DUBLIN — While researching folk beliefs in Ireland in the early 20th century, an American anthropologist asked an elderly woman if she believed in fairies.
“No, I do not, sir,” came the seemingly decisive reply. End of story? Not a chance.
“However, they are there anyway,” the lady continued, perhaps wryly trying to make fun of her overly-earnest interlocutor.
This well known anecdote might in fact be apocryphal, and though the supernatural is long gone from Irish popular culture, there is a mystical tinge to the country’s recent economic boom-to-bust saga.
From the mid-1990s to 2007, Ireland’s economic growth changed a nation of emigrants into one where around 10 percent of the population were recently arrived immigrants, many from Eastern Europe. Growth ranged from 5-10 percent over a 15-year period and Ireland acquired the “Celtic Tiger” moniker after a Morgan Stanley economist compared the transformation of the North Atlantic island with the Asian Tiger economies of South Korea, Singapore and Taiwan.
Since 2008, however, Ireland’s GDP has contracted by 14 percent and its unemployment rate is now around the same percentage.
One Asian country that was never close to joining the Tiger ranks was Burma. The country’s military rulers are known for their attachment to bizarre economic thinking, some of it apparently based on numerology or other esoteric notions.
In 1987, former dictator Gen Ne Win introduced 45-kyat and 90-kyat banknotes—multiples of his lucky number 9—which caused chaos in the economy. In 2005, the current dictator, Snr-Gen Than Shwe, ordered farmers across the country to grow jatropha, or physic nut, from which biofuels are harnessed.
However, locals speculate that Than Shwe’s seeming obsession with this plant was not just about meeting Burma’s energy needs. In Burmese, the word for jatropha reads like an inversion of Suu Kyi, giving it, according to the logic of the occult, the power to counter the influence of the country’s detained pro-democracy figurehead, Aung San Suu Kyi.
“Voodoo economics” was how George H. W. Bush described the policies of rival Ronald Reagan during the contest for the 1980 Republican nomination in the United States. While debating the pros and cons of Reaganomics is for another day, Bush was onto something with his attack on economic ideology and how unthinking policymakers parrot slogans as if the words can be made cash.
During the 1990s and 2000s, economic commentators waxed lyrical about the stewards of the Irish economy, sharpening the sense of invulnerability that surrounded the country’s new-found wealth.
While never turning to anything like the lurid occultism of Burma’s ruling junta, Ireland’s leaders parroted soundbites about the “smart economy” and, more recently, “turning the corner.”
All these mantras were repeated ad nauseum as lawmakers fooled themselves and the public into thinking that the boom —which became a property bubble by the early 2000s — would last indefinitely and was based on sound economic principles.
This was a less comical version, perhaps, of Burma’s former prime minister, Gen. Khin Nyunt, dressing as a woman and barking out arcane chants to undermine Suu Kyi’s “powers.”
It is important, of course, not to overdo the comparison. Despite its vast natural resources, Burma remains a poor country in terms of the average standard of living, with a GDP per capita of US $1,100.
At the height of the boom, the same statistics read $43,800 in Ireland, now down to $37,700. Ireland’s low corporation tax makes it an attractive gateway to the European Union for American multinationals such as Dell, Google, Intel, as well as a still murky group of Chinese investors who want to build a giant industrial park in the country to access the EU market.
Despite the recession, Ireland’s high-tech, export-oriented sectors continue to prosper, showing that if the country can purge the effects of builder/banker bubble, there is a thriving real economy there to work with.
Politically, Burma is a military dictatorship in the process of finalizing a faux transition to fake democracy. Ireland has a free, if flawed press (which failed, notably, to look into the overheating economy) and the country has had a parliamentary democracy since gaining independence in 1921.
Memorably, former Taoiseach (Prime Minister) Bertie Ahern told the small group of economists and pundits who warned during the boom years that a collapse was possible to “go away and commit suicide.” Harsh words, which in retrospect make the former PM look foolish and petty, but mild in comparison to the real fate of critics of government in Burma, where there are over 2,100 political prisoners.
While Ireland’s boom benefitted most of the country, the oligarchy of politicians, bankers, builders, property developers—aided by greedy financiers from the UK, Germany and France—caused the crash with reckless lending and an overheated housing sector. Now, an IMF/EU loan of €85 billion ($112.5 billion) is being forced on the Irish people so the bills incurred by this cabal can be repaid, saddling the country with multi-generational debt.
Ireland’s beleaguered leaders have resorted to more mantras—about “restoring stability” and “regaining confidence” as a prelude to “revived growth”—to justify the debt, which looks more about appeasing the international money markets and ensuring that the bankers and bondholders in Ireland and abroad do not suffer the losses they should.
The incantations have not had the desired effect, however, with credit-rating agencies such as Moody’s making the cost of Irish government borrowing higher internationally, even as the government undertakes the measures which the IMF and the EU say will work to “restore confidence” in Ireland.
If Spain or Italy suffer an economic collapse similar to that of Ireland, the future of the euro as a currency will be in jeopardy. As such, the EU/IMF bailout for Ireland is more about saving the euro than it is about Ireland undertaking its own reforms.
Such disingenuousness should be no surprise, however. An attempt to foist an EU Constitution on the people of Europe was defeated in referendums in France and Holland in 2005. Not to be deterred by such trivialities as the will of the people, political elites in Europe had the document repackaged as the Lisbon Treaty, getting around the need for a vote in France and Holland.
However, this was in turn dismissed by Irish voters—against the wishes of the country’s political elite—in a 2008 referendum in Ireland.
“Wrong answer,” said the same Irish political class that oversaw the boom-to-bust collapse and, in the midst of an ongoing recession in 2009, had the Lisbon Treaty passed in a re-run of the 2008 vote.
The Lisbon Treaty needed ratification in every EU member-state to come into force, and with their economy in tatters, Irish voters were warned of dire economic consequences if they said “no” a second time. Keeping the gun firmly locked onto the temples of the electorate, the Irish government and senior EU officials spent weeks chanting another Orwellian mantra reminding people of their obligations to vote the correct way.
In hindsight, this was not so dissimilar to implicit demands made by Burma’s ruling junta, which told voters to back its proxy, the Union Solidarity and Development Party, at the polls on Nov. 7 2010. Sure enough, the party won in a 76 percent landslide, albeit not without a lot of alleged ballot stuffing by the authorities.
But for a country that has scarcely any memory of parliamentary rule or prosperity, this was not quite like the sharp shock that has been inflicted on the Irish people, but rather, just another blow to the hopes of a people whose “recovery” from decades of misrule remains a long way off.Show