What Works: Success in Stressful Times. Hamish McRae
in roads and in public transport but also because the planning response to such pressure has been weak and-on some occasions, I am afraid-corrupt. Infrastructure has scrambled along behind the growth, never quite catching up. Much of the new private housing is uninspiring, while some of the new public housing is associated with social deprivation. Dublin also has a serious drugs problem.19 But in other areas of great importance-most particularly the human relations between the ‘new’ Irish and the existing population-I do think Ireland has got it pretty much right.
You have to appreciate that no other developed country anywhere in the world has seen as rapid a rise in immigration proportionate to the population. This is not just the biggest migration that has taken place in the world over the past decade or so; it is one of the largest that has ever taken place over such a short time. And it has happened to a country that had no experience of inward migration in living memory. Of course, it has not been easy and if you read the Dublin papers there are plenty of examples of friction. But somehow the country has risen to the challenge.
For economic success is not just about getting richer. It is also about creating a society where people want to live-a place where they can be happy. Ireland’s achievement has been wider than prosperity. And that has something to do with that quality my father recognized in Grafton Street all those years ago.
•Be ‘business friendly’ •Promote your own culture •Learn to cope with success
3. WHAT COULD GO WRONG?
In one sense that is no longer the right question. The Irish economy has gone wrong. As I write in 2009 it is experiencing just about the most serious downturn of any developed economy, and is forecast to contract by more than 10 per cent between 2009 and 2011. It is too early to do more than sketch the reasons why the country should be so severely affected but it is clear that it allowed its property boom to get out of control and permitted wages and salaries to rise too quickly.
The reasons for these failures will be picked over by economists almost as closely as the reasons for the prior success but my own view is that given the rate of the climb some bump was inevitable. The property boom20 of the Dublin region had got out of hand and there is little the Irish authorities could have done about it. The boom was fuelled by the low interest rates of the Eurozone and Ireland could not increase rates while it remained a member.
Ireland’s decision to adopt the euro has brought it the benefit of being the only English-speaking country in the zone. That helped attract foreign investment. But it meant that Irish business people could borrow at below the rate of inflation, which they did with great abandon. While property values continued to go upwards, these loans were good; when values faltered following the credit crunch, many of those became bad debts.
With 20/20 hindsight the crisis could have been managed better. Maybe Ireland could have placed direct curbs on its banks, restricting their lending, particularly to property. It could and should have had more restrictive fiscal policies and might accordingly have been able to put itself in a better position to withstand the global recession. But what is done is done. What I find much more interesting is the way in which the Irish authorities, and society as a whole, has responded. Wages have been cut, often with workers offering pay cuts in exchange for greater job preservation. Public spending has been cut, more sharply than in any other EU member state. So Ireland is adapting to tough times.
Eventually growth will resume in Ireland as elsewhere. When it does Ireland will become a more ‘normal’ economy in the sense that it will grow at a rate of 3 or 4 per cent, not the 7 or 8 per cent of the boom years. Much of the growth spurt was catch-up, getting to where Ireland should have been. By the middle of the first decade of the twenty-first century it was just about there, so it was always going to have to adapt to slower growth. That will inevitably be tough both financially and socially.
The sudden burst of wealth that has hit Dublin from the early 1990s onwards has led to all the excesses you would expect. Stylish sure, but also flash, and that flashy element is much resented-and understandably so-by the hard-working people who have only partly shared in the dream.
The central point here is that, of course, all booms create excesses, and it is only when there has to be a shift to a more stable state that you can separate the froth from the substance. I have tried to argue here that there is solid substance to the Celtic tiger story, in particular in the education and quality of the Irish workforce and in the carefully crafted tax system of the country. It has faced a tough test and it will continue to struggle until secure growth is resumed. But when that happens, it will be an Ireland that is utterly different to the Ireland of even the early 1990s-an Ireland that looks outward, that is truly multicultural, that is increasingly influenced by the new Irish. For Ireland has been both an economic experiment and a social one.
The first has turned out to be a success story, albeit a flawed one. I am confident that in economic terms Ireland will resume its place as a beacon for the rest of the developed world.
The outcome of the great social experiment is less clear. It has invited huge numbers of other people to its shores-people who will become Irish but Irish with different attitudes and expectations. Over the next couple of decades, the new immigrants will create a new Ireland that will feel quite different to the familiar stereotype.
So there are risks but ultimately I see this as a human success story. It is about a group of political and economic leaders who got together with a mission not to carry on failing, and who then transformed the opportunities for millions of people-the old Irish and the new Irish-as a result. Walk down Grafton Street now and the place is still full of the ‘happy, smiling faces’ that led to my being brought up in Ireland. But they are different faces in the sense that they have come from all over the world. I think it is great.
I. WHAT IS THE STORY?
Cities are for people. Walk out in Copenhagen on a summer evening and the streets are full of … people. They are sitting in the cafés in the squares, dangling their legs over the quays of the old port, chatting, drinking, reading. At the Tivoli Gardens, the oldest funfair in the world, they are riding the roller-coasters. In summer the city is a festival of fun, like many other successful European centres. But Copenhagen has also managed, despite its northerly latitude-the same as Glasgow in Scotland-to become a nine-month summer city, one where people extend the café society on the squares and streets to all but the very darkest of winter days and nights.1
How has it done it? Well, it could not tame the weather but it could succeed in taming the motor car.
All the cities of the developed world face traffic problems and some have coped better than others. But Copenhagen is special because it gradually, cautiously, and with the general support of its residents, transformed the medieval core back into being a place where people do not drive or take buses; they walk. Some 80 per cent of the journeys in the centre are on foot,2 with another 14 per cent by bicycle.
This transformation has brought a string of benefits. One is economic. Walking is the most efficient way of using crowded city centre space: if there are no cars or buses, thousands of people can go up and down a narrow street. The result is that the shops and bars are passed by more people-and pedestrians also spend more money. When a survey was conducted into how people travelled to the centre of Copenhagen, as opposed to the way in which they moved around once they had arrived, it was found that those