The Celtic Tiger Is Not Extinct

Anthony B. Kim / March 01, 2011

Ireland’s general election last Friday demonstrated, among other things, that Irish voters have been frustrated by the partial takeover of the country’s economic sovereignty by the European Union and the International Monetary Fund, and by calls to unwind some of the positive economic reforms of the past. Rejecting a major change of course, the Irish people, anxious to get their Celtic tiger back on its feet, gave a surprising (to outsiders) election victory to the party (Fine Gael) that campaigned on a platform of low taxes, pro-business regulations, and a renegotiation of the existing bailout deal with the EU and the IMF.

In fact, the Irish economy remains well-equipped for recovery with sound economic institutions and a high level of economic flexibility and openness. Unlike other euro-zone economies such as Greece and Portugal, where economic freedoms are feeble, the Irish economy, as the Economist magazine recently pointed out, is regaining competitiveness by reducing unit labor costs, and exports are booming. The workforce is well-educated and entrepreneurial, and according to a recent study by a special division of the Financial Times, in 2010 Ireland was the second most favored foreign direct investment destination globally, with the number of projects coming to the country increasing by an astounding 15 percent. (more…)