If economic growth projections used during the election campaign are to be met, we must recruit another 190,000 workers from abroad and should plan for the infrastructural and social pressures this will cause, argues Cathal O'Loghlin.
One of RTÉ's recent election specials was about migration. The issue, it was suggested, was being avoided in election debate - lest anyone raising it be classed a bigot or worse.
Wide-ranging though the programme was, it did not offer a view about how much immigration we might experience over the period ahead. Unless we make some serious estimate of the probable extent of future immigration, we are unlikely to be motivated to invest the necessary effort in planning how best to harness its benefits - and meet its challenges.
With the election behind us, perhaps it's now time to address the issue. The mid-range, pre-election estimate for economic growth was 4.5 per cent. This is a useful starting point from which to calculate potential future immigration.
At its simplest, economic growth is a product of changes in numbers at work and in output per person at work (productivity). The 4.5 per cent growth prognosis foresaw output per worker improving up by 2 per cent annually, and numbers employed rising by 2.5 per cent.
Is the productivity bit of this breakdown realistic? Over the last 10 years - measured in terms of gross national income per person at work - our productivity growth averaged 2.2 per cent, but on a declining trend. This mirrors international experience.
As economies mature, productivity tends to rise at a slower pace. None of the larger economies (the G7 so-called group of seven major world economies) and very few of the smaller 15 member states of the European Union economies, did nearly so well over the same period - with only Sweden and Finland matching Irish performance.
All in all, therefore, while there is some downside risk, 2 per cent growth in output per worker seems plausible. The pre-election assumption that employment must rise by 2.5 per cent if the economy is to grow by 4.5 per cent, therefore, seems reasonable. However, unless official sources are completely mistaken, this cannot occur without very substantial further immigration. Our existing population simply will not produce the necessary workforce.
According to the Central Statistics Office, there were 2.039 million people at work in 2006. Last December's Budget forecast a 3.5 per cent increase in jobs in 2007, indicating that total employment this year should approximate 2.109 million. If Irish employment were to rise by 2.5 per cent out to 2012, we would then have 2.386 million at work - 277,000 more than the forecast for this year.
The Central Statistics Office produced Population and Labour Force Projections 2006-2036 late in 2004. The accompanying table, drawn from this publication, shows the CSO-estimated population and labour force changes which would occur between 2006 and 2011 (a good proxy for potential developments over the period 2007 to 2012) if there were (a) 30,000 and (b) 20,000 net immigration annually.
Comparison of the two estimates provides an official projection of how our population and labour force would develop if there were no net migration into (or out of) Ireland. The table is based on the central demographic assumptions used in the CSO publication.
The projections indicate that, if there were no migration over the coming five years, our population would increase by about 165,000 and our labour force by about 91,000. With unemployment remaining at today's 4.4 per cent, this means that our existing population can support the creation of only 87,000 extra jobs between now and 2012.
Thus, to achieve a 4.5 per cent economic growth rate over the next five years, we need about 190,000 new workers to come here from abroad.
The CSO tells us that net immigration of 10,000 annually will support creation of 32,000 extra jobs over five years. The implied migrant inflow to sustain economic growth at 4.5 per cent, therefore, is in the region of 59,000 annually - significantly above the 48,000 annual inflow over the four years up to Census 2006.
Our overall population would grow by 300,000-plus as a result, reaching 4.77 million or so by 2012. One-sixth of our labour force, and one-seventh of our total population, would then be of non-national origin. Serious overstatement?
Census 2006 provides a more up-to-date picture of migration patterns than was available to the CSO in 2004. While it suggests that a lower (54,000) annual migrant inflow could be sufficient to support the same pace of economic growth, it confirms the broad accuracy of earlier estimates.
Immigration at this level would contribute to a beneficial decline in our dependency ratio. It should deepen the adaptability of the workforce and in this way strengthen future growth prospects. It could be expected to assist the growth process, also, by broadening our skills base and strengthening investment and trade linkages.
And, if past Irish experience is any guide, it would aid the development of migrants' home countries, both financially and by enhancing the skills and enterprise of the migrants themselves - to be harnessed subsequently to their own countries' betterment.
But it would present significant challenges. Considerable development of key (eg education) services would be required to meet the more diverse needs of an increasingly multicultural society.
So, also, would an intensified effort to improve our straining physical infrastructure. And integration of the new arrivals into the fabric of Irish society - while enabling them to preserve in full the richnesses of their own cultures - would be vital.
Of course, we may not see sustained growth of 4.5 per cent. But, if we aspire to such progress, we need to prepare well for the social and other challenges of its associated substantial migration.
• Cathal O'Loghlinis a former assistant secretary of the Department of Finance and member of the IMF executive board charles@ologhlin.com