IRELAND - The Celtic Tiger - a Winning Economy

Italian translation, Portuguese translation, Gaelic translation

By Paul Tobin, CBS James's Street, Dublin, IRELAND, 1997

Contribution to the EDUVINET "Living Conditions of EU Citizen" subject

"The above text was taken from material available on the internet particularly at, from Ireland from CIA World Factbook, 1994, and form an article by Garret FitzGerald available at"



53 00 N, 8 00 W -- Western Europe, occupying five-sixths of the island of Ireland in the North Atlantic Ocean, west of Great Britain

Geographic coordinates:

53 00 N, 8 00 W

Map references:



total area: 70,280 sq km
land area: 68,890 sq km

Land boundaries:

total: 360 km

border country:

UK 360 km


1,448 km

Maritime claims:

continental shelf: not specified
exclusive fishing zone: 200 nm
territorial sea: 12 nm

International disputes:

Northern Ireland question with the UK; Rockall continental shelf dispute involving Denmark, Iceland, and the UK (Ireland and the UK have signed a boundary agreement in the Rockall area)


temperate maritime; modified by North Atlantic Current; mild winters, cool summers; consistently humid; overcast about half the time


mostly level to rolling interior plain surrounded by rugged hills and low mountains; sea cliffs on west coast

lowest point:

Atlantic Ocean 0 m

highest point:

Carrauntoohill 1,041 m

Natural resources:

zinc, lead, natural gas, petroleum, barite, copper, gypsum, limestone, dolomite, peat, silver

Land use:

arable land: 14%
permanent crops: 0%
meadows and pastures: 71%
forest and woodland: 5%
other: 10%


current issues:

water pollution, especially of lakes, from agricultural runoff

international agreements:

party to - Air Pollution, Air Pollution-Nitrogen Oxides, Climate Change, Environmental Modification, Hazardous Wastes, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Tropical Timber 83, Wetlands, Whaling; signed, but not ratified - Air Pollution-Sulphur 94, Biodiversity, Desertification, Endangered Species, Law of the Sea, Marine Life Conservation

Geographic note:

strategic location on major air and sea routes between North America and northern Europe; over 40% of the population resides within 60 miles of Dublin



3,566,833 (July 1996 est.)
Age structure:
0-14 years:
15-64 years:
65 years and over:

23% (male 424,558; female 402,062)
65% (male 1,175,383; female 1,157,960)
12% (male 173,150; female 233,720) (July 1996 est.)
Population growth rate:

-0.22% (1996 est.)

Birth rate:

13.22 births/1,000 population (1996 est.)

Death rate:

8.93 deaths/1,000 population (1996 est.)

Net migration rate:

-6.46 migrant(s)/1,000 population (1996 est.)

Sex ratio:
at birth:
under 15 years:
15-64 years:
65 years and over:
all ages:

1.07 male(s)/female
1.06 male(s)/female
1.02 male(s)/female
0.74 male(s)/female
0.99 male(s)/female (1996 est.)
Infant mortality rate:

6.4 deaths/1,000 live births (1996 est.)

Life expectancy at birth:
total population:

75.58 years
72.88 years
78.46 years (1996 est.)
Total fertility rate:

1.83 children born/woman (1996 est.)


Roman Catholic 93%, Anglican 3%, none 1%, unknown 2%, other 1% (1981)


Irish (Gaelic), spoken mainly in areas located along the western seaboard, English is the language generally used


age 15 and over can read and write (1981 est.)

total population:


6 December 1921 (from UK)

National holiday:

Saint Patrick's Day, 17 March


29 December 1937; adopted 1 July 1937 by plebiscite

Legal system:

based on English common law, substantially modified by indigenous concepts; judicial review of legislative acts in Supreme Court; has not accepted compulsory ICJ jurisdiction


18 years of age; universal



FOR THE ECONOMIC MIRACLE Ireland has to thank its forward-looking business people and the commitment of past governments and especially its EMU membership. Ireland remains strongly committed to the European Ideal.

The probability of Ireland joining EMU from the beginning date remains quite high. Nevertheless, the close relationship of Ireland and Britain does pose somewhat of a problem for the future of Ireland and its committment to EMU. Certainly, Ireland continues to perform very well on its economic fiscal front. However, Ireland's debt/GDP ratio remains quite high within the EU. Still this has improved greatly over the past 10 years thanks to an aggressive tax policy designed to attract business from around the world. As a result, debt/GDP has decline from the staggering level of 116% in 1987 down to a projected 73%-75% level by the end of 1996.
Curently, fiscal budget for 1997 included significant tax cuts keeping up the supply-side economic policies that have worked so well for Ireland. Still, the General Government Deficit is projected to come in around only 1.5% of GDP.
While this is a slight rise from the previous year's deficit of 1% of GDP, Ireland is still well within the guidlines of the Treaty criteria making this nation the true jewel within Europe. It is possible to see strong economic growth at least into mid 1998, which should allow the projected deficit to be achieved and thus the debt/GDP ratio may fall further to under the 70% by the end of 1997.

There is little doubt that Ireland has a few problems relative to the EU. Ironically, it has been the economic success of Ireland that has cause significant international investment to pour into the country leaving the rest of Europe behind. Concerns on the Continent have also aided in a capital flight into the UK and Ireland. The Irish pound has risen sharply even against sterling and now it stands at nearly 10% above the weakest currency in the EU system. In terms of the exchange rate criteria, the strong Irish currency has posed somewhat of a problem.

Politically, Ireland must eventually decide if it will enter on the first round in 1999 into EMU given the fact that Britain is most likely not going to enter until the second round. The current government in Ireland does remain completely committed to EMU membership. However, with a general election due before the end of 1997, we could find that Ireland takes a second look at joining without Britain and the effect that might have on its own economy. It would appear that if Ireland does join in 1999, all the attractions and advantages for international investment into this nation will come to a sudden and dramatic end. This would tend to imply that the economy in Ireland is reaching a peak in growth and that the future will be drastically different than the experience of the past 10 years.

1995 1996e 1997f
ERM Member Y Y Y
Inflation 2.5 1.6 2.4
Budget Deficit / GDP 2.4 1.0 1.5
Debt / GDP 81.6 73.3 68
10Y Bond Yields 8.2 6.7 6.7
f=forecast, e=estimate


A winning economy

A rewarding investment

Low tax and generous incentives

Availability of skilled labour

Low costs

World class sub-supply

State-of-the-art telecommunications

Sophisticated transport logistics

Good quality of life

Strong supports on the ground


Ireland is one of the most attractive locations for investment by electronics companies because of its sub-supply base, excellent skills and low operating costs. Since 1980, 40% of all US new inward investment in European electronics has come to Ireland

Over 300 companies are engaged in the development, marketing and manufacture of a wide range of leading edge products, in a diversity of sectors, from wafer design and fabrication, systems, components and peripherals to communications, networks and software.

They play a major role in Ireland's economy. Almost a third of the PCs sold in Europe come from companies based in Ireland. Exports of electronics products account for a third of Ireland's total exports.

Many electronics companies are increasingly engaged in complementary activities, such as software development, technical support and customer care. Companies such as IBM, Fujitsu, Motorola and DEC have seized the opportunity afforded by the availability in Ireland of highly skilled computer science graduates.

"The facility (in Ireland) has worked out even better than we had hoped...the productivity and quality of the product coming out of there are second to none."
Gordon Moore,Chairman, Intel Corporation

"The low cost way to support European customers is from a single site...Dell pioneered the trend by centralising European logistics and customer support in Ireland, which offers one of the lowest cost and most flexible working environments in Europe"
Michael Dell, President & Chief Executive, Dell Computers


Established in 1987, Dublin's International Financial Services Centre (IFSC) has developed into a significant world financial centre. A wide range of internationally traded financial services companies are licensed to trade there in activities ranging from banking and mutual fund management to corporate treasury and captive insurance.

The centre is serviced by an extensive network of major international banks, brokerages and professional advisors. Leading corporates, such as IBM, Coca Cola, Hewlett-Packard and Pfizer, have established operations there.

Altogether, over 400 of the world's leading financial institutions have set up new operations in the IFSC. They include finance houses such as Citibank, Merrill Lynch, Mitsubishi Trust & Bank, Daiwa, Deutsche, AIG and ABN Amro. IFSC operations benefit from a 10% corporation tax rate which is supported by an excellent tax treaty network and an efficient regulatory environment.

"We are delighted to be re-inforcing our long-standing relationship with the Republic of Ireland through our plans to establish a new capital markets operation. The availability of a skilled and well-educated labour force and the favourable business environment created by the Irish Government make this endeavour a natural fit."
Daniel P Tully, Chairman & CEO, Merrill Lynch

"There is a good problem-solving attitude from anyone involved in the process in Dublin. The authorities have been accessible and very helpful"
Jean Louis de Gandt, Director, IBM International Treasury Services


The availability of well-educated and highly skilled young staff, language skills, competitively priced state-of-the-art telecommunications and generous tax incentives have made Ireland the preferred location for companies engaged in a diversity of international services. These range from software development and production, multimedia and film to data processing, shared services, information services, laboratory and testing services.

Ireland is the capital of Europe for software localisation and production. Five of the world's top 10 independent software companies have major operations in Ireland and today over 40% of all PC packaged software and 60% of business application software sold in Europe is produced here.

Ireland is the top location in Europe for companies which provide telemarketing, customer support and technical services through call centres. Ireland's undisputed leadership in the newly emerging pan-European call centre business is a direct result of a well-focused and co-ordinated effort by Government agencies and Telecom Ireland, the national telecommunications supplier. It is a good example of the 'can do' attitude to be found throughout Ireland.

"Establishing Microsoft's European Operations Centre in Dublin is proving to be the best strategy we could have pursued. The combination of great telecommunications, a young motivated workforce and tremendous government support ensures our continued success well into the future.'"
Richard Post, General Manager, European Operations Centre, Microsoft

"When we weighed all of the factors involved, Ireland was the clear winner."
Geoff Obeney, MIS Director, Gateway 2000


Ireland has invested US$5 billion in recent years to give it one of the most advanced 'feature rich' networks in Europe. With diverse fibre optic connections on all major European routes, it delivers crystal clear connections worldwide. Features include, for example, an intercontinental routing service designed for companies with international call centres which provides a toll-free capability between Europe and the US. Ireland's sophisticated telecommunications system enables companies to: achieve economies by centralising their European administraion in Ireland; link design and development engineers, scientists and other R&D personnel across the globe for conferencing and real time development activities; provide marketing and customer support by telephone throughout Europe from a single call centre.

Ireland enjoys the lowest cost in Europe for toll-free services when discounts for volume users are taken into account. It is the stated objective of Telecom Ireland to remain the lowest cost service provider in Europe for international traffic.


Ireland has an abundance of well-educated young people who are keen to embrace change. This represents an important competitive advantage for employers which is set to continue. In the year 2000, four out of every 10 people in Ireland will be under 25 years of age.

The quality of Ireland's education is exceptionally high. The independent IMD World Competitiveness Report ranks Ireland as one of the best in Europe for the quality of education which everyone receives. Six out of every 10 of Ireland's third level students major in engineering, science or business studies. While Ireland is an English speaking country, a significant proportion of students and graduates are proficient in more than one language. Companies establishing here have also found that young Irish people working and living elsewhere in Europe are keen to secure employment in Ireland.

Universities and colleges in Ireland have a strong tradition of collaboration with industry, particular in emerging high technology sectors, and maintain strong links with companies and other educational establishments throughout the world. It means that for many young graduates the transition from their academic studies to the workplace is a simple, natural progression. Furthermore, many young graduates work abroad following their studies in order to gain experience before returning to embark on their careers at home.

In Ireland there is a strong work ethos and an enthusiasm for 'getting things done'. This is reflected in the rate of employee turnover which is well below the European average. It means that employers enjoy greater commitment from their workforces, have higher proportions of appropriately experienced personnel and incur lower annual training costs.

The quality of Ireland's educational system, the availability and flexibility of a young workforce and the low rate of employee turnover combine to deliver true competitive advantage to business in Ireland. All these factors result in Ireland offering the best availability of skilled labour in the world.


Profits derived from manufacturing and qualifying services are subject to a tax rate of 10%, which will apply until at least 31st December 2010. They can be freely repatriated and are not subject to withholding taxes. For companies engaged in R&D, patent royalty income on products developed in Ireland is tax free.

Generous grants towards start-up costs, including capital investment, training and employment costs, are available, as are grants towards investment in R&D projects.


The costs of operating in Ireland, including employment costs, are lower than in most other European countries. This advantage is enhanced by the ready availability of a more productive and flexible workforce. Low rates of staff turnover deliver productivity benefits and savings on training costs.

The cost of telecommunications is increasingly a key consideration for international investors. Ireland enjoys one of the lowest tariffs in Europe. It is, for example, the most competitive country for pan-European toll-free services when volume-user discounts are taken into account.

Ireland is set to remain a competitive cost base for business. The rate of inflation in Ireland has consistently been amongst the lowest in both the European Union and the OECD over the past decade. Between 1986 and 1995 inflation averaged about 2.35% per annum and this trend is forecast to continue.


A strong, high quality support structure has developed in Ireland to meet the ever growing needs of industry. This includes a comprehensive range of competitive specialist suppliers which have emerged in recent years to meet the exacting requirements of companies engaged in hightech sectors, such as electronics, software, pharmaceuticals and healthcare products.

Support companies in Ireland operate to the highest international standards, such as ISO 9000. In keeping with the export orientation of industry in Ireland, many sub-supply companies provide their companies throughout Europe and the wider world as well as to customers located here.

Services available to software companies include disk and CD manufacturing, mastering and duplication, user manual printing, packaging, turnkey and fulfilment services and technical support. Specialists in clean room and sterilisation services support the activities of companies in the pharmaceutical and healthcare products sector.


Ireland affords an exceptionally good quality of life for people working here. High quality education is available for pupils of all ages. Schools and colleges are available to meet the specific needs of visting students. While Ireland's cities are cosmopolitan and sociable, unspoiled countryside and spectacular scenery is always nearby. Residents enjoy ready access to a full and varied range of leisure activities, from theatre and restaurants to golf, horse riding and fishing.


IDA Ireland is the Irish government agency which ensures that overseas companies establishing or expanding their operations in Ireland receive the best advice and assistance. Ireland offers such investors a highly competitive package of investment supports. IDA Ireland provides its services through dedicated teams of industry specialists in 14 offices worldwide.

IDA Ireland co-ordinates all the services and supports needed to ensure that your start-up or expansion is trouble-free and efficient-and experienced and professional 'one-stop-shop' to anticipate and meet your needs.


Leading engineering companies from throughout the world have been attracted to Ireland, where they are engaged in a diverse range of activities. Automotive components and aerospace technology are two of the most important and rapidly growing sectors in Ireland today.

Ireland exports close to US$1 billion worth of automotive components every year to customers in Europe, the US and the Far East. The products manufactured range from turbochargers by Allied Signal and mirror glass to cable harnesses by Kromberg & Schubert.

In the aerospace sector leading international companies with operations in Ireland include Pratt & Whitney, Westinghouse, Moog and Sifco Turbine. Their activities range from airframe and jet engine maintenance to sophisticated electronic sub-assemblies.

A highly trained and experienced workforce of designers, toolmakers and engineers, using the latest technology in CAD/CAM and CNC equipment, has earned Ireland an international reputation for excellence in toolmaking.

"The skillbase within the Irish workforce has been utilised by Thermo King at its manufacturing locations in Galway and Dublin. These skills, coupled with a highly technical education base, in an environment of flexibility and teamwork, has been recognised by our parent, Westinghouse, both locally and internationally."
Christy Hayes, Managing Director, Thermo King Europe

"We have grown here from a small company involved in manual assembly to a highly automated plant, with its own R&D department, which manufactures products that are at the forefront of applied new technology. We are now a major employer and expect to continue growing"
Christopher Sanders,Managing Director,Kostal


Ireland has a well-deserved reputation for craftsmanship and attention to detail. Waterford Glass, for example, is renowned for its fine crystal. Many international companies have taken advantage of Ireland's competitive cost and skill base for their own consumer product activities.

These range from top quality writing instruments crafted by AT Cross to games made by Hasbro. Leading clothing company Fruit of the Loom makes casual wear in Ireland in Europe's largest vertically integrated knitwear facility.

In household products Braun, part of the US Gillete Group, loudspeaker manufacturer Bose and kitchen appliance company Krups all gain European competitive advantage by manufacturing in Ireland..

"There is tremendous teamwork and fantastic stability in Ireland. Most people hired 13 years ago are still with the company. They take pride in their job and the work ethic is great. Ireland is a very easy place to do business."
Tom Beeson,Vice President-Manufacturing , Bose Corporation

"We have a well educated workforce due to a high calibre education system and in-house training programme. It is vital that we develop, implement and support the most up-to-date manufacturing systems in order to remain competitive in a global manufacturing environment. I have full confidence that we will meet the challenge."
HJ Dittombee, Managing Director, Braun Ireland


Pharmaceutical and medical products companies from around the world use Ireland as a base for developing, manufacturing and marketing a diverse range of products, from analgesics to disposable contact lenses. Between them they generate US$6 billion of exports every year.

Thirteen of the world's top pharmaceutical companies and 10 of the world's top 15 medical products companies have operations in Ireland.

They are attracted by the availability of highly skilled staff, the responsive attitude of regulatory authorities to their needs and the high quality of supply services. Many companies have shown their satisfaction with Ireland as a base in the most tangible way of all, by re-investing. American Home Products and Abbott Laboratories each have five operations in Ireland, while Johnson & Johnson and Pfizer have three each.

"Ireland places great emphasis on higher education, providing us with the college and university graduates required in our biotechnology operations."
Robert P Luciano, Chairman, President & CEO, Schering-Plough Corporation

"We looked hard at a number of European locations. What made the difference for Ireland was the infrastructure, the spirit of co-operation here...and most of all the availability of skilled personnel."
Donald Robinson, Director-Corporate Engineering, Boston Scientific BR

Speaking at a news conference in the House of Commons,24 October 1996, the leader of the Scottish National Party Mr Alex Salmond MP published research information from the Commons Library which states that, on current growth trends, Ireland will overtake the UK in terms of gross domestic product (GDP) per head by the year 2000.

"On current growth levels, Ireland will become more prosperous than the UK by the year 2000, in terms of gross domestic product per head. They have already overtaken Wales and Northern Ireland.

But compared to Scotland, Ireland has next to no resources. They have used their imagination and human resources in order to drive their economy forward.


by Alex Salmond MP, 23rd November 1996

Recently I went to Dublin to make a film for Scottish Television's political programme 'Platform'. Like every visitor to Ireland I am always struck by the energy and vigour of the whole country. There is a 'go-ahead' youthful confidence about the place. It is well placed confidence. Ireland was traditionally viewed from Britain as a humour-filled but rather poor and backward country, famed more for its literature and religion than its economy. The reality has of course always been somewhat different from Britain's more than condescending view. Ireland is one of the most popular countries in the world and over the last decade Ireland has also become what the Financial Times has called - "Europe's Tiger Economy".

Ireland's economy is the fastest growing in Europe. This new wealth creation is bringing with it a growth in jobs, which is in many ways more important than the money growth for a country which has had a serious unemployment problem.
Remarkably, in 1996 Ireland will experience a net in-migration of around 6,000. This is a sharp reversal of the historic trend where Ireland's youngest and best were forced abroad to seek theirfortunes - an experience we know all about in Scotland. What a testimony to Ireland's success.
Just as remarkable is research from the House of Commons Library which forecasts that wealth per head in Ireland will overtake the UK in the year 2000. Ireland is already richer than Northern Ireland and Wales and is set to overtake the rest of the UK. Ireland - richer than Scotland, richer than England. What a fitting way for this dynamic young country to mark the new millennium."


GDP: purchasing power parity -

$54.6 billion (1995 est.)

GDP growth rate:

7% (1995 est.)

GDP per capita:

$15,400 (1995 est.)

GDP composition by sector:

agriculture: 6.8%
industry: 35.3%
services: 57.9% (1994)

Inflation rate (consumer prices):

2.8% (1995 est.)

Labor force:

1.37 million
by occupation: services: 57.0%,
manufacturing and construction: 28%
agriculture, forestry, and fishing: 13.5%
energy and mining: 1.5% (1992)

Unemployment rate:

13.5% (1995 est.) and falling rapidly


revenues: $19.3 billion
expenditures: $20.3 billion, including capital expenditures of $3.6 billion (1994)


food products, brewing, textiles, clothing, chemicals, pharmaceuticals, machinery, transportation equipment, glass and crystal

Industrial production growth rate:

8.9% (1995 est.)


capacity: 3,930,000 kW
production: 14.9 billion kWh
consumption per capita: 3,938 kWh (1993)


turnips, barley, potatoes, sugar beets, wheat; meat and dairy products

Illicit drugs:

trans-shipment point for hashish from North Africa to the UK and Netherlands


$29.9 billion (f.o.b., 1994) and rising rapidly


chemicals, data processing equipment, industrial machinery, live animals, animal products


EU 73% (UK 27%, Germany 14%, France 9%), US 9%


$25.3 billion (c.i.f., 1994) and rising


food, animal feed, data processing equipment, petroleum and petroleum products, machinery, textiles, clothing


EU 58% (UK 36%, Germany 7%, France 4%), US 18%

External debt:

$19.5 billion (1994 est.) and falling


total: 1,944 km
broad gauge: 1,944 km 1.600-m gauge (37 km electrified; 485 km double track) (1995)

total: 92,327 km
paved: 86,787 km (including 32 km of expressways)
unpaved: 5,540 km (1992 est.)

Waterways: limited for commercial traffic

Pipelines: natural gas 225 km

Ports: Arklow, Cork, Drogheda, Dublin, Foynes, Galway, Limerick, New Ross, Waterford

Merchant marine:

total: 42 ships (1,000 GRT or over) totaling 129,027 GRT/155,371 DWT
ships by type: bulk 4, cargo 27, chemical tanker 1, container 3, oil tanker 2, short-sea passenger 3, specialized tanker 2 (1995 est.)


total: 40
with paved runways over 3 047 m: 1
with paved runways 2 438 to 3 047 m: 1
with paved runways 1 524 to 2 437 m: 3
with paved runways 914 to 1 523 m: 3
with paved runways under 914 m: 29
with unpaved runways 914 to 1 523 m: 3 (1995 est.)


Telephones: 900,000 (1987 est.)

Telephone system: modern digital system using cable and microwave radio relay
domestic: microwave radio relay
international: satellite earth station - 1 Intelsat (Atlantic Ocean)

Radio broadcast stations: AM 9, FM 45, shortwave 0
Radios: 2.2 million (1991 est.)

Television broadcast stations: 86 (1987 est.)
Televisions: 1.025 million (1990 est.)

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