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The price of the economic miracle: What are the booms and the worries in Ireland?
From the mid-1990s to the late 2000s, Ireland experienced an economic miracle known as the "Celtic Tiger", during which the country rose rapidly with an annual growth rate of more than 9%. However, with the arrival of the economic peak and the subsequent real estate bubble, Ireland also faces the deep concern of economic recession. Today, when people look back on this history, many questions arise: What was the real cost of this prosperity?
"This whole Irish episode will become an international study in how not to behave."
Ireland's rapid economic growth began in 1991, when the country was still a relatively weak performer in Western Europe. However, with a surge in foreign direct investment, especially from high-tech companies in the United States, the Irish economy began to swell. Many factors have contributed to this miracle: the government's low tax policy, social partnership, and continued investment in education.
The government's low corporate tax rate has attracted many international companies to move in. This strategy is considered one of the main factors in attracting foreign investment. Since joining the EU in 1973, Ireland has received over €17 billion in EU structural and cohesion funds for investment in improving its education system and infrastructure.
"Ireland's original wealth lies in its ability to provide an attractive business environment for high-tech companies."
However, as the economy grew, the bubble in the real estate market became increasingly apparent. From 2000 to 2006, housing prices doubled, and the huge construction investment caused many experts to worry about the future market. Economists generally believe that when the real estate market collapses, Ireland's economy will inevitably face huge challenges.
Since 2008, Ireland's economy has fallen into recession, with GDP falling by 14% that year and the unemployment rate soaring to 14%. Comparing this period with the prosperity of the early years, the widening gap between the rich and the poor in society has become a hidden concern that cannot be ignored. According to the Economic and Social Research Institute, budgets over the past 20 years have favoured high-income groups and provided insufficient support to low-income groups.
“During periods of very high growth, budget allocations tend to favor high-income groups over low-income earners.”
The "Celtic Tiger" period has been subject to constant criticism from economists and commentators, particularly of government policy in the housing sector. Ireland's development has, in a sense, been the product of a misalignment of investment and policy. The post-2020 recovery still faces many challenges, one of which is how to re-establish support for local industries.
As Ireland's economy recovers again, the housing market will continue to face great pressure. Will the lessons of the past affect the future development path? In this process, policymakers need to carefully consider issues such as continued international competition, changes in the external economic environment, and the long-term sustainability of the social economy.
From the current situation, the prosperity and worries of the Celtic Tiger still plague this land. In the future, whether Ireland can rationally learn from the lessons of the past and find a balance between prosperity and crisis has become the focus of attention. How should we understand and face such challenges?
