Saturday, July 11, 1998
In The Clover
The Irish have made their
By Bob Dye
own economic luck...Can
Hawaii do the same?
Special to the Honolulu Star-BulletinKINSALE, Ireland -- Damnable weather. It rained for a week after I set foot on this lovely piece of Ireland, far in the south, away from sectarian troubles. But the rain hadn't dampened the economy here in County Cork, or elsewhere in this nation of 3.5 million people. The phenomenal growth of that economy had created three or four millionaires that week. And had created three or four the week before, and a like number the week before that.
I wondered, were there lessons here for Hawaii? What had the Irish people done that we hadn't? Would we ever again see an upbeat headline about a booming Hawaii economy?
"Being wealthy in Ireland isn't easy as you might have thought, there just aren't enough 1 million-plus estates to go around," boasted a headline in the property section of the Examiner, a national newspaper published in Cork. For the first time in recent history, many Irish are able to compete in the luxury property market against Americans, British and Germans.
Even casual investors, like my wife and I, have joined those property owners who are "rich on paper." About 10 years ago, not being able to afford a realistically priced second home on a neighbor island, we bought a quality Irish property for that purpose. Recently, a banker informed us our Irish property was worth six times what we had paid.
The average house price in Ireland has doubled in the past 10 years. But the typical Irish share has more than tripled. An investment in Jury's hotel chain is now worth nearly six times what it was a decade ago. Consumer prices rose 23 percent in the same period. An investment, over the same period, in Allied Irish Bank is worth even more.
The Irish economy, it appears, will continue to create millionaires until the so-called Celtic Tiger loses its teeth. But in this young cat that isn't likely, say financial analysts. One respected economist, Dermot O'Brien, told the press that the economy has 10 more years of above-average growth. If that growth averages 6 percent, which he predicts it will, that means this small republic is looking at yet another decade of growth after that.
This year the wealth of Ireland is expected to grow by some 12 percent, surpassing the more than an 11 percent increase of last year. Tax revenue will vastly outstrip government expenditures this year. That means the government will neither borrow money nor raise taxes. It will pay down debt.
The Irish people anticipate their children will enjoy the highest standard of living in the world. These parents, themselves amazed, are fast matching that high level achieved by the French and Germans.
More people are working than at any time in the history of the Irish state. And workers are making more money than ever before. Employee remuneration jumped by 10.2 percent in 1997. Unemployment is down from an historic level of 15 percent to under 10 percent. And although there are a quarter-million people without work, that number is smaller than at the previous low in December 1990. The government goal of no more than 6 percent unemployment by 2010 is achievable before that date.
Education turned tide
How did this happen? The one-word answer: education. About a quarter-century ago the Irish people made the decision to give their children the greatest gift of all, a quality education, from pre-kindergarten through graduate or professional school. That education is free or nominally priced. There are no taxes on children's clothes, books and school supplies.At first, this commitment to quality education was a boon to other economies, primarily in places where English was spoken -- the U.S., Canada, Australia. There were too few jobs in Ireland, and the best students sought challenging work abroad. Critics complained that it was fiscal nonsense to support a brain drain. But within a generation that investment in education paid off at home.
Ireland became known for its educated labor force, best in the world, and international business began to locate there, especially electronics firms and pharmaceutical companies. To add to the superiority of the Irish work force, those graduates who went abroad returned home and put their foreign job experience to work.
In addition to education, there were other E words that played a role. Shipping executive Conor Doyle, chairman of the Cork Chamber of Commerce, ticks them off -- a work ethic second to none, entrepreneurial spirit, great proficiency in the use of the English language, and membership in the European Union. Tax incentives didn't hurt, he said.
Developer Joe Neville, a former schoolteacher, agrees that the Irish work ethic and entrepreneurial spirit count for a lot. But he points out that without a quality education those other positive qualities alone or together are often not enough for success. Remember, there was only one Horatio Alger, and he was a fictional character. In ranking the reasons corporations have moved to Ireland, Neville says the educated work force is first, the quality of life second and tax incentives third.
Irish tourism
During the past two years in the Republic of Ireland new hotels have opened at the rate of one every other week. The major growth has been in Dublin, where 12 new hotels will be opened by the close of this year, increasing by 2,000 the number of hotel rooms in this capital city.
Tourism now accounts for 8.3 percent of total employment, and represents 6.2 percent of the national economy.
Why do tourists come to Ireland? The Irish tourist board believes the answer lies in the country's relaxed approach to life, its benign attitudes of mind. This slogan, "Ireland: Live a different life," appears on the outer sides of trams in Amsterdam, and the Dutch have taken the cue. In the past four years tourism from Holland to Ireland has doubled. Last year's total of 130,000 Dutch visitors is expected to increase this year, prompting a new daily air service between Amsterdam and Cork.
For the past few years, the Irish Tourist Board (Bord Failte) has been increasing its share of European visitors area by area, moving from Benelux to Holland to Scandinavia. Increased numbers of Finnish visitors are now coming for golfing and fishing. These markets are economically stable and their governments mature.
Growth in tourism is controlled, keeping that industry from overwhelming the country. Quite the opposite, it turns out. Tourism provides a market for all things Irish -- from farm house cheeses to videotapes of Riverdance and CDs of the Cranberries. The Irish music industry generates about 10,000 full-time equivalent jobs.
"Workhorse/workspace" for artists is being constructed in an old Cork city grainstore and warehouse located beside a fast-flowing channel of the River Lee. Up to 75 artists will be accommodated. The ground floor will house a commercial gallery. Profits will help pay the rent to the city government, sponsor of the project. They expect the facility will draw tourists.
By the close of this year, 22,000 Irish people will be employed in the arts.
With those Asian economic tigers now toothless, perhaps Gov. Ben Cayetano should do an about-face and visit Ireland, talk to businessmen there, sense first-hand their commitment to education, feel the excitement of their spirited entrepreneurship, and see the Irish work ethic in action.
And add a trip to Blarney to kiss that famous stone for the gift of gab. Couldn't hurt.
KINsale -- In 1963 what is now Ireland's most highly regarded tourist town wasn't even designated on tourism maps. The village of Kinsale was an impoverished fishing town, unemployment was high, and four of every 10 buildings were derelict. For tourists there were just 20 beds available and in the solitary restaurant catering to visitors only 16 seats. Kinsale: Getting tourism right
Today there are more than 2,000 tourist beds available in hotels (all of them owned by Irish), guest houses and self-catering units (all of them owned by locals). And most of the tourists in those beds are from Ireland. Despite increased discretionary spending, during the first quarter of this year just 616,000 Irish went abroad. Most Irish vacationers stay home to enjoy the new sporting amenities, and, of course, eating in great restaurants and drinking in pubs.
Some of Kinsale's many restaurants are critically acclaimed. Several years ago those eateries organized themselves into a Good Food Circle and promoted a Kinsale Gourmet Festival each October, proclaiming themselves the Gourmet Capital of Ireland.
A leading figure in the transformation of Kinsale into a tourist town is Peter Barry. A pioneer, he opened two restaurants -- The Spaniard and Man Friday -- there in 1963. "Those were desperate times," he recalls. "We expected little or nothing from the government. We would help ourselves." By cooperating with each other, complementing and helping each other, the fledgling tourism entrepreneurs hoped to make an economic miracle, of sorts.
But would tourists come if the facilities were there? They hoped so. The 10-bedroom Acton's Hotel added 20 rooms. Peter Barry's two restaurants were joined by others, one of them Ireland's first wine bar. Its owner, Wendy Tisdall, named the place Max's, after her dog. It didn't turn out to be one. Today, Max's boasts one of the best wine cellars in the country.
Because of the new prosperity the sale of wines, to accompany gourmet dishes, is up, not only in Kinsale but all over the republic. But traditionalists need not fear; so is the sale of beer, most of it Guiness stout, and Irish whiskey. In 1997 Irish consumers spent some 12 percent of expendable income on beers, wines and spirits, amounting to 3 billion punts (Irish pounds).
That's much more than 4 billion Yankee dollars. Most of that expenditure, 65 percent, was for beer, with 22 percent for spirits, 9 percent for wines, and the remainder for ciders, some of that bootleg.
So, just as Irish vacation in-country, they consume beers and spirits made at home. Not only is the value better, the money stays home. If a locally owned hotel in Hawaii served a locally produced rum or okoleha'o in its bar, would you go there? So why don't we develop a local spirits industry?
Bob Dye is a writer and historian who lives in Kailua.
He is a former city administrator and political candidate.
