MUCH of Ireland's economic growth in recent years is due to the success of economic policies opted by various Governments since the 1980s, with a little help from EU funds, according to The Economist.
In its latest issue, the magazine gives an upbeat assessment of the performance of the Irish economy, which just 10 years ago, its says, was among the poorest in Europe.
"On the face of it, this is one of the most remarkable economic transformations of recent times: from basket case to emerald tiger in 10 years," according to The Economist.
Government borrowing was so badly out of control in the 10 years to 1987 that public debt soared from 65 per cent of national income to nearly 120 per cent, a rate only exceeded in Europe by Belgium. Now, it states, Ireland's borrowing has fallen to almost nothing and it is one of the few EU states eligible to participate in Economic and Monetary Union in 1999.
Though some critics have said this has all been done with "smoke, mirrors and money from Brussels", the magazine insists that there is little truth in the accusation. It highlights the vast amount of foreign investment which has poured into the Irish economy, particularly in the electronics and financial services sector, over the past 10 years.
The magazine cites the highly educated young workforce as one of the economy's main assets, giving domestic and international firms competitive strength.
The 10 per cent tax rate on manufacturing and internationally traded services has also been a worthwhile undertaking, it asserts. The continuous flow of international projects into the economy can be partly explained by the matter of "success breeding success", with other firms looking to imitate the success of their competitors in the Irish economy.
Ireland, it said, has developed a "self sustained cluster" of related firms which creates a sufficient supply of services and suitably skilled workers to support this growth.
"How much longer the Irish formula will deliver such striking success is difficult to say. An optimist, taking the view that Government policy has been instrumental, would note that little change is likely." The main political parties contesting the general election, it says, have pledged to keep things much as they are.
Pessimists, it cautions, would emphasise the economy's extreme dependence on relatively few industries. "A global contraction in computers or financial services, for instance, would hit very, hard. They might ask how, and how soon, Ireland's new status as a rich member of the EU will affect the terms of its membership, so advantageous up to now," according to report.
IRELAND has grown quickly for more than 30 years, its states, because it had a lot of catching up to do, and because policy and circumstances conspired to let it happen. "Success of that kind, impressive and unusual though it may he, contains the seeds of its own demise. Now that incomes stand close to the European average, the opportunities for further rapid growth have diminished."
It also suggests that Ireland's labour cost advantage has now narrowed and it is no longer so clear which industries offer the best chance of growth in the future.
"That is the trouble with economic maturity. If Ireland has another decade as successful as the last one, it will be a miracle economy indeed."
