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Analysis/Comment Last Updated: Aug 23, 2010 - 8:24:15 PM


Dangers of premature "mission accomplished" and the Irish fields of dreams
By Michael Hennigan, Founder and Editor of Finfacts
May 12, 2009 - 4:48:04 AM

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The recent signals of a stabilisation of the global economy are welcome straws in the wind for Ireland but the danger is that those who are good at clutching at straws, will declare a premature "mission accomplished," like the hapless 43rd American president. It is easier to paint new images of Irish fields of dreams than confront home truths from the recent crash of the economy.

Last week, a proposal to achieve Irish energy independence in five years, called the Spirit of Ireland initiative, was launched. The proposal aims to turn Ireland into a net exporter of energy after a decade by harnessing wind energy and using huge storage reservoirs in valleys in the West of Ireland. The group is reported to be planning to invest €10bn in the project that may create tens of thousands of jobs, end our €3bn a year import bill for fossil fuels and radically reduce our carbon emissions.

Speaking to the Sunday Independent, chairman Graham O'Donnell said "we hope the project will help build a renewal of national confidence.''

The newspaper reported, that at a recent weekend meeting with Minister for Finance Brian Lenihan, it is believed a visibly enthusiastic Lenihan called the proposal "the Ardnacrusha of our time."  One impressed source said of the meeting that "Lenihan was amazing. He immediately grasped the minutiae of the proposal and started asking us complex engineering questions.'' It was reported that the Finance Minister immediately contacted the Taoiseach Brian Cowen about the plan.

It may well be feasible and meet commercial tests but what struck me when I read the press statement last Thursday, was the absence of any financial information or detail on comparative projects elsewhere.

The image of former Taoiseach Bertie Ahern, flanked by a retinue of dozy ministers, endorsing the aspirational project, came to mind.

The project website provides the following information on key aspects of such a major proposal:

Technical Overview

Our content is being updated. Please check back soon....

Commerical Overview

Our content is being updated. Please check back soon....

Financial Overview

Our content is being updated. Please check back soon....

UCD professor Ray Kinsella enthused in the Irish Times on Monday, in terms evoking De Valera: "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.

Kinsella wrote that 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.

Surely the best way to build confidence is not to ignore lessons from the crash?

Ireland has been poor in managing big projects and last month, in the Irish Times, I gave the example of the almost 36 years to complete 80 kilometres of continuous motorway/dual carriageway, from Dublin to the Cork/Limerick side of Portlaoise.

As the National Roads Authority was working on plans for acquisition of lands for roadbuilding, councillors were racing ahead with rezoning so that farmers would even end up with bigger bonanzas!

The line "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," is just blather if we are not prepared to ask key questions about the recent past.

In 1973, the year Ireland joined the then European Economic Community, 55% of total Irish exports went to the UK. In 2009, foreign-owned firms - - mainly American - - are responsible for 90% of Irish exports. Of the remaining 10% from Irish-owned firms, 50% go to the UK.

Shouldn't we look at why our exporting record and development of new internationally tradable goods and services firms, is so poor?

Kinsella says:"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."

Shouldn't we at least properly examine the value of the budget of over €8 billion to become a "world-class knowledge economy" by 2013 - - which will be an unrealised dream?

Shouldn't the likes of you Ray Kinsella, other academics and policy makers wonder why the biggest home-grown tech company Iona was sold to a US firm of more recent vintage last year?

Science Foundation Ireland said recently, it will attempt to push patent filings up to 500, over the next five years. It also expects to see 1,000 invention disclosures, 40 money-earning technology licences and 30 start-ups based on local research discoveries.

30 start-ups with a survival rate of about 20%, is not a huge achievement.

As for "leveraging Ireland’s “Golden Demographics,”'  we had plenty of this blather during the boom from the property industry. There are many factors other than demographics, which are necessary for building a sustainable economy.

The Ray Kinsella character, played by Kevin Costner in the 1989 movie Field of Dreams, hears a voice whisper, "if you build it, he will come," as he walks through his cornfield.

Ireland of course, has more at stake than the building of a baseball field.

Our vested interests can promote their fields of dreams but first recognise the existing shortcomings and what needs to be fixed. We are better at dreams than vision and are well-known purveyors of blather, such as Minister Mary Couglan's statement on Monday: "Ireland Inc reaches milestone in transition to a smarter, greener economy."

However, the milestones of vacuous politicians and their cheerleaders, often become the millstones for everyone else.

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© Copyright 2010 by Finfacts.com

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