Business will not be sorry to see the back of 2001. If ever a year came in with a bang and went out with a whimper, this was it. Three separate economic shocks knocked the Republic off the path of exceptional growth which it has followed from the second half of the last decade. In doing so, they made tangible something about the nature of the Irish economy that we have been told for years, but arguably never fully appreciated.
The very characteristics of the economy, that made it so successful, also made it exceptionally vulnerable to global economic trends. As a small state with an economic base built on exporting high-value, high-tech goods to the UK, the United States and Europe, our prosperity is a function of the health of the global economy - and this year it got very sick.
Similarly, the presence here of most of the flagship companies in the information, technology and communications sector meant that the Republic prospered as long as firms like Motorola, Gateway, Hewlett-Packard and Xerox thrived. The massive retrenchment in this sector, which began at the turn of the year, had a disproportionate impact on Ireland, resulting in the loss of hundred of jobs at Gateway and Motorola.
This crisis was quickly followed by the outbreak of foot-and-mouth disease. Shortly afterwards, observers began reassessing growth prospects for the economy, which have been scaled back on an almost monthly basis ever since.
The events of September 11th were a third shock to the economy, with immediate and dramatic consequences for companies such as Aer Lingus. The longer-term damage to the tourism industry will only become apparent in time; much will depend on how quickly people regain confidence about air travel. One crumb of comfort is that the crisis has forced the Government to try to formulate a coherent policy on airports.
As the year draws to a close, much of the brash confidence that characterised Irish business in the last few years, has gone. The last 12 months are littered with the carcasses of "new economy" companies that had big dreams but little revenues. In January, the talk was about businesses with names like Ebeon, Formus and Baltimore. The individuals behind these companies were seen as industry leaders and the massive amounts of money they stood to make were the subject of much interest and no small amount of envy.
The best of them have survived, but many have gone and their companies have either vanished with them or been restructured almost beyond recognition. The lawyers, bankers, advertising agencies and media organisations that grew fat on the back of these businesses have also felt the pain.
The concept of Ireland as a land of small shareholders did not survive 2001 either. The nightmare that was Eircom for the 550,000 small shareholders who took part in the 1999 flotation, finally came to an end. The delisting of the company earlier this month saw the passing of ownership of the State's telecommunications network into the hands of a group of US leveraged-buyout houses lead by Sir Anthony O'Reilly.
The deal passed all the regulatory hurdles in its path, but its long-term implications are not automatically benign. Valentia, the buyout vehicle led by Sir Anthony, has taken on around €2 billion in debt to complete the transaction and it will have to be serviced, potentially at the expense of investment in areas such as broadband. This will be a matter of no small importance given the significance of the telecommunication infrastructure to Ireland's future as a high-tech hub.
The deal has also seen the staff of Eircom increase their stake through the Eircom Employee Shareownership Trust(ESOT). But if Eircom comes under pressure to shed jobs, any fault lines in the untested relationship between the ESOT and its fellow shareholders, will be exposed.
The general level of uncertainty surrounding the economy is reflected in the failure of economic forecasters to reach a consensus on how it will perform next year. Economic growth could be as low as 1.5 per cent or as high as 7 per cent, depending on which economist you listen to.
There is agreement that the recovery will hinge on a bounce in the US economy which is predicted to occur any time from Spring onwards. Once again, the openness of our economy implies that we will very quickly see a revival in our own economic fortunes once the world's largest economy - and the second largest market for our goods - turns the corner.
The hope must be that many companies will choose to maintain their workforces at current levels rather than go through the inefficient process of laying them off only to rehire them when things pick-up. But if the recovery is delayed, many businesses will be forced to let workers go. The jobs most under threat will be in Irish-owned manufacturing companies. This could further damage consumer and business confidence and could seriously affect spending and investment.
If the recovery does arrive on time, the chances are, that by the end of 2002 we will have returned to what is seen as the economy's long-term sustainable growth rate of 5 per cent. It would be a long way short of what business has been used to over the past few years. But it would still be the envy of Europe.