A very interesting set of comments from Dr Robert Shapiro, senior economic advisor to the US President Elect. For the last 50 years, with the Whitaker Plan and the creation of the tax-free zone at Shannon, the economic strategy (if that isn’t too strong a word for most of the period) of the Irish Republic has been to develop the economy through what is now called Foreign Direct Investment. In my post on the Budget last month, I pointed out that this was a budget in the interest of the multinationals, and not the people. But Shapiro believes that the south should seek to build up indigenous companies and industries.
“FDI was a transitional strategy, not an end-game strategy, that created a lasting impact.
The key to Ireland’s next stage was to make the entire economy a modern economy and not one that depended on the success of foreign companies.
The ability to develop ideas is the single most critical factor and source of wealth and growth for advanced economies today, replacing physical assets and this is what Ireland needed to focus on.”
This is both welcome and disturbing. Coming from such a source, we can hope it will have some impact on those in the southern establishment who have failed to sufficiently promote domestic industry, and instead put all their eggs in the foreign investment basket. However, at a time when people have been talking about the real economy, and the importance of not allowing the collective delusion that is high finance, it is worrying that Obama’s advisor still believes that “physical assets” are not needed. From a northern perspective, where the whole economic strategy of the Executive (while it met) was to beg the yanks for investment, this is extremely worrying. Back to the drawing board. Maybe, however, Shapiro is more of a believer in a socialist plan for the economy north and south than we are.