracting inward investment, or even a golf resort, is an SNP priority. But Ireland's example tends to show that, sometimes, prosperity can be more apparent than real, especially when your economy is disfigured by an unsustainable property bubble.

The Celtic tiger is worth study, though. It was born out of desperation and economic catastrophe: something had to be done. Whether the right thing was done, and whether the price was worth paying, remains to be seen. A whiff of corruption and a hint of the cavalier, particularly in the matter of planning controls, still hangs over the Irish miracle.

But if a property market failure - with 270,000 construction jobs at stake - leads to negative equity and mass unemployment during a global recession, the Irish beast may seem a little less glamorous. Close study need not imply unthinking imitation, in any case, and nor should it, on the evidence. Yet you would not guess as much when Mr Salmond connects independence with the "arc of prosperity" across northern Europe, and when he holds up Ireland as an exemplar. Best stick to Norway, for now.

I doubt that Seamus Heaney pays much attention to GDP figures. When he complains about Tara and the M3 he is, instead, invoking a nation's identity. That, too, is supposed to be SNP territory. So are identity and nationhood ever secured in a mere tax auction?

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

PARCH1.875848