http://www.csmonitor.com/World/Europe/2012/0106/China-s-new-European-trade-hub-An-Irish-town-of-18-000

Central Dublin, December 2011 (Photo: Simon Roughneen)

ATHLONE, IRELAND – As China’s government readies to buy up European infrastructure, a trade hub slated for the Irish midlands could prove a showcase for the world’s second-largest economy in a struggling continent and provide much needed jobs in debt-addled Ireland.

In December, local authorities gave the go-ahead to a trade hub that would give Chinese business an anchor in Europe. Backers say the 1.4 billion euro ($1.8 billion) project “will become the largest European source of Chinese-branded goods in Europe.”  With the World Bank’s growth forecast for China reduced, partly because of the reduction in European demand for Chinese goods, a revived Europe is in China’s interest.

Meanwhile, Ireland is looking at 63 billion euros in bank debt and is mired in a deep recession. Although the country was edging toward growth earlier in 2011, by the third quarter of 2011 the government reported a 2 percent decline in national output.

The Athlone Institute of Technology hosts more than 200 Chinese students – one of the links that helped bring the trade hub to the town, says Prof. Ciaran Ó Catháin, the president of the school and one of the players in the project negotiations. Professor Ó Catháin would not disclose who the Chinese backers are, but says, “suffice to say there are significant players involved on the Chinese side.” Plans for the project predict at least 400 Chinese businesses using the trade hub to launch their products in Europe.

Athlone shopping mall during post-Christmas sales (Photo: Simon Roughneen)

The Athlone announcement came on the heels of a November announcement by Chinese Commerce Minister Chen Deming that Beijing will send a delegation to Europe in 2012 to explore options for investing in state-owned infrastructure. China has already bought about 600 million euros worth of European debt and is now looking to invest in state assets as well, such as roads and trains.

According to Mr. Chen, European countries facing substantial debt are seeking to convert their assets into cash – and are looking to foreign investors for that capital. As part of Ireland’s debt reduction plans, The International Monetary Fund (IMF) has suggested that Ireland divest up to 5 billion euro worth of state assets, a fire sale that could interest more Chinese investors.

If the Athlone project is successful, China could take the game to the US. According to Ó Catháin, Ireland’s low corporate tax rate was “a major inducement” for Chinese investors to back the trade hub there, but Asian investment in Ireland is still almost subterranean compared to US investment there. While there are 41 Asian companies operating in Ireland, there are 491 American companies and 99 German ones, according to 2010 statistics from the Industrial Development Agency, the state body responsible for attracting foreign companies to Ireland.

Ireland remains a hub for transnational brands. Google, Facebook, and Intel all run major European operations out of Ireland, lured by its 12.5 corporate tax. Amid a 14 percent national unemployment rate, roughly 13,000 new jobs were created in 2011 by foreign investors – a net gain of 6,000 jobs because 7,000 others were eliminated.

Driven by these big brands, Irish exports are on the up – a positive sign amid an otherwise harsh economic outlook. Enterprise Ireland, a state agency that promotes Irish investment overseas, said in December that 2011 export figures would “exceed the pre-recession record levels of 2008.”

IDA business park in Athlone (Photo: Simon Roughneen)

However, exports are not putting a dent into Ireland’s unemployment rate, which keeps consumer demand low and in turn hinders economic growth. Economist Brian Lucey says “part of the problem is Ireland’s concentration on pharmaceutical, medical, and hi-tech sectors, which do not create many new jobs.”

Exemplifying this ambivalent economic outlook is Carraig Donn, a stylish but affordable fashion retailer headquartered in Westport, on Ireland’s west coast near Croagh Patrick. Chairman Pat Hughes says that with revenue boosted by online sales, he hired an extra 60 people in 2011, bringing total staff up to 350. However, “times are challenging, and we cannot really plan too far ahead,” he says.

According to statistics compiled by Vision-Net, 160 irish companies collapsed each month in 2011, a 20 percent increase from the previous year, highlighting the depth of Ireland’s economic woes.

The Irish Exporters Association reports 75 percent of Irish exports come from foreign investors, rather than homegrown successes such as Carraig Donn. With that in mind, the government job strategy remains based on attracting more foreign investment and expanding export industries that can employ citizens, says a spokesperson for Minister of Finance  Michael Noonan in an e-mail.

Investments like the Althone trade hub – dubbed Chinatown by one local paper – might help. Though three anonymous objections to the project have

At work inside Carraig Donn (Photo: Simon Roughneen)

since been lodged with the Irish planning board, Athlone residents generally seem to be in favor.

Speaking in a busy Athlone shopping mall during post-Christmas sales, teacher Kevin Jordan says, “We don’t know a whole lot about the project, but it could mean a lot of jobs for this region, and that has to be welcomed.”

Athlone Mayor Alan Shaw said town residents are pleased that the county council approved the project. He said he believes that one reason the Chinese backers chose Ireland for such a huge investment is that unlike other European countries, “Ireland has not been preaching to the Chinese about human rights.”

Mr. Hughes of Carraig Donn is already looking to the vast potential middle-class markets in China and India and had an office in Guangzhou, China. Should he be able to grow his business there, it could create more demand for jobs at home.

“I see India and particularly China as markets we can access, with their growing and vast middle classes, and we hope to get potential customers there aware of our product,” he says.

http://www.ncregister.com/daily-news/irish-continue-to-struggle-over-abuse-fallout-as-nuncio-takes-up-post

DUBLIN — As Archbishop Charles Brown takes up his new post of papal nuncio to Ireland, he will face what some see as unprecedented difficulties for the Church in Ireland.

After the publication of a series of reports outlining gruesome cases of sexual abuse by priests in Ireland over recent decades, coupled with a falloff in Church attendance, and less quantifiably, a perceptible decline in religious belief and practice, it’s little wonder that Archbishop Diarmuid Martin of Dublin predicted that his archdiocese faced its toughest challenge “since Catholic Emancipation,” the 1829 changes to British law that removed many of the discriminatory provisions against Catholics in the United Kingdom, of which Ireland was then a part.

Archbishop Martin was commenting on a drop in Mass attendance in Dublin to 14% and declining priest numbers, but the remarks were seen by many as appropriate to the wider Church in Ireland, which now operates within what Irish writer John Waters described to the Register as “the most anti-Catholic country in Europe.”

That animus erupted into open verbal warfare during 2011, a year marked by confrontation between the Church and the Irish government — a recently elected coalition encompassing the “center-right” Fine Gael (literally “Tribe of Irish”), the largest party, and the Labour Party, which Waters described as “secular-atheist” in its worldview. Ireland, according to Waters, is going through a belated and accelerated version of the “rush of atheism and pseudo-rationalism” that other European societies have long since undergone, but one that makes the Irish “culture war” potentially more divisive.

On July 20, 2011, Ireland’s prime minister — called locally An Taoiseach (literally “chieftain,” the title being a tokenistic official reference to Ireland’s Gaelic antiquity) — Enda Kenny, made international headlines when, in an address to the Irish parliament, he pointed to what he described as the “dysfunction, disconnection, elitism — the narcissism — that dominate the culture of the Vatican to this day.”

More specifically, he alleged that the Cloyne Report, which was published one week previously and pointed to cover-ups of and a failure to address abuse in the southern Irish diocese, “exposes an attempt by the Holy See to frustrate an inquiry in a sovereign democratic republic.”

A spokesman for Kenny said that his speech “accurately reflected the public anger of the overwhelming majority of Irish people at the failure of the Catholic Church in Ireland and the Holy See to deal adequately with clerical child sexual abuse and those who committed such appalling acts.” The spokesman said, however, that the government has “welcomed the Holy See’s commitment to constructive dialogue and cooperation with the government, and the Tánaiste (deputy prime minister) has said that should the government be informed by the Holy See that Pope Benedict wishes to visit Ireland at a time of mutual convenience, for instance on the occasion of next year’s Eucharistic Congress, he has no doubt that the government will respond positively and that an invitation will be forthcoming.”

Archbishop Martin was not available for an interview.

In a Sept. 3 written response, the Vatican argued that Kenny’s latter claim was “unfounded,” but Kenny stood by his words, which included an unrelated 1990 quote by then-Cardinal Joseph Ratzinger, juxtaposed to suggest that Cardinal Ratzinger was referring as Pope to Church policy on addressing abuse issues.

Eamon Gilmore, the Irish foreign minister, who doubles as Kenny’s deputy PM, dismissed the Vatican response as “highly technical, highly legalistic; very much dancing on the head of a pin.”

Later, on Nov. 3, Gilmore, also head of the Labour Party, announced that the country would close its embassy to the Holy See, “with the greatest regret and reluctance,” according to Gilmore. He added that “while the Embassy to the Holy See is one of Ireland’s oldest missions, it yields no economic return.”

Kenny’s speech sought to tap public anger at the abuse scandals and at what minister for Children and Youth Affairs Frances Fitzgerald later described as “the desperately poor response they received from the Church authorities in Cloyne.” But, to some, the Kenny attack seemed like using the Cloyne Report to take a cheap shot at the Vatican.

Father Paddy McCafferty, a 47-year-old priest from Northern Ireland, but now in Rathmines in the same Dublin Diocese where Archbishop Martin believes there to be historic challenges, described the Kenny attack as “opportunistic grandstanding.”

While Father McCafferty was a seminarian, he was sexually assaulted by James Donaghy, a former priest who was jailed last month in Belfast for the attacks as well as other charges of abusing teenage altar boys.

Referring to the Kenny speech, Father McCafferty added that “the Taoiseach was using the victims’ suffering for his own purposes.”

Asked why he became a priest after the attacks, Father McCafferty said, “I have wanted to be a priest since I was a boy and did not want to let the abuser stop that.” He said that he could not have survived without the support of what he describes as “true, good people in the Church,” but added that he is glad that the Church in Ireland has shed much of its sometimes secular prominence in Irish public life.

That exalted role may have contributed to what Father Vincent Twomey, author of The End of Irish Catholicism? and Benedict XVI: The Conscience of Our Age , described as “a certain complacency, historically, within Irish Catholicism.” He hopes that with the International Eucharistic Congress taking place in Ireland in June 2012 — an event that may yet see Pope Benedict XVI in Dublin — “there may be a springtime in the Church here,” though he conceded that “we are facing a difficult situation.”

A likely challenge will come from a new law on the withholding of information on crimes against children, which could attempt to force priests to disclose information they hear during sacramental confession. There have been conflicting statements from Irish government ministers on whether or not this will be part of the proposed law, details of which will be made public early this year.

Some of the Irish bishops — a number of whom have been attacked for their role in dealing with sex abuse by priests in their dioceses — are due to retire in the coming months, and Archbishop Brown, the new nuncio, will oversee new appointments.

But whether or not Irish Church leaders are in a position to react to the law, and more generally “to address the view that Christianity is seen as obsolete,” as Waters put it, remains to be seen. “What is needed,” he said, “are bishops who understand Christianity and are prepared to talk about it without being scared.”

Southeast Asia-based Register correspondent Roughneen filed this story from Ireland, where he visited in December 2011

Read more: http://www.ncregister.com/daily-news/irish-continue-to-struggle-over-abuse-fallout-as-nuncio-takes-up-post/

http://www.independent.ie/lifestyle/education/latest-news/ireland-pushes-education-ties-with-vietnam-with-bid-to-attract-1500-third-level-students-2947369.html

Ireland's Minister of State for Trade and Development Jan O'Sullivan and Vietnam's Minister of Education and Training Pham Vu Luan sign education MOU in Hanoi on Monday (Photo: Simon Roughneen)

Simon Roughneen in Hanoi – Ireland and Vietnam today launched a deal aimed at increasing the number of Vietnamese students taking third-level courses in Ireland.

Speaking in the Vietnamese capital on Monday morning, Minister of State for Trade And Development Jan O’Sullivan said that “Ireland sees our education linkages as central to the future of bilateral economic relations with Vietnam.”

Currently 40 Vietnamese are enrolled in Ireland’s universities, mostly funded by Irish Government scholarships. To compare, 6000 Vietnamese are studying in the UK, and elsewhere, tapping the Asian student market has created a multi-billion dollar industry within Australia’s third-level education system. Last year 25,000 Vietnamese were part of a total of 240,000 Asian students who enrolled in Australia, up from 180,000 in 2008.

Quynh Luy, 24, recently returned to Vietnam to work at the National Institute for Hygiene and Epidemiology, after spending one year at University College Dublin studying Clinical and Diagnostic Virology. “It was a good environment to study in”, she recalled, “and I am glad to be applying what I learned at home”.

As a one-party state governed by the Communist Party of Vietnam, the country is not noted for open political debate – despite over two decades of market-based economic growth. However, some policy areas – such as education – on occasion feature vigorous discussion in the country’s legislature.

On November 24, Vietnam’s Minister of Education and Training Pham Vu Luan was questioned about Vietnam’s own third-level sector. Deputy, Le Nam asked  “the training quality is low, many universities supplies low-quality students. What measures will you take to deal with this situation?” Minister Luan acknowledged that “investors of some universities, particularly newly-established ones, do not seriously observe regulations on training quality and training facilities.”

Amid these public concerns about domestic educational quality, graduating from a foreign university is seen by Vietnamese as a ticket to a better job at home.With Australia tightening visa regulations for foreign students, it could offer Ireland an opening  to attract fee-paying students from Asia.

Ireland hopes to attract some of the 1500 Vietnamese who receive scholarships from the Vietnamese Government each year to study abroad, though awareness of Ireland as a possible study destination remains low. Nguyen Mai Chi studied Human Resource Management at Dublin City University in 2009, but said that many of her friends were curious about her choice of Ireland over more familiar locations such as Australia or Singapore. “Where is it? Is it like Iceland? Do they speak English? These are the questions my friends here were asking”, she recalled.

Aid and trade are also on the agenda for Min. O’Sullivan in the former French colony, where today she launched a €55million five year plan for Irish aid to Vietnam, and will meet local and Irish business people seeking to invest in an economy which has grown at an average of 7% per annum over the past decade, boosting average incomes to over US$1000.

Vietnam is now struggling with 20%+ inflation, however, and noting Ireland’s post-2008 economic woes, Vietnam’s Deputy Minister for Planning and Investment Cao Viet Sinh said that “we appreciate the support of the Irish Government to Vietnam, especially in the context of the Irish public debt”.Despite another looming austerity budget at home, Min. O’Sullivan said that Ireland’s aid to Vietnam would continue, as part of a broader strategy to boost Ireland’s presence in southeast Asia’s third-largest country. Citing “strong public support” for Ireland’s aid programme, O’Sullivan linked Ireland’s aid strategy to trade and investment policy in Vietnam. She said that “we have enjoyed strong export growth despite the downturn” and assessed that “exports can provide jobs at home”.

http://www.irrawaddy.org/article.php?art_id=21245

Following the May 5 business summit in Jakarta between the European Union (EU) and the Association of Southeast Asian Nations (Asean)—combined with reports from recently leaked US diplomatic cables shedding light on several European countries’ policies on Burma—suggestions are that the EU’s post-election shift on Burma should not come as a major surprise.

The EU modified its sanctions against the Burmese authorities, relaxing visa restrictions against a number of officials, including the new foreign minister, Wunna Maung Lin, who is now deemed “an essential interlocutor” by the Council of the EU. The Council statement said that the amendments were intended “to encourage and respond to improvements in governance and progress, in the hope that a greater civilian character of the government will help in developing much needed new policies.”

Prior to the statement, there was speculation among Burma activists and analysts that the EU was engaged in a collective softening of its “common position” on Burma, after the November 2010 elections and the formation of a new government in Burma earlier in 2011.

However, recently leaked US diplomatic cables from various European embassies reminded observers that overlooking the EU travel ban for Burmese ministers is nothing new.

Prior to the September 2006 Asia-Europe (ASEM) meeting, the then-Finnish Presidency of the EU invited Nyan Win, who at the time was Burmese foreign minister, to attend the summit. This drew US attention, and the matter was raised in meetings between US diplomatic officials and counterparts in various European Union member-states in the weeks leading up to the ASEM gathering.

On Aug. 1, 2006, US officials in Dublin discussed the issue with Ireland’s department of foreign affairs Asia section first secretary James McIntyre, who said that the Irish government “would not ask the EU Presidency to withdraw or downgrade their invitation for Burma” to attend the following month’s meeting “because the decision is in line with the EU Common Position,” which allows Burmese officials to be exempted from the visa ban for multilateral meetings if the situation in Burma is addressed at the meeting.

On the same day, US officials in Vienna met with deputy director for Asia and Oceania in the Austrian ministry of foreign affairs Peter Storer who responded to US concerns about the invitation by saying that the ban imposed on the Burmese at the previous year’s ASEM meeting by the Dutch EU Presidency resulted in Asean member-states boycotting the meeting.

Meanwhile, in Prague, the US embassy to the Czech Republic met with Czech foreign ministry official Ivan Grollova who said, according to the leaked cable, that the Czechs “supported the decision on the condition that the EU use the Burmese foreign minister’s attendance at ASEM as an opportunity to have substantive discussions on human rights violations in Burma.”

On Aug. 1, US officials in The Netherlands spoke with the Dutch ministry for foreign affairs Southeast Asia officer Christian Pourchez, who said that his country would not challenge the Finnish invitation to Burma, despite refusing to issue a similar invite the previous year.

Pourchez said that the meeting would be an opportunity for the EU to press Burma on human rights issues and that—irrespective of the stance taken by other EU member-states—the Dutch government would take an aggressive approach with the Burmese foreign minister. The US responded that “according to Pourchez’s own office, the Burmese foreign minister has relatively little influence within the regime and his presence at an EU forum can do little to further human rights in Burma.”

At that September 2006 ASEM summit, the Burmese foreign minister “assured us they were seriously striving for democratic reforms,” said a Finnish official who attended the meeting, which came a year before the Burmese crackdown on monks and protestors during the “Saffron Revolution.”

One of the listed speakers at the May 5 business meeting in Jakarta was Aung Khin Myint, the chairman of Myanmar International Freight Forwarders Association (AFFA).

After the summit, Indonesian President Susilo Bambang Yudhoyono met with Burmese counterpart Thein Sein, who arrived in Jakarta for his first state visit since becoming president, before the Asean summit which takes place over the weekend.

Burma’s president is expected to push for his country’s candidacy as Asean Chair in 2014, and despite the EU’s recent renewal of most of the current sanctions, there is no indication that the Europeans will oppose Burma’s accession, irrespective of whether further reforms—such as release of political prisoners—takes place.

The EU describes itself as Asean’s second largest trading partner and the biggest foreign investor in Asean, though these are cumulative figures based on investment by companies from EU member states and on trade between the 37 countries making up the two regional blocs.

The EU is seeking free trade agreements with Asean member states, such as Singapore and Malaysia, though Indonesia, the current chair, is pushing for a bloc-to-bloc deal, rather than individual countries cutting bilateral deals.

http://www.irrawaddy.org/article.php?art_id=20854

BANGKOK—The lead European Union (EU) official on humanitarian issues will visit Thailand next week to meet government officials and non-governmental organizations (NGOs) to assess the situation in Burmese refugees camps in northern Thailand.

The visit by EU Commissioner Kristalina Georgieva comes after NGOs and Burmese exile groups complained of cuts in humanitarian aid to refugees in the camps. Many of the refugee camps have been in place since the 1980s and their population is around 150,000.

Mathias Eick, the Regional Information Officer for ECHO, the European Commission’s (EC) humanitarian arm, said that the EC’s funding “has remained more or less constant over the last few years, at around 12.5 million euros per annum.”

Since 1994, “the European Commission has provided more than 140 million euros in support to refugees from Myanmar in Thailand,” Mr Eick added.

However, the EC—which functions as a sort-of cabinet within the EU’s dispersed and complex governing structures—is shifting its approach to Burmese refugees in Thailand. According to Mr Eick, “As the camps have existed for 25 years, and also serve as a pull factor for economic migrants and third-country resettlement seekers, there is now a need to move from a humanitarian relief focus to more sustainable long term solutions for the refugees.”

Speaking on condition of anonymity, a spokesperson for an organization working with refugees in the camps along the border between Thailand and Burma said that cuts in direct assistance to refugees is cutting into the basic nutrition and health-care needs of the people in the camps.

EU ambitions “to promote a more development-oriented approach to Burmese refugees in Thailand” will not work, says the refugee camp worker, “unless there are changes to Thai policy regarding refugees.” This currently restricts refugees to the camps, thereby limiting the options for those refugees who would prefer not to be reliant on humanitarian relief and making it unclear how the ECHO could implement its “more sustainable long terms solutions for the refugees.”

Georgieva is set to look into reports that some of those entering the camps are not refugees, but economic migrants, or people seeking repatriation to a country outside Thailand. However Thai authorities have not run a screening program for the camps since 2005, making it impossible for camp management officials to ascertain the motives and identity of everyone entering the camps. That uncertainty is not sufficient in itself to justify funding cuts, says the camp worker.

ECHO and the EC are responsible for 30-40 percent of all humanitarian spending by the EU and member states, an average of 640 million euros per annum, according to the ECHO website. In 2008, the most recent year that records are available on the ECHO website, the biggest EU member-state donors to ECHO were the United Kingdom (343 million euros), Germany (224 million euros), Denmark (178 million euros), Italy (141 million euros) and Ireland (117million euros).

Of these, Germany and Italy are thought to be the lead players promoting closer ties with the Burmese Government, as the EU “Common Position” on Burma comes up for its annual review in April. David Mathieson, a Burma expert at Human Rights Watch, said that “there are major divisions in the EU over Burma, and the divisions have always been there but have certainly been growing over the past few years, and are more pronounced since the elections.”

Burma’s elections held on November 7, 2010 produced a landslide win amid allegations of rigging and ballot-stuffing for the junta-backed party known as the Union Solidarity and Development Party (USDP), which took 76 percent of the vote. 25 percent of seats were reserved for current army officers in any case, and the new government is comprised mostly of military men, and is nominally headed by former Gen Thein Sein, who was prime minister under the old military regime.

Mathieson says that the view held in some quarters that the elections and formation of a new government mean that there is even a small window of change opening in Burma, is “a cereal-box platitude,” and that nothing has changed in how Burma is ruled since the elections.

The EU Common Position mandates some sanctions on the Burmese government, and Burmese groups in Europe have been lobbying for these sanctions to be at least retained in the upcoming review.

The EU envoy to Burma/Myanmar, Piero Fassino, is due in Thailand next week, two days before Georgieva’s visit. Requests to his office for comment on the upcoming visit were not answered at time of going to press, with Mr Fassino having just won the primary election contest in the race to become Mayor of Turin, Italy.

Despite divisions within the EU, it seems unlikely that sanctions will be eased at this juncture, according to people close to the debate.

Mark Farmaner, head of the Burma Campaign UK, said, “The regime has been so blatant in rigging the vote and controlling all aspects of government that it seems most EU countries skeptical about sanctions have had to concede there is no justification for lifting economic sanctions.”

Ireland’s economy has shrunk by over 20 percent since the Celtic Tiger’s heyday, and a February 25 election could see the country’s political map redrawn.

For the birds? Ireland's politicians have come under relentless attack in recent months. (Photo, Dublin city centre Jan 2001, taken by Simon Roughneen)

http://www.isn.ethz.ch/isn/Current-Affairs/ISN-Insights/Detail?lng=en&id=126551&contextid734=126551&contextid735=126550&tabid=126550

The echo-chamber that is Irish political punditry has seen an over-used acronym get another airing in the past few weeks: “GUBU”, coined by the late Conor Cruise O’Brien, former UN diplomat, Irish Government Minister and editor of The Observer, stands for “Grotesque, Unbelievable, Bizarre and Unprecedented”. Whenever something controversial or unusual takes place in Irish politics, GUBU is the shorthand of choice, irrespective of hyperbole or appropriateness.

Yet, the often bizarre deaththroes of the government led by Brian Cowen and his party, Fianna Fáil, are as close to GUBU as Ireland has seen since the term first entered the political lexicon back in 1982 when Ireland’s economy faced a crisis akin to this one.

A half-resignation

Since a hastily arranged press conference two weeks ago in Dublin’s Merrion Hotel, when Prime Minister Brian Cowen said that he wanted to remain in his job despite ceding leadership of his party, events have taken a new turn. This move came after a week in which he had staved off a leadership challenge from Foreign Minister Michéal Martin and attempted a ministerial reshuffle. That in turn followed revelations that Cowen had undeclared meetings with one of the executives at the center of Ireland’s banking collapse, adding to the perception that his party was in cahoots with those most responsible for Ireland’s economic woes.

Since then, Cowen has been succeeded by Martin as party leader, and as of 1 February, was finally seeking the dissolution of the current government. A parliamentary election will take place on 25 February, and could see the traditional party lines of Ireland’s politics redrawn. Cowen will not even contest his parliamentary seat in the midlands constituency he has long-dominated, as his party faces obliteration at the polls. Although Fianna Fáil has dominated Irish politics for most of the post-independence era, the severity and nature of Ireland’s economic crash has been pinned on the party, perceived to be too close to a cabal of bankers and property developers. The triumvirate is blamed for overheating Ireland’s economy with a Ponzi-esque property bubble, resulting in the former “Celtic Tiger’s” economy contracting by perhaps as much as 20 percent in the past two years.

After Cowen’s resignation from the party leadership, Ireland’s Green Party announced on 23 January that it was withdrawing from government, but with the caveat that it would support an allegedly crucial finance bill from opposition. The bill runs to almost 300 pages and has been described as “unintelligible” to anybody bar taxation experts. However, all of Ireland’s main parties, except Sinn Féin, formed an alliance of convenience in parliament last week to ensure the measure passed into law. The bill is needed to facilitate Ireland’s acceptance of the €85 billion bailout from the IMF and the EU.

The “bailout”, however, remains highly controversial, with a 5.8 percent interest rate on repayments seen by many as onerous, if not simply beyond the means of the country. Critics say that the money is intended to shore up the banks and investors, in Ireland and elsewhere, who gambled – and lost – on Ireland’s property bubble, and unfairly penalizes the taxpayer for mistakes made by others.

‘Mesmerizing’

As the crisis gathered momentum, Sinn Féin’s Aengus O Snodaigh said that “our international reputation is going downhill” – a belated understatement given that Ireland was, for a few days, again one of the top stories on international news networks, reprising the dubious profile attained during the “bailout” saga, while the IMF and EU delegations were in-country prior to Christmas.

That said, Ireland’s economic reversal has not been met with the same sort of ferocity on the streets as seen in Greece last year. “Mesmerized” was how one backbench Fianna Fáil parliamentarian said he felt after Cowen’s attempted cabinet reshuffling, and the same seems to apply to the Irish in general given the tame response to two years of economic disaster. Impunity prevails, and not only has there been no equivalent to the jailing of Bernie Madoff, the disgraced US financier, but on 21 January another senior bank executive, who was belatedly discarded after 2008, was handed a plum job as Secretary General of the Irish Red Cross.

Further, Ireland’s almost 14 percent unemployment rate sets a new record measured in absolute numbers. Ireland is also expected to cut €15 billion in public spending over the next three years after billions in cuts already in order to meet EU budget deficit requirements. The Economic and Social Research Institute in Dublin predicts that 2011 will see a record number of Irish emigrate, and research by Kavanagh-Fennell suggests that over 1500 firms went into liquidation in 2010. Indicative of the wider impact of the property collapse, the ESRI estimates that around 300,000 Irish homeowners are in negative equity.

Historic realignment?

Fianna Fáil dipped to eight percent in an opinion poll published recently, and though Martin’s succession gave the party a bounce back to double figures, the new leader faces a massive challenge in the election campaign now underway. With the dire economic and socioeconomic situation in mind, the party faces a historic and unprecedented wipeout in the forthcoming elections. It currently holds 71 seats out of 160 available, but could conceivably be reduced to less than 25, and coalition partner Green Party could be left with no representation at all in Ireland’s parliament.

While the two main opposition parties Fine Gael and Labour look like they will be the main beneficiaries, the political shifts looming could be more far-reaching than just a Fianna Fáil collapse. Some well-known economists have stated their intention to run in the election as well, amid speculation that a new technocratic center-right party, featuring well-known economists and journalists, could emerge to fill the Fianna Fáil void, in part at least.

The left, however, might well be a more immediate beneficiary, and Sinn Féin and Labour could possibly garner enough support to govern with the backing of left-leaning independents. That outcome would give Ireland its first-ever left-wing administration.

The largest opposition party, however, is Fine Gael, which has typically been Fianna Fáil’s main rival. The two are seen as similar in terms of policy, which could limit Fine Gael’s appeal come voting day. There are significant policy divisions between Fine Gael and Labour on a number of issues, and the former could win enough seats to form a minority government, perhaps supported in opposition by a rump Fianna Fáil.

Populist nonsense

Sinn Féin took a strongly Marxist turn during the 1969-1998 “Troubles” in Northern Ireland, when it acted as the political wing of the Irish Republican Army (IRA). Spouting leftist economics seemingly stalled Sinn Féin’s rise in the Irish Republic after the 1998 peace agreement in Northern Ireland, but now the party and others in the Irish left will have their best shot at overturning Ireland’s usually non-ideological voting patterns, with poster-boy Pearse Doherty likely to lead their campaign, despite the presence of Sinn Féin President Gerry Adams, who will be making his first-ever attempt to win a seat in the Irish parliament in a constituency close to the border with Northern Ireland. (Adams is a MP for West Belfast in the British parliament, though he has refused to take his seat there.)

All told, the banking and property crises are potent weapons for ideologues seeking to discredit anything linked to free market thinking in the eyes of disillusioned Irish voters, no doubt angered by a study by the Irish Small and Medium Enterprises Association (ISME) that says that Ireland’s economy has shrunk by 22 percent since early 2007. Even as exports increase six percent year-on-year, there are few sources of optimism left.

Yesterday credit ratings agency Standard and Poor’s downgraded Ireland’s credit rating once more, after Fine Gael and Labour said they would renegotiate the bailout terms, following Sinn Féin’s pledge to refuse the bailout outright. Fine Gael has mentioned a cap on income taxes, despite Ireland’s fiscal imbalances. Although the Irish people deserve some respite from the tax –hike spending-cut pincer, a degeneration into electioneering-as-infantile-populism will hardly see a solution. Fianna Fáil might well scent an opportunity to brand rival parties as naive and opportunistic, despite the infantile populism of the party’s own record in Government, with former PM Bertie Ahern famously chastising the few voices who predicted a crash as doom-mongers, and advising them to commit suicide.

Simon Roughneen is an Irish journalist usually based in Southeast Asia. He was in Ireland during December and January.

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http://www.thejakartaglobe.com/opinion/charcoal-in-cold-weather-china-comes-calling-in-debt-ridden-europe/415686

DUBLIN – Europe is becoming a new horizon for China’s business-based diplomacy, less than a year after the European Union overtook the US to become China’s second-largest trading partner. Chinese investment expansion is increasingly turning to Europe, and it is finding a grateful audience.

Last September, before the arrival of the International Monetary Fund and an €85 billion bailout offer-you-can’t-refuse for the economy once known as the Celtic Tiger, Ireland Prime Minister Brian Cowen tried to sell Chinese investors on the proposition that the country could be a low-tax Anglophone gateway to Europe.

After meeting with a Politburo delegation in Dublin, Cowen said that China’s representatives had vowed to be “as helpful as they can to a friend like Ireland in the difficult times that we have.” That friendship appears to include a consortium of Chinese investors who are starting work on “an investment gateway to Europe” – an industrial park in central Ireland.

Nor is Ireland alone. Other struggling European economies need the money and the external vote of confidence. Right now Vice-Premier Li Keqiang is touring Spain, the United Kingdom and Germany, and already the visit has yielded some spectacular headlines – if apparent global economic landmarks are your thing. China will purchase some of Spain’s debt and ease pressure on the country’s struggling economy, where 40 percent of the country’s youth are unemployed, by promising to buy more Spanish wine and agricultural goods as part of US$7.5 billion worth of trade deals signed on Jan. 5 and 6.

The platitudes delivered by Vice-Premier Li in Ireland came amid talks about the proposed multi-million dollar investment park, which is lined up for the midlands Irish town of Athlone. If it comes to fruition, the project could provide around 10,000 jobs – including 2,000 in the initial stages for Chinese construction workers at a time when Ireland’s suicidal property bubble has left thousands of builders on the breadline and tens of thousands of newly-built houses unoccupied.

“Right now, we are not sure, however, just exactly what is being planned,” conceded Athlone Mayor Sheila Buckley-Byrne. “What the project involves, how much money, how many jobs – these details are yet to be ironed out.”

If and when the work gets underway, the end-game will apparently be a showcase-entrepot for Chinese investment in the EU. Ireland’s 12.5 percent corporation tax is apparently as much of a draw in China as it is in the US, as seen in Dell, Google, Intel lining up among the multinationals that have made Ireland their European headquarters.

Ahead of Li’s visit to the UK, where he is to be accompanied by a retinue of more than 100 business executives, China’s ambassador in London wrote in the Daily Telegraph that his country’s policy in Europe is to do “what the Chinese proverb says about sending charcoal in snowy weather.” The charcoals in question are the world’s largest foreign reserves, around US$2.6 trillion, which China is keen to diversify into currencies other than the US dollar.

China is keen to prevent collapse of the euro, which is being threatened by the debt crisis in Europe, according to Premier Wen Jiabao. Buying European debt would help China move away from the dollar and no doubt buy Beijing support in its struggle with the US over the value of the renminbi, also known as the yuan, which Washington sees as too low and a cause for America’s huge trade deficit with China.

Three months ago Wen posed for photos in front of Greece’s landmark antiquarian monuments during a European tour in which he reminded Brussels that China is “a friend” to Greece, Spain, Italy and other troubled European countries, proven by Beijing’s willingness to help out by buying bonds as other investors fled.

Wen demanded that other European leaders not “pressure China on the yuan’s appreciation,” perhaps seeing an opportunity to drive a wedge between the US and some European countries on the issue. China’s assistance to Europe, though not the Marshall Plan that some pundits have labeled it, is a similar mix of apparent economic altruism masking strategic interest.

China’s intervention could enable the rest of the EU dodge a bullet. A Greek or Irish-style crisis in Spain could be doomsday for the euro. The cost of a Spanish bailout, if needed, could be beyond what the rest of Europe is willing to pay, given that the Spanish economy is twice the size of Greece’s, Ireland’s and Portugal’s combined. Germany has come through the global downturn – really a western problem – in good stead, partly due to rising exports to China. The public mood might not tolerate more German money being spent on another of the so-called PIIGS — Portugal, Ireland, Italy, Greece and Spain.

Ireland’s take-up of the IMF/EU bailout depends on the passage of various finance bills over the coming months, and possibly could be derailed by a looming election. The near 7 percent interest sought for repayments of some parts of the Irish bailout has been described as excessive by some in Ireland, so perhaps there is still scope for China to offer a loan, or pitch in on the EU/IMF offer at a lower rate.

The first €5billion of the money will be given to the Irish Government early next week, though full acceptance of the bailout is pending the passage of several finance bills in the Irish parliament over the coming weeks.

Whether or not that happens, China’s willingness to buy up European debt should at least lower borrowing costs for the PIIGS quintet, all of which have seen credit ratings agencies drive up the cost of their borrowing on international markets.

While China has yet to confirm details of whatever bond purchases it has made in Europe, there has been ample publicity surrounding more tangible investments. Wen’s Greek visit saw China’s shipping giant Cosco take over cargo management at Piraeus, the biggest port in the eastern Mediterranean. Other deals included proposed technology exchanges between Huawei Technologies and the Greek telecoms entity OTE and, as with Spain, agreements signed by local food firms to export olive oil to China, where wealthy consumers offer a growing market for western food.

However, the growing ties may not mean European countries will hand over the family silver in exchange for easy Chinese money, even if this is just talking the talk so far. EU industry commissioner Antonio Tajani believes that Europe should establish a new oversight body with powers to block foreign takeovers of strategic European businesses, akin to the Committee on Foreign Investment in the US, and prevent Chinese businesses, many of which are closely aligned to the country’s Communist Party and military, from acquiring strategically-important European enterprises. Li’s visits to the UK and Germany should reveal more about how this all could play out in the coming years.

http://www.irrawaddy.org/article.php?art_id=20438

Bleak midwinter at Dublin Airport's new Terminal 2 (Photo: Simon Roughneen)

DUBLIN — While doing research on 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 decisive reply, which she diluted with the following cryptic qualifier: “However, they are there anyway.”

This well-known anecdote might be apocryphal, and the supernatural is long gone from Irish popular culture, but there are elements of the mystical about the country’s recent economic boom-to-bust saga.

From the mid-1990s to 2007, Ireland’s economic boom 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, which unthinking policymakers trot out and hide behind, as if constant reiteration of stock economic concepts can make these a reality in the day-to-day world.

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 acquired a penchant for 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 benefited most of the people, 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 this than 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, as 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. 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.

http://www.irrawaddy.org/article.php?art_id=19591&Submit=Submit

Pye Phyo Tay Za, the son of Tay Za, a businessman with close links to Burma’s military government, is appealing a decision taken earlier this year which maintains European Union (EU) financial sanctions and travel ban against him.

The case is now before the Court of Justice in Luxembourg, which is the highest court in the EU in terms of EU law, and pits Pye Phyo against the Council of the European Union, the European Commission and the United Kingdom.

On May 19, Pye Phyo Tay Za lost a legal bid at the General Court to have EU sanctions overturned. He was ordered to pay the court costs for the Council of the EU. He is seeking that the entire May 19 decision be overturned, that the sanctions regulations be rendered null and void in his case, and that the Council foot the bill for this appeal and for the previous case.

Pye Phyo’s legal team is challenging the May 19 decision on a number of grounds pertaining to what it terms “particular legal flaws in the General Court’s judgment.” His lawyers and solicitors are again focusing on “the link between the Appellant and the military regime of Burma/Myanmar.”

The appeal was lodged on July 27, and details were published in the EU official journal on Sept. 25. It says that Pye Phyo “is not a ruler of Burma/Myanmar, nor a person associated with a ruler, and is not controlled, directly or indirectly, by a ruler. The fact that he is the son of someone whom the Council considers to have benefited from the regime is insufficient.”

This echoes the case made at the General Court, in which Pye Phyo argued that he is neither a member of Burma’s military government nor associated with it, and does not benefit from “the administration of that government.”

However, in the original General Court case, it was claimed that “neither the applicant [Pye Phyo] nor his father received any benefits from the regime.” However, it now appears that the Court of Justice appeal will not go so far as to question whether Tay Za is “someone whom the Council considers to have benefited from the regime.”

In defending the General Court case to have sanctions against Pye Phyo retained, the Council said that the appeal could be a way for Tay Za to circumvent the sanctions against himself. The Council stated: “The applicant was aware of the reasons for which such restrictive measures specifically apply to him, since he states in paragraph 37 of the originating application that there may be a risk of his father circumventing the freeze on his own assets by transferring his funds to other family members.”

Tay Za owns the Htoo Group of Companies, which has stakes in major economic sectors in the country such as logging, tourism, hotels, airlines, transport and construction. He also owns Air Bagan, which dominates domestic air travel inside Burma.

In early September, The Irrawaddy received information from junta officials that most of the telecommunication services of the Ministry of Communications, Posts and Telegraphs in Burma will be taken over by the Htoo Group. Tay Za is among a group of four businessmen who will be allowed to open new private banks in Burma ahead of the Nov. 7 general election. The quadrumvirate run conglomerates and are considered top beneficiaries of a wave of privatization in which about 300 state assets, including everything from real estate to ports, shipping companies and an airline were sold amid growing Chinese, Indian, Thai and Singaporean investment in the military-run country.

Tay Za has worked side-by-side with Aung Thet Mann, the son of ex-Gen Shwe Mann, who is the third-ranked figure in the ruling junta and a possible president of the country after the November elections.

The upcoming election is expected to be dominated by the Union Solidarity and Development Party (USDP) and the National Unity Party (NUP), two junta-linked parties who will contest most or all of the 1,096 constituencies across the country at regional, lower and upper house levels. A number of businessmen close to the military government will run as election candidates for the USDP.

http://www.irrawaddy.org/highlight.php?art_id=18909

In a May 19 court judgment that went almost unnoticed, Pye Phyo Tay Za, the son of junta-linked businessman Tay Za, lost a legal bid to have EU sanctions against him overturned and was ordered to pay the court costs for the Council of the European Union.

Pye Phyo had argued that he is neither a member of Burma’s military government nor associated with it, and does not benefit from “the administration of that government.” His lawyers, London-based law firm Carter-Ruck, claimed that “neither the applicant [Pye Phyo] nor his father received any benefits from the regime.”

But Tay Za is widely-regarded as having built a multifaceted, multi-billion dollar business empire based on close connections with Burma’s ruling military, including junta-chief Snr-Gen Than Shwe.

And in a statement that may have undermined Pye Phyo’s own case, his lawyers also argued that, “the fact that the applicant is the son of a person whom the Council considers to have benefited from the military regime of Myanmar [Burma] does not give him the requisite connection with that regime.”

Similarly, Pye Phyo claimed that his two-year shareholding in two of Tay Za’s Singapore-listed companies, “does not show that he benefited from any advantages that his father’s companies may have received from the military regime in Myanmar.”

In rebutting the contention that neither Tay Za nor his son Pye Phyo benefit from the regime, the opposing lawyers said: “As regards family members of such leading business figures, it may be presumed that they benefit from the functions exercised by those businessmen, so that there is nothing to prevent the conclusion that such family members also benefit from the economic policies of the government.”

In light of fears that Pye Phyo’s attempt to have EU sanctions against him lifted was a ruse to enable Tay Za to find a way around sanctions, the Council said that, “the applicant was aware of the reasons for which such restrictive measures specifically apply to him, since he states in paragraph 37 of the originating application that there may be a risk of his father circumventing the freeze on his own assets by transferring his funds to other family members.”

Pye Phyo contended that he “does not frustrate the process of national reconciliation, respect for human rights or the democratization of Myanmar,” reminding the Council that he has not been involved in politics or government inside Burma.

But his younger brother, Htet Tay Za, reportedly bragged in a notorious 2007 email, sent in response to new US sanctions on the junta, that even though “the US bans us, we’re still [expletive deleted] cool in Singapore. We’re sitting on the whole Burma GDP. We’ve got timber, gems and gas to be sold to other countries like Singapore, China, India and Russia.”

Tay Za often flies to Singapore on business, where both Pye Pho and Htet were schooled. Two large banks in the city-state—OCBC and DBS—have denied functioning as repositories for billions of dollars of gas revenues derived from the Yadana pipeline project.

According to Mark Farmaner of the Burma Campaign UK, the case and outcome “gives an indication that stronger, carefully targeted sanctions could have an impact,” but adds that carrots should be put on the table as well as an incentive toward reform.

EU sanctions on Burma were renewed under the rubric of the “Common Position” recently. The measures are criticized for being weak and insufficiently-well targeted in some quarters, while elsewhere it is argued that sanctions have not pushed the junta toward reform, and so a new “engagement” approach is needed.

Still others say that it is not sanctions per se that are the problem, but the role of government and business in China, India, Thailand, Singapore and Malaysia, all of which offer political and commercial alternatives to the junta and thereby undermine the sanctions.

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