News Colette Browne

Tuesday 16 September 2014

Why allow the harsh economic reality get in the way of a good myth?

Colette Brown

Published 19/03/2014 | 02:30

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"The unapologetic capitalists at Forbes, never ones to look an unlikely gift-horse in the mouth, managed to depict our unemployment crisis as a massive boon for business."
"The unapologetic capitalists at Forbes, never ones to look an unlikely gift-horse in the mouth, managed to depict our unemployment crisis as a massive boon for business."

It's all very well accentuating the positives about Ireland in honour of the marketing bonanza that is St Patrick's Day, but myths are in danger of replacing reality.

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The Irish, a great bunch of lads, was the central message of a video – St Patrick's Day 2014 #IrelandInspires – released by Failte Ireland and the Department of Foreign Affairs and Trade last week.

Depicting an Ireland in which it never rains, the feelgood video contains images of freckle-faced children, comely cailins, rolling hills and rugged coastlines over which a number of positive statements about Ireland's achievements are emblazoned.

Already at nearly one million views, the video has been a hit online, but, lest you believe the hype, some of the claims made in the 'animated postcard' require some qualification.

First, the triumphant declaration that Ireland is the "first eurozone country to successfully exit an economic assistance programme".

Regrettably, there was no room in a promotional video of such unrelenting positivity to consider that while we've exited the bailout we've been lumbered with approximately €64bn in banking debt. Ireland is now one of the most indebted countries in the world, with a debt-to-GDP ratio of over 120pc last year.

In fact, Ireland has the fourth largest debt-to-GDP ratio in the EU, after Greece, Italy and Portugal, but unlike those countries, a sizeable chunk of our national debt, one third, can be directly attributed to the bailout of our banks.

While Ireland comprises just 0.9pc of the EU population, and the Irish economy makes up just 1.2pc of the EU's GDP, the Irish people have paid 42pc of the total cost of the EU banking crisis.

This massive transfer of wealth, from citizens to financial institutions, has cost every man, woman and child in the country nearly €9,000, compared to an average of €192 per capita elsewhere in Europe.

How's that for an inspiring statistic?

Not content with letting insolvent banks know that we're an easy mark, the video next proclaims that Ireland has been named the best country in the world to do business.

This is according to Forbes, which last year said our "low tax burden, investor protection and personal freedom" were the reasons we got top billing.

However, also in the report were a number of uncomfortable truths that the Government won't be so eager to highlight.

Part of the reason our economy is now so competitive, according to Forbes, is because nominal wages fell 17pc between 2008 and 2011, which helps "keep labor costs in check".

Furthermore, the unapologetic capitalists at Forbes, never ones to look an unlikely gift-horse in the mouth, managed to depict our unemployment crisis as a massive boon for business.

"Unemployment remains stubbornly high – a recent 12.8pc – providing companies a large labour pool to pick from," it said.

So, a large part of the reason we're such an attractive destination for business is because wages have been decimated and hundreds of thousands of desperate people have lost their jobs. Hurrah!

Elsewhere, the viral video highlights the fact that Ireland has the youngest workforce in the EU.

What it doesn't tell you is that we also have one of the highest youth unemployment rates, at nearly 30pc, despite the fact that last year nearly 35,000 people in this age bracket, 15-24, emigrated.

Nobody expects a tourism video full of images of ghost estates, dole queues, homeless families, patients on trolleys or planes stuffed full of departing emigrants.

However, the self-serving spin that routinely comes from the Government, when assessing its own achievements in office, is often little more than PR puffery that, if subjected to advertising standards, would be deemed grossly misleading.

For example, government ministers gloss over negative news, like the fall in GDP in the last quarter of last year, and instead wax lyrical about the fall in unemployment, of nearly 75,000 since 2011, at every available opportunity.

Examining the figures, economist Michael Taft has demonstrated that, in the same period, the total number of working age people emigrating and entering labour activation measures, like JobBridge, exceeded 145,000 – nearly twice that number.

Governing in Ireland is about more than merely implementing policies, it's about convincing people that those policies are working and videos like #irelandinspires help sell that message.

By all means enjoy this uplifting schmaltz – just don't be fooled into thinking that's the whole story.

Irish Independent

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