When the Celtic tiger becomes the Celtic tortoise in the next two years, the economies of both Galway and Dublin will be most badly hurt, an economic consultant has warned.
Both cities are "frothy" enough in terms of property prices and other economic indicators to be very vulnerable, Mr David McWilliams, director of Iconics International Advisors, told a tourism seminar in Galway last week. However, an immediate relaxation of Irish immigration laws would help to stave off some of the worst effects, by helping to meet current labour shortages, he said.
Hosted by Galway Chamber of Commerce, the one-day seminar also heard criticism by the Western Development Commission of the State's poor approach to rural tourism.
History had already told us a few things about economic success, Mr McWilliams said. The pace of a tiger economy, characterised by an export and GDP boom, would inevitably slow down to tortoise speed.
Already, the "last leg" symptoms in the classic cycle were evident, with labour shortages, a rise in wages, infrastructure and traffic problems, panic buying and more borrowing.
Even if the core of the "crash" was concentrated in the capital, the State's regions would be affected, he said. Tourism was still a good bet in terms of economic development, given that the rest of the developed world was getting older, wealthier, and spending more disposable income on leisure activities.
Mr McWilliams said that he applied two yardsticks to measure an economy. These indicators, the number of Irish pubs per head of population, and the number of working days necessary to afford a night in a three- to four-star hotel, were further proof that tourism was central to any progressive model.
Luxembourg, Europe's richest state, had the most Irish pubs per head, whereas Kiev in Russia had the least. Significantly, workers in Dublin and New York are most likely to be able to afford a night in a quality hotel.
Mr Brendan Geraghty of the Western Development Commission said the current over-dependence on urban models must be replaced by a fresh approach to tourism development that benefited the regions.
Ireland would earn as much from tourism in one year as it would receive from all EU structural funds for the six years after 2000, he reminded the audience. "Thus we have a real opportunity to get it right."
The failure to date to capitalise on our assets and many of our other natural resources was a symptom of a wider national failure to recognise the diversity of Irish regions, a tendency to accept conventional economic planning inherited from Britain, and a failure to regard rural development as a mainstream economic issue in a State that skipped the industrial revolution and kept the rural ethos, he said.
If tourism was to be the catalyst for western development, then we must concentrate on the resources we have rather than those we haven't, , Mr Geraghty stressed. Rural tourism must be clearly defined, sensitively developed and promoted internationally as part of a regional offer, under a new "Brand Ireland".