Political leaders failed to adequately address the problems of unemployed and disadvantaged groups during the Celtic Tiger boom while economic progress was less comprehensive and sustainable than believed, according to a major report.
The study by the National Economic and Social Council claims the economic crisis has also highlighted how Ireland’s system of collective decision-making and public governance is “extremely weak”.
The report entitled Ireland’s Five-Part Crisis, Five Years On: Deepening Reform and Institutional Innovation states Ireland’s place in the global economy is also more vulnerable and dependent that we had thought.
Overall, the report said there was now a significantly more integrated response and strategy response by government to the economic crisis. The council says credit for this should be shared between the Government and the troika.
The group, which advises the Taoiseach on strategic issues for Ireland’s economic and social development, noted that budgetary adjustments of €26bn representing 16% of GDP had “repaired the country’s reputation”.
Ireland has also enjoyed a significant recovery in its cost competitiveness with growth in exports since 2010 and in GDP since 2011, and with sustained improvements in levels of foreign direct investment.
In addition, the rate of mortgages falling into arrears was declining, although the overall number of distressed mortgages was “significant”, while many positive indicators were recorded this year in relation to improvements in consumer spending, investment, full-time employment, yields on government bonds and exchequer returns.
However, the NESC still warns about uncertainty in the global economy while the eurozone remains vulnerable to renewed financial, banking and sovereign debt tensions.
The council also acknowledged that targeted actions would be needed to address the problems faced by people in long-term disadvantage as well as those who had suffered a significant reversal in income and wealth as a result of the recession.
It also calls for further reform in banking, enterprise policy, the green economy and further education and training.
NESC director Rory O’Donnell claimed the lesson of the boom-to-bust period is that government strategies and policies can only be “provisional starting points”.
“What is critical is good systems for monitoring success and failure and institutional arrangements capable of review, learning and policy adaptation.”
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