Lessons from Ireland
Barbadian policymakers may want to take the Irish economic experience into consideration when formulating future economic and fiscal policies.
So said Roger Acton, Association of Chartered Certified Accountants (ACCA) regional director for Europe and the Americas, who believed there were many lessons to be learnt from the Ireland experience.
The Irishman, speaking last Wednesday at Hilton Barbados during a discussion hosted by ACCA Caribbean entitled Boom And Bust: The Irish Experience, said Ireland had transformed itself into one of the strongest economies in the world before squandering its position.
He noted that even when Ireland’s economy was thriving, several apparent threats were not acted upon, including the over-reliance on one sector for growth, an increasing civil service and the high cost of doing business.
“There were some serious concerns about the extent to which Ireland’s continuing high rate of growth was predicated on the construction sector. Economists warned of the need for greater diversification and they were right.”
Acton added that Ireland’s tax base was too narrow and depended heavily on transaction taxes to fund an ever-growing and costly public service.
Moreover, he told the gathering that telecommunication, transportation and other costs associated with doing business were too high to be sustainable in the long term.
“Other features which were there at the time but which were ignored included a very light-touch regulatory regime combined with some questionable corporate governance practices,” Acton said.
Looking back, Acton said the country should have been more aware of the inherent risks in smaller societies where a small number of people occupied all of the key roles.
“We should have placed a greater emphasis on independent oversight and learnt to live with any unpopular decisions that might have resulted.
“When we had the money we should have invested more in key infrastructure,” he said.