Ireland’s Tiger Economy Was Not Driven by the Fdi
Ireland’s Tiger Economy was not driven by the FDI
Summary: The unprecedented revival of the economy in Ireland between 1990 and 2000 has raised a hot debate around the world centers on whether the boom of the economy is mainly driven by the FDI and whether the growth can be sustained by this government policy. Although most of people contributed the success to the FDI I strongly believe that the Celtic Tiger is not due to the FDI and in fact the policy will not help sustain the growth of Ireland’s economy. The government should emphasize on the building of structurally strong Irish companies.
Economic Environment * In 1987, Ireland was the poorest member of the EEC * Unemployment topped 17% and GDP per capita was 69% of the EEC average * Debt consumed a third of the government revenue * Intellectuals flooded out the country in search for employment * The resurgence of the Ireland’s economy in the twenties century. * GDP growth reached 10% with an average of 6.3% while unemployment had plummeted to 5% * The government revenue increased dramatically and the debt was clear * Emigrant returned in droves * At the same time most of the world has been though an economic growth driven by the longest bull market in the US * The industry IDA targeted in the US has been though a unparalleled boom * IDA was formed in 1949 as a government agency to attract new investment around the world * The IDA successfully attracted FDI to Ireland. * The IDA also served to reposition the economy of the country
FDI was not the main reason of the boom * Linkages with foreign subsidiaries and local industry were limited * From 1986 to 1995 the Irish raw materials as a percentage of total raw material purchase was only less than 20% and has been proved cannot pass this ceiling. (Case Exhibit 6) * MNCs had no choice but to source supplies from overseas since indigenous supplies
Summary: The unprecedented revival of the economy in Ireland between 1990 and 2000 has raised a hot debate around the world centers on whether the boom of the economy is mainly driven by the FDI and whether the growth can be sustained by this government policy. Although most of people contributed the success to the FDI I strongly believe that the Celtic Tiger is not due to the FDI and in fact the policy will not help sustain the growth of Ireland’s economy. The government should emphasize on the building of structurally strong Irish companies.
Economic Environment * In 1987, Ireland was the poorest member of the EEC * Unemployment topped 17% and GDP per capita was 69% of the EEC average * Debt consumed a third of the government revenue * Intellectuals flooded out the country in search for employment * The resurgence of the Ireland’s economy in the twenties century. * GDP growth reached 10% with an average of 6.3% while unemployment had plummeted to 5% * The government revenue increased dramatically and the debt was clear * Emigrant returned in droves * At the same time most of the world has been though an economic growth driven by the longest bull market in the US * The industry IDA targeted in the US has been though a unparalleled boom * IDA was formed in 1949 as a government agency to attract new investment around the world * The IDA successfully attracted FDI to Ireland. * The IDA also served to reposition the economy of the country
FDI was not the main reason of the boom * Linkages with foreign subsidiaries and local industry were limited * From 1986 to 1995 the Irish raw materials as a percentage of total raw material purchase was only less than 20% and has been proved cannot pass this ceiling. (Case Exhibit 6) * MNCs had no choice but to source supplies from overseas since indigenous supplies