Will Ireland Become The World's Richest Country?

when the U.S housing bubble burst in 2007 sending the world into a recession Ireland was one of the country's hit hardest biggest real estate bubble of any place in the world housing prices fell a staggering 56 percent defaults Nationwide caused Banks to go into crisis and layoffs were rampant the Irish economy shrank by almost 25 percent and it was on the verge of total collapse it managed to secure a bailout from the IMF for 67 billion dollars which helped things from totally falling apart and yet in 2013 it was still struggling but then a very odd thing happened over the past decade Ireland has gone from one of the poorest countries in the world to one of the richest according to the international monetary fund Ireland is currently the second richest country in the world in the last eight years it has leapfrogged larger Nations like the U.S and Rich nation-states like Qatar in 2021 it had a GDP per cap of a hundred and one thousand five hundred nine dollars but based on everything we know about economics that should not have happened after the global housing crisis of 2007 Ireland was on the brink of collapse but in the last few years it's been growing at an unbelievably High rate that is only seen in developing countries Ireland doesn't have huge oil reserves like Norway or countries in the Middle East it also doesn't have traditional wealth that has rebounded as with countries like Switzerland and it's not a tiny Nation like Luxembourg whose small population helps keep per capita GDP much bigger so what's really going on Ireland has a long history of economic struggles dating back hundreds of years before it gained independence from England it had a series of famets that wreaked havoc on the people the most well-known was the great hunger in the mid-1840s roughly a million people died and another million fled the country things didn't get any better after they gained independence from the British in 1922 while iron Island had earned Freedom it suddenly found itself in a dire situation economically up until then it was a country primarily consisting of subsistence Farmers there was very little economic infrastructure set up at all and the only trade it had previously done was with its now sworn enemy England so at that point the only immediate expansion it could hope to have was by growing its agriculture industry and hoped to begin trade with other countries but archaic land ownership laws made that increasingly tricky basically when a farm owner died the land was automatically and by law divided up between his sons that meant any farm that could potentially experience growth was suddenly made up of multiple Farms a fraction of the size as the Great Depression era descended on the world Ireland was in no position to grow its economy because like most countries globally it was suffering from the devastation of the depression however they soon noticed one country in particular was seen to do okay the USSR since the USSR had a strictly isolationist trade and economic policy it was somewhat more immune to the dips and bumps of the global economy so the Irish government decided they'd adopt that kind of Economic Policy rather than try to take advantage of its ability to make moves outside the British Monarchy and set up trade relationships with countries around the world they adopted a strict USSR style isolationist system the government banned foreign investment and seized any major corporations it could find this was a poor decision for many reasons one the USSR already had enough resources and was so big it could afford to be isolationist especially in a time of depression Ireland on the other hand wasn't set up for that kind of going its solo policy it didn't have the kind of mass agricultural food production it needed to fully subsist on its own and even if it had there wasn't enough of a domestic Workforce to provide the country with the industries it needed and as economists have long pointed out isolationist economic policies will most often lead to disaster in the long run regardless of where a country started so Ireland slid into an even worse economic situation than it had been before independence things got so bad half a million Irish citizens fled the country and what's worse when the world experienced an economic boom after WW2 Ireland missed out on it because of its existing protectionist policies speaking of Boom why don't you smash down that subscribe button while you're here after missing out on this boom Ireland's government finally realized they needed to change things up so in 1958 they adopted sweeping changes to their economic policies they began allowing corporations held by the state to become privatized again and they lifted the bans on trade and foreign investment they also set up the Shannon free trade zone where foreign companies received special tax incentives on both their profits and their Workforce it was the first free trade zone in the modern world a place where goods and profits were given specific and advantageous Customs regulations in other words it was a great place for multinational corporations to operate from Ireland also made big cuts to its corporate tax rates and gave out substantial grants to companies that incentivized investment huge multinational businesses like Intel and De Beers eventually took advantage of this policy creating new industries in Ireland and helping turn things around the Irish economy saw notable growth in these years for the first time ever it also invested in education by passing the 1967 free education scheme helping education in the country grow in Leaps and Bounds but sadly this boom was short-lived in the 1970s and 80s they were hit with a perfect storm of factors for starters the government had overspent and was too leveraged then with the two Global oil crises one in 1973 and won in 1979. Ireland was unequipped to absorb the economic repercussions plus while it had slowly begun to Branch out with international trade it still relied too heavily on the economy of the UK add to all that some strikes by Irish Banks and Rising taxes on the middle class and suddenly Ireland's economy tanked the following year saw unemployment popping up over 20 percent currency inflation and public debt to combat this Ireland reached back into its own Playbook and enacted similar policies like lowering tax rates for corporations and drastically reducing taxes on the Irish Workforce to the ones they tried in 1958 they went a step further by removing the restrictions on firing Irish workers previously Ireland had sought to keep Irish jobs by making it extremely difficult for foreign companies to fire local workers but ultimately this stifled foreign investment so now companies could hire and fire much more freely all of these moves worked in a big way Ireland soon found itself in a second economic boom and became the third most business-friendly country globally it had a dramatic leap going from one of the poorest countries in the world to one of the richest in only a decade this was enhanced when the EU was formed and Ireland became a member it now had access to trade with all the other members and the value of its exports especially agricultural ones suddenly shot up and it was able to attract even more multinational corporations to invest companies from the U.S also began seeing the appeal of setting up shop in Ireland in particular because its Workforce was fairly well educated and English-speaking that made it ideal for Industries like Tech Healthcare and finance these companies were also helped by not having to pay taxes in their home countries because technically the profit was made in Ireland so they just kept their money in Irish Banks and that meant more and more money was circulating in the local economy sadly this all took a drastic turn for the worse with the recession in 2008 the cost of living in Ireland skyrocketed the economy tanked and by 2013 it seemed as if the era of Irish Prosperity was over and yet something rather bizarre happened starting in 2015. that year the Irish economy grew at a rate that was double the growth of any other country in the world this didn't make sense and investigations commenced it turned out huge companies like apple had sent a ton of money to their Irish subsidiaries because of the tax benefits they'd get so this money wasn't really a part of the Irish economy it was merely there on paper Ireland was the biggest tax Haven on the planet so corporations were using it as a big bank and avoiding domestic taxes on their large profits they were using somewhat Shady trade and tax policies to encourage investment and even when they were forced to change those there weren't really any penalties or ramifications and in fact it's helped their economy keep growing so Ireland basically got incredibly lucky and it's now on Pace to potentially be the richest country in the world with the economic misery Ireland has had over the centuries it doesn't seem right to lean into the old Luck of the Irish Mantra and yet at the moment it seems like Ireland is experiencing a boom unlike any in its history and it has both sound economic decisions and some luck to thank for that have any thoughts about the future of the Irish economy pop them in the comments section why don't you smash down that subscribe button while you're here foreign [Music] [Music]

Channel: TheRichest

Views: 26,818

Keywords: 2008 Crisis, Celtic Phoenix, Economic Growth, Economic History, Economic Policies, Global Economy, Great Depression, Ireland, Irish Economy, Irish Independence, Multinational Corporations, Rapid Growth, Richest Country, Tax Haven, The Richest

Id: UDTW_kiF2u0

Length: 10min 5sec (605 seconds)

Published: Fri May 05 2023

Reddit Comments

[u/Pointlessillism]

Would love to stick it to the Luxembourgois

[u/90000001127]

How are we this rich and I don't know if the bus is even gonna show up to take me away from the house I'll never own, to the hospital to wait 16 hours for triage?

[u/Upstairs-Zebra633]

We could Inherit the wealth of the world and still have the shittest infrastructure In Europe

[u/rAuldwan]

Where is the benefit to the ordinary worker in all this wealth? Just makes us look more disgraceful.

[u/Brilliant-Tea-800]

We dont have politicians of vision and leadership. Lemass is probably the only example.

Imstead we have egos and managers.

[u/slowrabbit1955]

Ireland is all fur coat and no knickers

[u/Kyadagum_Dulgadee]

On paper maybe, but it feels like we're some guy paid to live in an empty mansion so no one can claim squatter's rights, rather than someone who is actually wealthy.

[u/TheYoungWan]

If richest correlates to most expensive, then sure go for it

[u/lockdown_lard]

So there's this recurring problem with the word "rich".

Most people use it to refer to wealth.

But occasionally people use it to refer to income per capita. Which is not what most people understand by wealth.

If I've got €1 in the bank, and an income of €60k;

and my mate Farah has got €1,000,000 in investments & banks, and an income of €30k;

then I've got double the income of Farah, but Farah is clearly richer than me.

And if Farah's income is real, but €20k of my income is accounting-trickery and isn't real, then my income is still higher than Farah's, but it's not really double. Similarly, for Ireland, our GDP per capita is much more inflated than for most other countries, by accounting tricks of multinationals.

So, Ireland has a fictitious high income per capita, and low material wealth.

It also also relatively low capital per person in several non-financial meanings of the word capital. For example, we have extremely low natural capital: our biodiversity is heavily degraded, our countryside largely industrialised by the dairy industry. And we have some low institutional capital: our institutions are relatively poor-performing compared to other countries in the western half of the EU.

On the other hand, we have very high educational capital (well-educated population) and high social capital (high social cohesiveness).