When you think of Ireland, green fields, luscious sweeping countryside, quaint farmhouses and medieval castles probably spring to mind. Ireland is undoubtedly a beautiful country but, upon visiting there you might be surprised to come across a sprinkling of Starbucks coffee houses in many cities, an Abercrombie & Fitch store on an old cobblestone street in Dublin and countless branches of large multinationals such as Intel, Microsoft and Facebook nestled in industrial parks on the outskirts of almost all of Ireland’s major towns. With a highly competitive corporate tax rate of approximately 12.5% it is clear that Ireland is committed to the promotion of foreign industry investment and to being part of the world economy.
But Ireland wasn’t always so industrially focused – at least not the southern part of the country (the south of Ireland became the Republic of Ireland in 1931 upon gaining sovereign independence from Britain.) At the turn of the 20th century, southern Ireland’s economy still very much centered around agriculture. Interestingly, as much as the south of Ireland’s economy relied on agriculture, Northern Ireland’s economy in contrast relied heavily on industry – mainly shipbuilding. In fact, both Northern Ireland and the south of Ireland had opposite policy approaches to their respective economies in the early years of the 20th century. The south of Ireland had a free market policy towards agriculture and a protectionist policy towards its limited industry. In direct contrast, Northern Ireland adopted a free market policy perspective towards industry and a protectionist attitude towards agriculture!
Northern Ireland’s heavy reliance on the world economy for the success of its shipbuilding industry proved catastrophic economically during the Great Depression. However, because the Republic of Ireland was not as heavily engaged industrially with the world economy up to this point, it remained relatively unscathed by the Great Depression. The turning point for industry in the Republic of Ireland came in 1938 with the signing of the Anglo-Irish Trade Agreement between Ireland and England. From this point, Ireland set about nurturing its infant industries via the promotion of more stringent protectionist policies in order to become more integrated with the world economy.
By: Fiona Logan