Time to lay era of Civil War politics to rest and let our talented people shine
OPINION:This small nation has shown fighting spirit again and again and this time will be no different
IRELAND’S SUCCESS since the foundation of the State is often best observed from outside rather than from within.
We are an island nation with real spirit which has time and again fought against and dealt with enormous economic challenges. Today is no different and to appreciate those challenges we should examine the facts of the current situation and not the emotion.
Today Ireland exports total €84 billion compared to 1990 when our exports were €18 billion. The growth in technology and other knowledge-based sectors has driven the success of Ireland.
Anything that nourishes this trend should be the priority for Irish society, anything that hampers it should be choked off ruthlessly. In times when your back is to the wall, it is fundamental truths like this that matter.
Ireland was in serious economic crisis between 1987 and 1992. While the boom created an unsustainable bubble in property, the fundamentals of our position in 20 years have been undeniably transformed.
Debt to GNP in 1987 was almost 125 per cent and it took almost one-third of the tax take to pay for the interest alone.
Mistakes may be painful to bear witness to, but they are incredibly valuable if learned from. All decisions can be criticised with the benefit of hindsight; the leader’s role is to make the call based on the data to hand and their own best instincts.
In terms of actions to ensure that Ireland prospers, it is fundamental that the human talent that can drive that process is not incentivised to leave. It seems to me that Ireland faces a choice between a moderate tax economy with a competitive social welfare and public sector, versus an economy with high taxes and generous social and public packages.
I have lived outside Ireland for most of the last two decades. Despite the oft-repeated incorrect claim that this was tax driven, it was actually because I wanted to pursue international opportunities and not be suffocated by journalists and politicians here.
Irrespective of where I reside or what passport I hold, I was born in Ireland and will die an Irishman. Since 2000 I have invested a net €250 million in the country, generating many jobs, tax income for the State and high value/knowledge-based revenue for the export market.
The State must ensure that it deploys its resources in line with the needs of a modern knowledge based economy.
Ireland has previously used the tax system to incentivise pensions, investment and, to excessive levels, the property market – what if we were to use it now to drive the real opportunity for Ireland in the knowledge economy?
I am not privy to what is going on in Europe or the ECB but I have never in my experience seen a situation where delaying restructuring has improved matters.
As an Irishman, it wounds my pride to see the country in this position but, as a businessman, there is only one choice that must appear obvious to all; we must refinance urgently with the EU, while we can and before the rush.
It is vital that, as a minimum, either Bank of Ireland or AIB be handed over to foreign or private ownership. Otherwise Ireland will be doomed to an uncompetitive, politicised banking system overseen by faceless mandarins in the Department of Finance, the Central Bank and their political masters.
While there are some very good people in the public service and I am the son of a civil servant, there is little depth and quality at the senior departmental levels. The complete regulatory failure aside, if the quality was there the solutions to the current crisis would be commensurate with the horrendous scale of the problem.
The visionaries of the Civil Service we saw in early years have not been replaced. Today the senior management of the service can’t take criticism, abandon their responsibilities to a bewildering array of quangos, become suspicious of success and are never accountable.
The standard response to failure is to move the senior civil servant on to another parish. I have over the past 18 months written to various government departments with suggestions and, in most cases, I haven’t even got an acknowledgement.
It is my experience that if you challenge these people they will endeavour to make you persona non grata. Let’s second people from the private to public sector and vice versa so we will again see vibrancy, transparency and accountability.
On a point of optimism, the reality is that by dealing with the State finances professionally and aggressively, we can make the most of our position.
As long as the truths I mention above are kept in mind and the macroeconomic factors are managed, I think Ireland will bounce back quickly afterwards.
I believe that there must be fundamental political and constitutional reform of the State. Without it, how can the citizens of this Republic have any faith in the solution and strategy for success from the same source that has failed them?
Talented people of whatever background and belief should be involved in fixing the problems. The era of Civil War politics, passed on as a family business across generations, must be laid to rest.
This is an edited version of a speech delivered by Dermot Desmond to the Golf Business Conference in Dublin recently