Ireland’s progress has been driven by openness - to trade and to immigration

On Thursday morning, the latest data from the Central Statistics Office (CSO) showed that the Irish jobs market continued to surge ahead over the past year. Immigrants played a vital role in this economic success, filling just over half of the 100,000 additional jobs created. By that evening, after the terrible events in Parnell Square, the “keep Ireland for the Irish” brigade were out burning buses and Garda cars and setting the city centre ablaze.

The real motivation for the outbreak of rioting is, of course debatable. Destroying the city centre is hardly an act of economic nationalism. But there is no doubt that many of those stoking the fire have an anti-immigrant agenda – and that this mix of populism and economic nationalism is evident in the politics of many countries, playing on a disconnect from mainstream politics, feelings of economic insecurity and questions of identity.

Exhibit two this week is what happened in the Netherlands, where the far-right Freedom Party, led by Geert Wilders, got the largest vote in the general election and will thus have the first shot at forming a government. How could the Netherlands, a country whose high living standards are based on its openness – to trade, to an immigrant workforce, to new ideas – vote for someone who wants to hold a referendum on EU membership and not only crack down on immigration from outside the EU but also have a visa system for those coming from other EU countries?

As with elsewhere, the vote is put down in part to a disillusionment with the wheeling and dealing of traditional politics, beset with a variety of recent scandals, and also to economic concerns from the cost-of-living crisis. The Dutch, predictably, have a long word for the latter, bestaanszekerheid, which roughly translates as concern over livelihood security, covering issues like the minimum wage and social benefits but also expanding to the wider impact of the cost-of-living crisis, squeezed living standards and a big housing problem.

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The Dutch, predictably, have a long word for economic woes, bestaanszekerheid, which roughly translates as concern over livelihood security

House prices in the Netherlands have shot upwards, pricing middle-income younger people out of the market and sending rents skyrocketing, with a lack of social housing making things worse. Sound familiar? So as well as the “precariat” on low incomes or insecure jobs, the creeping sense of economic dissatisfaction has spread to the middle classes.

Yet were Wilders’ party’s policies to be implemented in full – including its support for leaving the EU via a "Nexit” referendum – the economic model on which the Netherlands is built would collapse. That one-quarter of the Dutch electorate still supported Wilders is a frightening reflection of their search for an alternative to traditional politics and a worrying sign for the rest of Europe.

This search for an alternative, for someone to “speak up” for the people against the establishment, is an international phenomenon of course, with a real chance that Donald Trump could be re-elected as American president and the election in recent days of Javier Milei in Argentina, a man whose economic policies make the Donald’s look boringly mainstream.

Where does all this leave Ireland, with the riots reflecting the dark side of this protest politics – as well as plain thuggery? There is clearly a premium, in terms of protecting the economy, in maintaining stability and a degree of predictability in policy. The fracturing in the international landscape is already affecting trade and investment flows after an era of globalisation, which was central to Ireland’s economic progress.

There are now threats here as other countries jealously look at our success in attracting multinationals and the resulting employment and tax revenues. However, as politics fracture elsewhere – we have already seen the costs of Brexit – Ireland could benefit if it can avoid the policy swings happening or threatened elsewhere, and instead double down on the model of openness to investment and skills from around the world. Investors, above all else, want political stability and predictability and this is increasingly in short supply internationally.

This part of the challenge presents questions for Sinn Féin, as it tries to balance its promise of "change” with a wooing of the big tax-paying multinationals, which any Irish government needs to stay and prosper to help pay the bills.

The other part of the agenda presents big questions for those who have been in government here – and indeed for anyone who will be in the near future. Since the crash, successive administrations have delivered by attracting investment and moving the public finances into a much better place. Employment has surged to record highs.

Yet like in many countries there is, too, a sense that younger people have been left behind and the middle ground has not benefited in a world where a lot of the big wins go to corporate profits and the wealthy. In Ireland, younger people can get a job, but unless it is in one of the high-pay sectors, they will struggle to buy a house, or afford to rent. Recent figures from the CSO show that household living standards were 12 per cent higher in 2022 than in 2016, after allowing for inflation. This is a significant rise, but interestingly the vast bulk of the gain was due to households, on average, having more people at work. The living standards of an individual worker, on average, only rose slightly, hit by the recent surge in inflation.

Add this to the housing crisis and the State’s struggle to expand public services in areas like health and housing to deal with a rising population and you get some explanation for the mood of dissatisfaction with mainstream politics. Mix this in with what has been dubbed as an international “permacrisis” of war and upheaval – and the desire of some extreme factions in Ireland to try to cash in on this by stoking protests and violence – and the political challenges mount up.

In all this, one piece of perspective is needed: Ireland has profited and been shaped by its openness. Growth and economic progress have been driven by trade. And record numbers of those at work in Ireland - around one in five- are now nationals from another country, according to this week’s figures. Without them, the economy and our public services would collapse and we would be a much poorer country. In every sense of the word.

* This article was edited on November 30th