Celtic Tiger, the Sequel

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Economic Downturn

From 2001 to 2003, Ireland’s Celtic Tiger came to a sudden stop after nearly half a decade of increasing growth. This was the result of the global economic slowdown that began in 2001. Ireland high-tech export sector suffered the most when its growth rate was nearly cut in half. This significant drop in high-tech export growth was partly due to a large decline in investment in the worldwide IT industry. The loss in IT investments lead to a stock market crash in the late 1990's, which directly impacted Ireland. Events such as September 11th and the foot and mouth disease also contributed to the economic downturn. As a result, high-spenders from Britain and the U.S. were not traveling to Ireland, which in turn hurt Irish tourism tremendously. Another reason contributing to the downturn was a loss of competitivenss that resulted from companies relocating to Eastern European and Asian countries because of wage increases. Also, the value of the Euro was rising.

Celtic Tiger, Round 2

Ireland's economy made a comeback in late 2003 and 2004 after the global economic downturn two years earlier. In fact, in 2004, Ireland's rate of growth became the highest of the 15 EU countries when it reached 4.5% [9]. This rate compares to the low rates of 1-3% that Germany, France and Itlay were experiencing at the same time. The fact that Ireland's growth was revived after the economic relapse was a huge publicity attracter, as the Irish media was quick to document the Tiger's return. The cause of this second boom is debatable, however, it is known that the construction industry was primarily responsible since it had been catching up with the demand caused by the initial boom [7]. As a result of lower interest rates and higher incomes, a real-estate boom was initiated and the construction sector added 30% more jobs to the Irish economy. The demand for real-estate was so large that Ireland, a country 15 times smaller than the U.K, constructed an impressive 80,000 new homes in 2004 whereas the U.K. constructed 160,000 [9].

Challenges

As a result of the economic advancement, Ireland's new wealth is unevenly distributed. This is, however, common for countries that experience rapid economic expansion. Most of Ireland's wealth is condensed on the east coast surrounding Dublin, one of the most expensive cities in Europe. Ireland's challenge has been to spread it's wealth more evenly throughout the country, even making sure to reach the very remote areas. In order to do this, the government has taken measures such as establishing the National Development Plan (NDP) which invests in infrastructure throughout Ireland. As a result of the uneven wealth distribution, there has been a growing gap between the rich and the poor. In an article written in 2004 called Celtic Tiger Roars Again - But Not for the Poor, citizens complain that, "all this wealth is sitting in one corner and we are sitting in the other. We feel excluded, we're not part of this great rich image." The wealth disparity is so large that the UN claimed that Ireland has the greatest level of inequality of all western countries, except the U.S. They also claimed that it has the most people at risk of poverty in the EU [8].

Description

Disposable income per person as a percentage of the national average. [7]

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• Dublin songwriter Damien Dempsey recently wrote a song called "Celtic Tiger", which proclaims the harsh reality of Ireland's new economy. An article titled Celtic Tiger Bites the Poor provides the lyrics that confess:

Now they say the Celtic Tiger in my home town/ Brings jewels and crowns, picks you up off the ground/ But the Celtic Tiger does two things/ It brings good luck or it eats you up for its supper/ It's a tale of two cities on the shamrock shore/ Please Sir can I have some more/ 'Cos if you are poor you'll be eaten for sure/And that's how I know the poor have more taste than the rich/ And that's how I know the poor have better taste than the rich...

Hear the Celtic Tiger roar -- I want more/ The fastest growing inflation rate in the world/ A couple with kids can't afford a place to live/ We're being robbed by the builders and the fat cat government/ A league of greed and they don't even need for a thing/ It's a sin but it's the nature of the beast/ You'd better go and find a priest and confess/ Because your greed is gonna leave you soulless

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