Ireland Energized by ‘Celtic Tiger’ Economy

Construction workers like Tom Deery once took it for granted that if they wanted to cash in on their skills, it meant casting a cold eye on Dublin and toiling instead on foreign soil.

But that tradition of no-frills, often lonely labor in London or New York seems a distant memory for Deery and his dozen workmates. For Dublin today is the place to be, the eye of Ireland’s “Celtic Tiger” economy, the most buoyant and confident in Europe.

Against the odds of history, economists are predicting this 5-year-old Irish success story will defy global uncertainty and keep purring along through 1999.

“There’s never been so much work available. Anyone associated with the building trade can pretty much name their price and get it,” says Deery, 28, standing in one of the Mountjoy Square mansions he’s refurbishing and gesturing out the window to a building boom in full bloom.

“It seems hard to believe this is Dublin,” he says. “There’s silly money flying about the place.”

A five-minute walk away on the banks of the River Liffey, cranes mark the spots where the International Financial Services Center, a low-tax hub for foreign banks and investment houses, keeps growing beyond the government’s original ambitions.

“It’s great to see our young people staying in Ireland, setting their roots where they were educated,” says Gerry Kelly, spokesman for the Dublin Docklands Development Authority, which has built the Financial Services Center bit by bit to suit demand.

More than 6,500 people already work in the center’s corporate cathedrals, and Citibank Corp. is building its new 2,000-employee European headquarters at the site, Kelly says.

The project’s original 1991 goal was to fill 27 acres of waste ground with new development. The new target is 1,300 acres.

Ireland Emerges From Britain’s Shadow

“Ireland is no longer the land of leprechauns--thank God,” says Kelly, voicing the widely held view that the country’s move into high-tech industries and modern values is overdue. “The old images might hold an attraction for certain tourists, but everyone here now resents them.”

Across the street from the Financial Services Center stand a half-dozen gaunt statues, a memorial to the 1845-52 famine that devastated Ireland’s population--an estimated 1 million dead, 2 million others forced to emigrate.

Ireland didn’t prosper throughout most of this century either, with double-digit unemployment and emigration a chronic feature of life. But a combination of forces began turning the tide around 1994.

Ireland’s enthusiastic participation in the 15-nation European Union proved most crucial, allowing it finally to emerge from Britain’s shadow.

For the last decade, other European Union nations--particularly Germany, France and Britain--have contributed billions in development aid to Ireland as part of the project to promote economic harmony and a common currency across the union.

American corporations, meanwhile, increasingly have identified Ireland as offering the most attractive foothold in the European Union--low-tax, high-skill and English-speaking.

Within a few years, high-tech industries such as pharmaceuticals and computers--Dell, Gateway and IBM each employ thousands--have come from nowhere to dominate the Irish export economy, fueling the growth of suburban Dublin developments with names like Cyber Plains.

Irish Exiles Returning Home

On their trips abroad touting the Celtic Tiger story, government ministers can list a range of impressive statistics:

* Average annual economic growth of 6.9% this decade, including 11% last year, the highest in Europe; inflation of just 1.5% over the last year, among the lowest.

* Unemployment cut in half in the ‘90s, to 6.7%, and the number of jobs increasing by 3% to 4% each year.

* The lowest corporate tax rates in Europe, and a $1.5-billion budget surplus for 1997-98.

Most symbolically, immigration to Ireland has finally outstripped emigration. Many of last year’s 40,000 legal immigrants were exiles returning home, in addition to the continental Europeans and Americans drawn by job opportunities and a different pace of life.

But with prosperity, that traditionally sleepy pace is revving up, to many longtime residents’ dismay.

The unprecedented demand for houses and cars means the cost of property has tripled in some exclusive parts of Dublin, and the city now ranks among Europe’s most congested, with its meandering, narrow road network laid out in the age of horse carriages slowing to a temper-fraying crawl each morning and evening.

Real estate agent Ed Dempsey is struggling to buy his first home and spends two hours each day commuting by car the eight miles to his rented suburban apartment.

“I’m in a Catch-22 situation,” he says. “Obviously, being in the property game is great. My salary’s way up. But I’d need the market to crash to be able to afford the home I want.”

Builders and investors have benefited most from the Celtic Tiger. But ordinary workers face a trade-off between rising standards of living and a lowering quality of life.

The government, determined to keep inflation at bay, has negotiated a voluntary wage-restraint program with many unions and public bodies.

That policy has been protested by a series of strikes--by nurses, teachers, train drivers, police, even elevator-repair workers--illustrating how many people feel their straitjacketed paychecks aren’t allowing them to share in the boom time.

“To people like me, the Celtic Tiger means window-shopping outside all the new boutiques and being shocked by the prices on the display menus,” says Siobhan Fitzgerald, an elementary school teacher. “The government keeps telling us there’s low inflation. But a lot of this ‘new’ Dublin is financially inaccessible to the ordinary Dub.”

Dublin’s most prestigious department store, Brown Thomas, flaunts its designer excess just a few hundred yards from the cobblestone entrance of Trinity College, Ireland’s oldest university. Here the students are realistic about the hard work necessary to make their way up career ladders that didn’t even exist a few years ago.

“I’d have no plans to leave Ireland, unless it was to get a cushy job someplace in the States, like San Francisco or New York,” says Liam Dunne, a 22-year-old night student who works as a computer specialist for Norwich Union, a British insurance company.

He’s earning 24,000 pounds a year, about $36,000, and coordinates his social engagements on his mobile phone.

Dunne’s sister has just switched jobs from American Airlines’ European reservations center to the German financial giant Deutsche Bank, both of which are expanding their operations in Dublin.

Kelly, of the Docklands Development Authority, acknowledges that Dubliners’ lifestyles are rapidly changing, with the “old” Dublin of sleepy Sundays fading inexorably away.

“Certainly, for every gain there’s something left behind,” he says. “The pace has increased greatly--and the young people are really enjoying it. But Dublin is still a much slower, calmer place to live than London or New York. People appreciate this. They won’t let Dublin become just like any other city.”