Ireland to become third wealthiest in world

Ireland is on track to become the third wealthiest economy in the world, it was claimed today.

The economic wealth per head of population rose to surpass the United States for the first time late last year.

Bank of Ireland’s chief economist, Dan McLaughlin, said that Ireland was now richer than America.

Fine Gael’s finance spokesman, Richard Bruton, said that the economy has been growing at a “phenomenal pace” ahead of most of its trading bloc.

However, he said: “The other thing we have to be conscious of is the limit to which the marketing services can grow.”

Mr Bruton said the traditional manufacturing section was in “sharp decline.”

“We are pricing ourselves out of the market by becoming, what is colloquially described as a rip-off country,” he said, on businesses which sell products, like software goods, overseas.

Mr McLaughlin said the increase in Irish economic wealth to €36,100 per head of population, or $41,500 at an exchange rate of $1.15, had surpassed the US figure of $40,100.

The Organisation for Economic Co-operation and Development, the OECD, and the European Union’s statistical office, Eurostat, recently ranked Ireland the wealthiest economy in the world after Luxembourg, Norway and the US.

The study took into account the Gross Domestic Product – the value of goods and services produced by a country.

“We surpassed Berlin in the millennium year and, now in early 2005, we are richer than Boston,” Mr McLaughlin told The Sunday Business Post.

Mr Bruton said that businesses across the country must watch costs, as it emerged the Irish Congress of Trade Union submitted a formal request to the Labour Court to raise the minimum wage from €7 per hour to €8.75 - a 25% increase.

However, he said: “Overall we have to watch over costs across many areas, no longer just wage costs. Anti-competitive practices are resulting in high margins. It is not just down to workers getting too much, it is down to people who own businesses taking too much.”

Mr Bruton said the focus of competitiveness was no longer just on minimum wage.

The ICTU said the increase would bring the minimum wage to 60% of the average industrial wage, which was the position in 2002 when a minimum wage was first introduced.

The Labour Court will be reviewing submissions by unions before it presents its review on the minimum wage to the Trade Minister Micheal Martin next March.