Sunday 23 April 2017

This is the year we fight back

Editorial

Editorial

RARELY can there have been such relief at the ending of a year, and such hope invested in a new one. The past 12 months have been unremittingly grim for the Irish economy: it started with a triple hit in one week last January when Dell announced almost 2,000 job losses in Limerick, Anglo Irish Bank was nationalised and Waterford Crystal collapsed into receivership. And with each passing week the mood grew grimmer as thousands more people joined the dole queues and businesses went to the wall.

By the end of 2009, after two Budgets of exceptional harshness, there are few signs of recovery but there are many reasons to be hopeful. Internationally, there is evidence of an economic revival that will help Irish businesses to trade their way clear of recession while domestically the Government has found the courage to govern. The road ahead is far from smooth, but we have taken the first steps.

It is still far too early to talk of green shoots, or corners turned, or actual recovery, but it is not too early to hope. It is also timely to reflect on what Ireland has gained over the past decade, notwithstanding the difficulties of the past 18 months. The economic boom years gave Ireland a modern economy and an entrepreneurial culture that will help speed the recovery from recession. The excesses of the property bubble, and the unregulated banking that allowed it to bloat, cannot be allowed to eradicate from memory the great strides that this country made.

Ireland is at the forefront of the world pharmaceuticals industry, is home to a vibrant biotechnology sector and to the world's leading information technology companies. The key ingredients in our success -- a young, well-educated workforce -- are still with us, and tens of thousands of jobs have been created. We lost our competitive edge as wages and the cost of living rose too fast, but we have started to reverse that trend. It will be painful because we no longer have the luxury of a currency that can be devalued, but it will be done.

It is important that we do not lose sight of those benefits, just as it is critical that we do not repeat the mistakes that caused so much damage. While we may like to blame international forces beyond our control for the ending of the boom, the truth is more uncomfortable. Weak government, non-existent financial regulation, appalling planning and sheer complacency all played significant roles in our downfall.

Greed, too, had its place but it was the failure of successive governments to actually govern which caused the most damage. Consensus was the order of the day and that meant that problems were ignored rather than tackled. Social partnership, which had played a role in the initial economic upturn of the late-Eighties and early-Nineties, encouraged paralysis at the best of times and dangerous concessions at the worst. The banks were allowed to bloat their balance sheets without any regulatory oversight and debt levels soared across the economy.

Now, however, we have to make a clean start. There are severe challenges ahead -- not least the threat posed to recovery by the public sector trade unions -- but they can be overcome if the Government does not lose its nerve. We all have an important part to play. We need to remember what we have gained and need to believe that we have the ingenuity and determination to recover from this recession.

Confidence is essential -- for consumers and businesses alike -- and it will return if the Government provides tough, courageous leadership. December's Budget was a good start, and its implementation this year will bring the recovery closer -- 2010 will be a tough year, but it will be better than last year and it should be remembered as the year in which Ireland fought back.

Sunday Independent

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