“IRELAND EXPORTS everything it produces and imports everything it consumes.” This phrase from the Tiger years, though something of an overstatement, catchily encapsulated how the Irish economy came to be one of the world’s most globalised. Specialising in areas of competitive advantage led to prosperity and sustainable jobs. This was undoubtedly the way to go – a small economy cannot make everything it needs and be rich, as much of the post-independence period proved. But while long-term prosperity depends on winning in world markets, a shot in the arm for the domestic economy is desperately needed in the short term. Research published this week provided a valuable suggestion on how this can be achieved.
Amárach Consulting has claimed that if households increased their spending on Guaranteed Irish products to €20 per week, an additional 6,200 jobs would be created. Although this can be little more than a guess, it is true that if consumers switch from foreign-made products to Irish-made ones, indigenous companies will get a welcome boost. Jobs that are now at risk will be made more secure and businesses that need to increase production to meet extra demand will make new hires.
With more companies signing up to stamp their products with the Guaranteed Irish logo and more consumers than before intent on buying made in Ireland products, the scope exists for a significant switch from imports to home-made goods. A campaign launched this week to heighten awareness of the potential for consumers to support their fellow citizens is welcome and to be supported, particularly given the very limited scope available to Government to boost demand.
Stimulating economic activity when the State is dependent on external partners means that there is no alternative but to continue reducing the imbalance between what the State spends and what it raises in revenue. Given the constraints within which the Government is operating, the greatest contribution it can make to increasing demand in the short term is to project a sense that it is sure-footed, purposeful and capable. Confidence is low and consumers are afraid of what the future may bring. Many are saving rather than spending for fear that rainier days are ahead. A Government that acts deliberately and with purpose, and one that can show it is proactively dealing with the many problems afflicting the country, can help instil a sense of confidence. Greater confidence in political leadership could make consumers more willing to spend.