THE IRISH MIRACLE

Chris Edwards of the CATO Institute wrote an article on Irish emerald economic success in the past decade. He says:

"And Ireland has steadily reduced its tax rates. The top individual income tax rate was cut from 65 percent in 1985 to 42 percent today. The capital-gains tax rate was cut from 40 to 20 percent in 1999. However, the key to Ireland’s success has been its excellent tax climate for business. In 1980, Ireland established a corporate tax rate for manufacturing of just ten percent. That low rate was subsequently extended to high-technology, financial services, and other industries. More recently, Ireland established a flat 12.5 percent tax rate on all corporations — one of the lowest rates in the world, and just one-third of the U.S. rate."


I posted a piece on Irish economic success story last year.

Sunset over Shannon river

The father of the German economic miracle once hit the essence of economic miracle and economic policy: "Es gibt aber kein Wirtschaftswunder, aber richtige Wirtschafstpolitik."

"Irish miracle" is on a good way to become a global hard-hitting trademark.

When dr. Paul Walsh visited Ljubljana where he gave a lecture on Irish path towards economic prosperity, it was quite clear that in Slovenia hardly anyone is actually even thinking about the macroeconomic and structural policy that could pursue global economic success of this small country in the heart of Europe. Approximately 10 individuals listened to dr. Paul Walsh of Dublin's Trinity college. It was quite clear why Slovenia will probably never imported the spirit of Irish success story.

Last time, I heared:

"Perhaps Ireland could be a global sightspot but the standard of living is much better in Slovenia than in many other countries, including Ireland."

Contrary to this popular belief, the Economist composed "A quality-of-live" index, measuring several factors that determine the quality of live such as material well-being and the level of freedom. On a scale of one to 10, Ireland achieved 8.33 points, with Switzerland coming in at 8.07. Despite being flattered by its inhabitants, Slovenia achieved 6,98 points resulted in 27th place.

The driving force behind the Irish economic miracle is a double layer that consists of right set of solutions and decisions in economic policy focused on attracting foreign direct investment, cutting marginal tax rates on productive behavior and creating a favorable atmosphere for business environment. On the other hand, multinational and domestic business and entrepreneurial sector played a crucial role in the transition of the economy. Consequently, Irish export sector is known for its competitiveness, diversified entrepreneurial market strategies, high tech, and knowledge-intensive industry.

Some comparative statistics can be seen here.

Last Satuday, we celebrated Irish National holiday, St. Patrick's day, when we wear green, drink our faihful, loyal and always beloved Guinness and enjoy talking to our friends and loved ones. After taking a closer look at entrepreneurial dynamics, stock market performance, healthy macroeconomic policy and ambitious structural agenda, it is not difficult to find out that Ireland has a reason to celebrate.