What caused the economic boom in Ireland over the last two decades? Was it a case of real development, or was it in some way illusory as has been suggested by some commentators?

Introduction

Ireland is a trading nation with a global perspective. Its economy is perceived as one of the most globalised in the modern world. The country has benefited enormously from foreign direct investment and extensive external trade. Ireland is in a fortunate position as having one of the world’s most dynamic open economies. It has boasted annual economic growth rates during the “celtic tiger” boom years in excess of averages for the rest of the developed world. (Enterprise Ireland 2006) By the end of the year 2000, Ireland could boast fourteen years of continued economic growth. (Burnham 2003) This translated into an economy that boasted one of the lowest unemployment rates in the EU. The ruling government were in a position of a growing government surplus and a low inflation rate. (Burnham 2003) Record growth was recorded during the 90’s, and with a 10% average rate for the years 1997-2000. (Enterprise Ireland 2006) This has catapulted Ireland from being one of the poorest economies in the EU, to one of the wealthiest. GDP per capita for the year 2005, was equivalent to €38,000. This was only second to Luxembourg in the EU. This is in contrast to the mid 1980’s when Ireland’s unemployment rate was 17%, the government’s finances were chaotic and many Irish citizens saw emigration as the norm. A transformation of the economy, which included changes in fiscal policy and policies in relation to tax, education and telecommunications were put into position in order to kick-start the economy. (Burnham 2003)

These and many other factors contributed to the past two decades of economic prosperity. These factors must be closely examined to determine if the economic boom of the past