Alternative economic vision of Spirit of Ireland offers hope
OPINION:The Spirit of Ireland economic revival proposal shows how we can pick ourselves up and get over this crisis, writes RAY KINSELLA
IRELAND IS a chastened country. Successive economic forecasts provide confirmation of an implosion that is creating a vortex at the heart of our economy, and the wider society – including public services – which it underpins.
On the external front, the contraction in world trade, together with the pressure on US foreign investment arising from Barack Obama’s legislation, give additional impetus to this vortex which is swallowing up jobs, lives and domestic industry. It is not partisan, but only the hard reality, that the politics which have led us into this cul-de-sac are incapable of identifying a way forward.
But, there is a way forward. Unlikely as it seems, we are being offered an opportunity to re-imagine the economy, and in doing so, restore both our confidence and our international standing.
The announcement, by Graham O’Donnell, of a new national energy initiative is transformational. It is based on our capacity to jointly harness Ireland’s uniquely favourable wind-flow, and the potential for hydro-electric generation offered by ice-sculpted valleys running into the Atlantic.
Nothing like this has been conceived before. The logo “Spirit of Ireland” does less than justice to what is envisaged – which is reimagining how our economy and society could be. It is eminently clear from the critical mass of research, drawing on both Irish and international expertise, that this can be done, starting, more or less, now. The economics of the initiative are compelling.
Ireland’s economic future is inextricably bound up with the cost, and the security, of a stable and sustainable supply of energy in a form compliant with our responsibilities under the Kyoto protocol. The most recent (2008) National Competitiveness Report by Forfás highlights this reality:
“This report highlights that Ireland is highly dependent on imported fossil fuels, which present a range of challenges . . . With respect to electricity cost competitiveness, Ireland ranks as the second most expensive country in the EU15 . . . Irish businesses and consumers are exposed to volatile and increasing international prices for oil and gas . . . Our reliance on imported fossil fuels endangers our security of supply and raises the carbon intensity of the Irish economy . . . Significant change will be required if we are to meet our Kyoto targets. Achieving our security of supply and environmental objectives in a fashion that does not further weaken our energy cost competitiveness is an acute challenge.”*
Electricity costs for Irish industry have risen inexorably over the last decade – significantly faster than those of our trading competitors. They are now, according to the most recent data published by the Central Bank, the second highest in the EU15. The cost of electricity to households has followed a similar pattern – they, too, are the second highest in the EU. The cost of imported fuel is some €3 billion a year. The reality is that our capacity is inadequate, our costs excessive, and our whole generating infrastructure deficient and not aligned to our own indigenous energy capabilities.
The Spirit of Ireland Initiative provides a robust platform for:
** Transforming Ireland’s medium-term economic performance.
** Reducing uncertainty, which is at present imposing a severe economic penalty on business and Government, not least within a largely self-fixated banking model and foreign exchange markets that are, at best, indifferent.
** Restoring national morale and confidence in our ability, wholly against the odds, to innovate and, once again, provide a template for other countries to seek to emulate.
** Fiscal stabilisation, and greater certainty, will contribute to a restoration of Ireland’s international reputation and policy credibility.
** Leveraging Ireland’s “Golden Demographics”, which is one of its few embedded competitive advantages, compared with other EU and OECD countries. The initiative provides a compelling justification for pro-active investment in higher education, and for expanding, rather than closing down, skill-based third-level courses and research.
It is worth emphasising that Central Statistic Office data suggests that the present demographics provide a unique window of opportunity which will close within 20 years, leading to significant increases in older, as well as the overall, dependency ratios.
Furthermore, the funding would not represent a further burden on an exchequer running out of balance-sheet capacity. Instead it provides the means for progressively returning to fiscal stability and paying off the costs of fiscal and political profligacy.
The initiative is not aspirational. It is rooted in established engineering and project management protocols. The scale of the project is vast. Downstream applications are limited only by the inventiveness of the Irish people. The first wave employment opportunities are in the tens of thousands – the key constraint here being the commitment of the people of Ireland and, secondly, the willingness of the present political order to support it without any regard whatever to patronage, and still less to control.
One of the terrible aspects of the recession has been the unravelling of expertise. Engineers are emigrating, whole classes of postgraduate students are seeking shelter within the third-level sector or setting aside their hard-won knowledge and capabilities. There is still time to reverse this process. We have the people with the necessary skills and with every incentive to engage proactively with this initiative.
What is in prospect is a whole new wave of industries and specialised service providers, following on from the epic energy engineering “core” of the project itself. The scale of Spirit of Ireland is, prophetically, proportionate to that of the country’s existing and even more so, prospective, problems. And all of this potential, which is waiting to be harnessed, is configured around natural endowments of air, water and the human creativity of one of the youngest populations within the OECD.
It is, however, the proposed governance of the Spirit of Ireland initiative which truly sets it apart. The hubris that brought Ireland to its knees in the latter stages of the Celtic Tiger was characterised by societal fragmentation, driven by greed. We lost the run of ourselves and lost sight of our neighbour.
Spirit of Ireland is the complete antithesis of this mindset. It proposes that the wealth – in the form of energy, and all of the other activities that will be animated by this energy – be held in trusteeship for the people of Ireland. The proposed legal framework envisages that the gifts of our natural resources are the legacy of this, and future, generations, and must remain so. The fruits of this initiative will not be privatised, or parcelled out for private or institutional interests. This far-sighted vision throws into sharp relief the extent to which our natural resources have, in the past, been sold out or sold cheaply.
This is not a Government – or even a political – initiative. It is, quite simply, driven by the vision, tenacity and generosity of Graham O’Donnell, a successful entrepreneur working in this field, co-operating with a gifted academic team led by Prof Igor Shvets. The integrity and clear-sightedness of the initiative has brought on board a wide range of Irish and international experts. The sole motivation of this team has been the interests of the people of Ireland, and the willingness to engage inclusively with all of the people in order to make it happen.
This is the public good as a vital force in transforming, not just our energy supplies and our economic trajectory, but the whole manner in which Ireland, as a community, can function. That, surely, is transformational.
The response to my recent article (“We’ve screwed up, that’s the truth of it” – April 23rd) – which argued for a whole new political ethos – found an extraordinary resonance across all ages and shades of political opinion. This response is embodied in the Spirit of Ireland initiative which is not just the only option open to us in our current bleak circumstances; it is the very best possible option.
Spirit of Ireland puts our future firmly into the hands of the people of Ireland, and the onus for supporting and empowering this initiative on to the politicians of a political system which is passing.
Prof Ray Kinsella is co-author (with Prof Vincent McBriety) of Ireland and the Knowledge Economy: the New Techno-Academic Paradigm(Oak Tree Press, 1998)