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| ] (''punt'') served as the Republic's currency from ] until ].]] | |||
| The state known today as the ''']''' seceded from the ] in ]. The state was plagued by poverty and emigration until the 1960s and again in the 1970s and 1980s. The 1990's saw the beginning of unprecedented economic success, in a phenomenon known as the "]". | |||
| ==Effects of partition== | |||
| After the ], part of ] gained independence from the ]. Twenty-six ] became the ], while the other six remained in the Union as ]. There had already been a significant economic divide between the northeast and the rest of Ireland, but following ] both regions further diverged, with ], as the North's economic centre, and ] becoming the capital of the southern state. Partition had a devastating effect on what became Ireland's border area. ], for example, was economically separated from its natural regional economic centre of ]. The ] struggled to operate across two economic areas, finally closing across a vast swath of Ireland's border area (the only cross-border route today is between ] and ]). In general the economies of the Republic and that of the North were very weak, with the North having a higher standard of living due to financial subsidies from ]. Economic progress was dampened (or even reversed) in Northern Ireland with the event of the ']' beginning in the ], although the Republic nevertheless did not reach a similar standard of living until the start of the ] era in the late ]. | |||
| ==1922-1960s== | |||
| The establishment of the Irish Free State gave rise to the first serious attempt to industrialise Ireland. Farming became orientated around ] rather than tillage, with the industrialisation of processing of products and the export business. The country was gradually electrified and new factories were encouraged, such as the ] in ]. During the late ] the ] government began a disastrous dispute with ] over the payment of land annuities, called ]. The Irish state refused to continue land annuities, Britain put ] on Irish ], and the Free State retaliated by imposing tariffs on British consumer goods; this "economic war" was resolved shortly before the outbreak of ]. | |||
| During the early years of independence the state pursued a ] policy and sought self-sufficiency. This led to the state taking control of private interests in the name of the ']' - ] and ] creation similar to that in vogue at the time in many countries. Many of the industries which were brought under government control at the time remain under 'semi-state' control today - others were sold in the ] and ] whilst others simply were downsized or closed when the economic reality became apparent. | |||
| ==1960s== | |||
| In the ] the economy greatly expanded, under the leadership of ], many rehousing schemes were started to clear the Dublin ]s (including ]); the ] refocused on high technology and ] was encouraged. Education was also reformed to a large extent, the state built a ] system and later two ] institutions; both systems greatly expanded education, in particular technical education, ] education was also reformed and expanded. Entry into the ] (forerunner to the ]) in ] also added to Ireland's economic prospects. | |||
| The 1968 Buchanan Report was a significant report on the regional dimension to economic planning which had largely been ignored. The report, prepared by , investigated and recommended on the social and economic sustainability of industry in the regions. The reports recommended a limited number of development centres throughout Ireland, which would have a minimum self-sustaining size. This became quite controversial as there were less than a dozen of such places recommended. In the end local politics and patronage won out and the report was largely dropped with industry being ineffectively dispersed as local need arose. | |||
| However the boom did not last for long. ], ] and poor management of the economy by the government took their toll in the late ]. By the ] Ireland was referred to as the 'sick man of Europe' and was far behind its European rivals - frequent changes in government compounded the situation. The government, often led by the now disgraced ], presided over a decade of high emigration, unemployment (about 18% for much of the decade) and economic mismanagement. At one point the ] considered imposing strict economic measures. | |||
| ==1980s== | |||
| The 1980s in the ] was one of the state's bleakest times. An extremely irresponsible budget by the majority ] government in 1977, which included abolition of car tax and borrowing to fund current spending, combined with some global economic problems to ruin the Irish economy for most of the 1980s, causing high ] and mass emigration. It is generally accepted that the ] and ] governments made this bad situation much worse with more massive borrowing and tax rates as high as 60% (with one ] finance minister suggesting people were not being taxed enough). After joining the ERM in 1979, Ireland was also saddled for much of the 1980s with an overvalued currency, which wasn't rectified until the 1986 devaluation. Indeed a lot of the foreign money borrowed in the 1980s went towards propping up this overvalued currency. | |||
| This was also an era of political instability and extreme political corruption, with power alternating between Fianna Fáil and Fine Gael, with some governments not even lasting a year, and in one case, three elections in eighteen months. The problems were eventually dealt with starting in 1987 under a minority Fianna Fail government but with help from the opposition led by Alan Dukes of Fine Gael under what was known as the "]", with economic reform, tax cuts, welfare reform, more competition and a reduction in borrowing to fund current spending. This policy was largely continued by succeeding governments. | |||
| ==Celtic Tiger (1990s-2001)== | |||
| ''Main article: ]'' | |||
| In the ], the Republic's economic miracle began: the 'Celtic Tiger'. High ] rate, a low corporate tax rate, good economic management and a new ']' approach to industrial relations together transformed the Irish economy. By 2000 the Republic had become one of the world's wealthiest nations, unemployment was only 4% and income tax was almost half 1980s levels. During this time, the Irish economy grew by five to six percent annually, dramatically raising Irish living standards to equal and eventually surpass those of many states in the rest of Western Europe. | |||
| ==Recent economic circumstances== | |||
| Over the past decade, the Irish government has implemented a series of national economic programmes designed to curb ], ease tax burdens, reduce government spending as a percentage of ], increase labour force skills, and promote foreign investment. The Republic joined in launching the ] currency system in January ] along with eleven other ] nations. The economy felt the impact of the global economic slowdown in ], particularly in the high-tech export sector – the growth rate in that area was cut by nearly half. GDP growth continued to be relatively robust, with a rate of about 6% in 2001 and 2002 – but this was expected to fall to around 2% in 2003. Since 2001, GNP growth has been much worse, with an almost three-fold decrease in 2001 from the previous year. After a near stagnant year in 2002, growth started to pick up once again in ] . By ], growth rates had increased to around 3% and have stayed steady. | |||
| ==See also== | |||
| *] | |||
| *] | |||
| *] | |||
| {{Economic history}} | |||
| ] | |||
| ] | |||
| ] | |||