The Transformation of Ireland: Economic-Cultural Boom in the 1990s

Pages: 7 (2509 words) Published: April 19, 2009
The “New Ireland” emerged in the 1990s’ when the country experienced an economic-cultural boom in which it was transformed from one of Europe's poorer countries into one of its wealthiest. In the 1990s the socioeconomic prosperity that spread across the country found its origins in the evolution from a subsistence economy to a market economy. It was at the end of the 1950s when the Irish economy moved its first steps in condition of normal political stability and, new polices and plans were introduced and implemented to transform an Ireland that based her economy on rural and agriculture industries, to a country able to create high standard of living, consumer goods, and economic opportunities as well as the rest of Europe. The real turning point for an economic policy focused on productivity came from Sean Lemass, the economic architect of modern Ireland, who during his mandates as minister for Industry & Commerce tried to move away from the protectionist policies that had been in place since the 1930s towards international trade and commerce. He focused his programme on foreign investment, tax breaks and grants that were provided to foreign firms wishing to set up a company in Ireland, this would have contributed to create economic prosperity in the country and reduce the big problem of unemployment. Following the introduction of this programme, employment fell by a third; at the end of the 1960s, 350 foreign companies had settled in Ireland starting what we can call the industrial colonization and, by employing the 25% of the industrial labour work in the country, emigration reduced considerably and the population grew for the first time since the Famine. A second Programme for Economic Expansion was launched in 1963, with a focus on growth industries that could create long run effects for the Irish economy. The main industries targeted were: Health care, pharmaceuticals and chemicals; Electronics and engineering; Financial services and telemarketing; Software, data-processing and international services; in addition to that the Irish government provided an export subsidy policy so that Ireland developed itself into a strong international trade country establishing as the largest exporter of software-related goods and services in the world along with organic chemicals, electronic & telecommunication equipment and pharmaceutical products. Export played a fundamental role in the state's robust growth, but the economy also benefited from the accompanying rise in consumer spending, construction, and business investment. In 2003 overseas companies accounted for 51% of Ireland’s exports & generated more than €14 Billion of expenditure in the economy, directly employing nearly 140 000 people. The increasing of FDI (foreign direct investment), ensured the diversification of Irish exports into European markets, reducing the dependence on Britain so that a greater volume of exports went to European Community countries rather than UK; the total Irish trade went from 58% of GNP in 1960 to 105% of GNP in 1987. During the rapid process of industrialization the contribution of different sectors to GNP changed significantly, the gains in industrial employment were the results of the losses in the numbers employed in agriculture: in the 1960 the 23% of the GNP was given by agriculture while in 1987, it fell down to 10.5%. Social and cultural changes were to come in addition to the development of a new economy. In January 1973 Ireland joined the European Community and faced a transition that involved the foreclosure of farms that could no longer produce economically viable goods able to compete in the European market with a consequent change in the distribution of the population in the country following the route of other Western industrialized societies where the rural population were forced to make the transition from tradition farming to modern capitalism. According to Timothy J. White: “Capitalism has crept into the countryside as new...

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