ANALYSIS: The report is unusually frank, fascinating, revealing and accessible to the general reader

IF YOU read one report on the challenges confronting this Republic in its recovery from recession, read yesterday’s Organisation for Economic Co-operation and Development dispatch.

The opening 26-page chapter, “Assessments and Recommendations”, is as sharp an analysis as has been written anywhere.

The international agency publishes detailed reports on its 34 member countries every two years or so. The Ireland Survey, the first since November 2009, provides the analytical clarity which outsiders can bring.

The survey is comprehensive, rigorously comparative, clear and largely jargon free.

This is important as it makes it accessible to the general reader.

The heavyweight issues of balancing the budget and rebuilding the banking system are covered in detail. But the longest chapter in the report is devoted to the jobs crisis. Policy suggestions are recommended on issues ranging from restructuring Fás/Solas and teacher supervision, to corporation tax and the Croke Park agreement.

The survey speaks more plainly than agency reports conducted during the boom years, when a close reading of the documents was needed to identify criticisms. Its 2006 analysis, for instance, was withering of government inertia – but in so subtle a way that its impact was muted.

All intergovernmental organisations need to tread cautiously when subjecting member countries to scrutiny, especially when those countries are models for others and their bureaucrats have greater authority to have the OECD tone down their criticisms.

Having gone from model economy to basket case in jig time, no Irish official swaggers nowadays. Most are more amenable to constructive criticism – through either desperation or dejection – although they remain sensitive to anything construed as criticism from such an authoritative source.

Accordingly, a senior Department of Finance official was keeping a watchful eye on proceedings when the three agency authors provided a briefing in the afternoon.

The report is likely to carry more influence than in the past not only because the economy is in such a funk, but because those bailing it out are in the market for policy ideas that might make it stronger and reduce the chances of government institutions crashing it again.

As the OECD has greater expertise in analysing structural economic issues than the EU-IMF and ECB troika, aspects of the report may well be adopted by those involved in the State’s bailout, with their implementation a condition for the receipt of future rescue cash.

The three economists – from Canada, New Zealand and Portugal – in Dublin to launch the report were not as forceful in person as in print. They would not be drawn on the 2012 budget economies, beyond their cryptic statement that “more should be done”, growth permitting.

It is hard, but not impossible, to see how they can forecast the lowest rate of gross domestic product growth next year of any of the major institutions and still maintain that the budget deficit target – 8.6 per cent of GDP – can be met without going beyond the €3.6 billion budget adjustment.

Their recommendations that the ESB be broken up and that those fleecing consumers in cartels be clobbered with civil fines have been rejected by the Government. The agency was sticking to its guns on those issues.

As always, the analysis is replete with arresting comparisons.

The Irish banking crisis has been the most fiscally costly, according to one chart. At more than 40 per cent of GDP, it has exceeded Korea’s record-breaking 1990s banking bust. And that’s on top of the €60 billion bank shareholders have lost and the €10 billion burnt from junior bank bondholders.

The report also sets the scale of the arrears problem in context. Only in Greece are more people behind in loan repayments.

The longest chapter – on the jobs crisis – makes some blunt statements: “Ireland needs a coherent and integrated plan” is one; “Job search assistance has been ineffective” is another; “A review of welfare benefits is essential to make Irish social protection more coherent, incentive-compatible and simpler to administer” is yet another.

The disastrous absence of joined-up policy on getting people back to work is a failing every bit as awful as the mortgages arrears/household indebtedness/banking fiasco, if not more so. Despite this it gets a fraction of the attention.

Nevertheless, the chapter, contains solid material and intelligent recommendations.