We cannot afford to be overly pessimistic as we venture into 2017
As an eternal optimist, I offered the opinion that the prospects look pretty good, notwithstanding the obvious caveats concerning Brexit, Donald Trump, and an increasingly menacing global geo-political backdrop.
Ireland is doing well at the moment and 2016 was a relatively good year.
Business investment picked up strongly, employment creation was very buoyant, exports did well, and consumer spending continued to claw back the ground lost after 2008.
However, I warned that the biggest danger to Ireland’s economy over the coming year would potentially emanate from fear and lack of confidence.
Despite the strong recovery story in Ireland over the past three years one definitely gets a sense of the greater fragility of confidence that has emerged over the past six months.
Confidence at the consumer and business level is just so important to economic success. I have few fears about business confidence because the nature of most business leaders is to just get on with it and deal with whatever uncertainties and difficulties might arise.
In the depths of the economic crash, back in 2009, when some commentators were arguing that Ireland would never emerge from the morass that it was in, I fundamentally disagreed.
I have extreme confidence in the ability and willingness of the risk-takers and entrepreneurs who actually make the investments that generate the jobs in the economy to make it happen.
That is exactly what has transpired and will lead Ireland through challenging times over the coming months.
I have more concerns about consumer confidence. At the turn of the year, one noted commentator suggested that the only grounds for optimism — relating to 2017 — was the fact that it hasn’t yet happened. I do not understand that degree of negativity.
If we all thought like that, nobody would bother getting out of bed in the morning. We obviously need to be realistic about the challenges and risks, but blind pessimism is arguably much more damaging than blind optimism.
The big elephant in the room for Ireland is certainly the UK’s relationship with the EU. Brexit obviously presents the greatest reason for caution over the coming year and unfortunately for some years thereafter.
The main problem with Brexit is that nobody knows how it is going to turn out, not least the political leadership in the UK.
The absolute lack of any coherence amongst British policymakers was demonstrated clearly again this week with the resignation of Britain’s most senior and experienced diplomat in Brussels, Ivan Rogers.
As British ambassador to the EU, Mr Rogers would have been expected to play a key role in the very difficult Brexit negotiations which will begin over the coming months once the prime minister invokes Article 50.
Mr Rogers recently aroused controversy when he warned his government that post-Brexit negotiations could take a decade to deliver a trade deal.
He was stating the obvious, but that can be a dangerous strategy in political life. One way or another, his resignation will further weaken the British side and will further complicate an already frighteningly complicated negotiation process.
Be that as it may, Ireland’s economy and business leaders will just have to deal with it and develop strategies to offset the negative impacts.
The ongoing success of the IDA — as seen in its 2016 figures earlier this week — is really impressive and another reason why the relentless negativity of some commentators looks misplaced.
