The 1960s

Following the disastrous 1950s, when 400,000 people emigrated and the population fell to 2.8 million, in 1961 Ireland applies for but is refused membership of the European Economic Community. Despite attempting self-sufficiency, Ireland is still a small country which can grow only by exporting. It remains in effect an economic colony of Britain, the destination of 75 per cent of Irish exports in 1960. But the government has begun to encourage foreign investment and in 1965 comes the Anglo-Irish Free Trade Agreement. In 1966 the population grows for the first time since the Famine. In 1967 free secondary education is introduced.

The 1970s

Ireland joins the EEC in 1973. A very mixed decade. Employment grows and emigration is reversed - over 100,000 people return to the State. But while foreign industry provides jobs, Irish industry is reeling from the shock of foreign competition and recession induced by two oil crises. The 1977 Fianna Fail government tries to spend its way to growth - with catastrophic results for the national debt. The new jobs cannot keep pace with the growth in the labour force and unemployment grows.

The 1980s

The 1982-1987 coalition government attempts to put the public finances back in balance, primarily by means of tax increases. This siphoning of demand from the economy worsens recession. As other countries begin to emerge from the worst recession of the post-war years, Ireland remains submerged. By 1986 the real GNP, the State's income, is below its 1981 level.

Over 200,000 people emigrate in this decade. The population begins to fall in the late 1980s. Employment falls. Unemployment peaks at 17 per cent of the labour force in 1987 - one person in every six is out of work.

Official statistics are, however, slow to keep up with reality - not until after the fall of the Fine Gael-Labour government is it revealed that employment had begun to grow again in 1986 by over 15,000. Despite the pervading atmosphere of despair, some of the fundamentals of the economy are beginning to come right.

1987

There is in effect a national government - Fine Gael under Alan Dukes supports the government of Charles Haughey in cutting spending. The social partners agree to wage moderation in return for tax relief and to support the government's fiscal and exchange rate policy.

International recovery helps exports. Employment remains virtually static for the next two years but there is strong job growth at last in 1989 - an unprecedented increase of nearly 50,000 in the numbers at work. These are private-sector jobs. Employment in the public sector is falling. These are still the worst years for emigration in recent memory - nearly 86,000 people leave between 1988 and 1989.

From the late 1980s European investment from the structural funds - designed to prepare Ireland for competition in the single market - maintains investment in infrastructure and education at a time of government spending stringency. Even more importantly, completion of the single market brings massive US investment into Europe - and a disproportionate amount of it goes to Ireland.

The 1990s

Following the dramatic job growth in 1989, the boom is stalled for a few years because the international economy slows. Employment growth returns strongly from the mid-1990s. There are on average close to 50,000 extra jobs each year from 1994 to 1997. In the last three years the rate of job growth doubles to an average of over 100,000 a year - more new jobs in one year than in the whole of the 1970s.

The exodus of the 1980s begins to reverse. More people return to the State than leave in 1996. Over the four years to the end of the decade a net 66,000 people return. The unemployment rate falls from 15.7 per cent of the labour force in 1993 to its current rate of around 5 per cent.

Today, over 45 per cent of employment in manufacturing is in foreign-owned firms. They account for two-thirds of output and over three-quarters of industrial exports. Irish-owned industry has also finally got over the shock of foreign competition - after the horrendous shake-out of the 1970s and 1980s. Employment in Irish-owned firms started to rise from 1988. Employment in both sectors brings spin-offs in services employment.

More people working means more people buying goods and services. And under the social partnership, people are earning more in real terms. From the mid-1990s real take-home pay is growing at its highest rate since the mid-1970s.

Car sales had declined in the early 1990s. From 1994 they take off. More spending brings even more jobs. Confidence grows, people save less and borrow more, house prices spiral upwards. More people working means fewer people on social welfare and more people paying tax. The Government's accounts go into surplus.

The electorate is capricious. Clearly the people do not believe any one government is responsible for their good fortune. The governments of the years of recovery have been, in succession: FF minority supported by FG on the economy (1987-1989); FF/PD coalition (1989-1992); FF/Labour (19921994); rainbow coalition of FG/Labour/DL (1994-1997); and FF/PD since 1997. Despite the boom, the Government continues to cut taxes. Labour shortages begin to become an issue.

2000

GROWTH continues in jobs, in wealth, in migrants returning. But niggling worries emerge: can the economy continue to grow this fast? Is all this good fortune built on sound underpinnings?

Tomorrow: Will the new jobs last?