“Ireland at a Turning Point”

Address by Julie O’Neill


Wexford Chamber

Friday 25th February 2011

Ferrycarrig Hotel, Wexford


Someone once said that timing is everything. Well I seem to get caught with interesting timings when it comes to delivering this particular speech.

It was originally scheduled for late last November just as Ireland received a visit from the IMF and that event was postponed at the last minute due to snow. Now I find myself speaking on the day of a general election.

In reviewing the notes I prepared last November, I found myself wondering how much the public mood has changed in those 3 months. I was struck by the fact that not a lot has moved on in some respects. Perhaps we’ve got some how used, or at least resigned, to the fact that the IMF and the EU are in town and have a greater say in our destiny. We’ve come through yet another very difficult budget. But perhaps what’s most striking is that today, at last, we get a say in the future leadership of this country. And that in itself is cathartic, giving us back a small element of control over our fate. I suspect many of us have given more careful thought to how we will exercise our franchise today than in many previous elections.

“I’ve Seen the Future Brother it is Murder…” – Leonard Cohen

Back around this time in 2006, I addressed a gathering of my fellow Secretary General’s in the civil service about an initiative by the Institute of Public Administration that attempted to map out a range of possible future scenarios for Ireland in the years leading up to 2020.

I began with a quote from Leonard Cohen, that renowned poet, singer and optimist. It went

“Give me back the Berlin Wall
give me Stalin and Saint Paul
I’ve seen the future brother
It is murder”

Well that line proved to be prophetic. The future is upon us.

I used to be an optimist but recently my naturally upbeat outlook on life has all but deserted me. I’ve been battered as we have all been by the relentless negative news and outlook about Ireland at home and abroad.

Last October, at a conference in UCD addressed by Bill Clinton, our own poet Seamus Heaney quoted Vaclav Havel on the distinction between hope and optimism. He said

“Hope is definitely not the same thing as optimism. Hope is not the conviction that something will turn out well. But hope is the certainty that something makes sense, regardless of how it turns out.”

So while I am not blindly optimistic, I am hopeful for the future of our country and our county.

But hope is not a strategy no more than outrage is a policy and so I‘ve been thinking about what is actually working well for us that we can build on.

Wexford Economic Forum, November 2009

In November 2009 I was asked by the County Manager to address the Wexford Economic Forum on positioning Wexford for an upturn in the economy. I reviewed my presentation to that forum with some trepidation during the last week and I was relieved to discover that most of the points I made were reasonably accurate, including the forecast upturn in exports.

Of course while I flagged the crisis in banking and the critical need to sort out the banking system while also putting the public finances in order, I did not appreciate the full enormity of that banking crisis and its potential to drag us down and almost take the Euro with it.

The banking challenge

We are all drowning in data about banking these days – much of it confusing – but a few stark statistics put the scale of the problem in perspective for me. At the peak, Irish bank lending was running at about 9 or 10 times our GDP. Private and public debt combined is currently at around 10 times our GDP and Irish bank lending is still over 5% of the Eurozone while our GDP is only 1.5% of that of the Eurozone.

As John Fitzgerald of the ESRI put it recently – if we could lift the albatross of the banking system off our shoulders, the challenge of stabilising the public finances is difficult but manageable and there are reasons to be hopeful in the real economy where industrial output, exports and other indicators of competitiveness are showing positive signs.

Reasons to be cheerful

It’s almost as if we are living in two parallel universes. Despite all the doom and gloom, there is evidence that the real economy in the private sector is stabilising and poised for recovery.

The private sector is the main driver of economic growth. We tend to forget that Government accounts for only 20% of GDP with enterprise and households accounting for 80%.

Our enterprise sector continues to perform strongly. We don’t always think of ourselves as an entrepreneurial race and yet established entrepreneurs account for more than 9% of the population.

For a small, extremely open economy like Ireland, the early phases of economic recovery always tend to stem from an uplift in global economic conditions. Our exports fared much better throughout the economic crisis than in other countries and are an extremely bright spot in a glum landscape. Exports grew by an estimated 10% by volume last year. We’ve now had 17 months of continuous export growth. We have the second fastest export growth in the EU and we recovered 70% of lost exports in 2010. This year new export sales are expected to exceed €1 billion. Our exports are also becoming more broadly based and are beginning to generate more jobs.

To quote Danny McCoy of IBEC: “Ireland continues to have a resilient, diverse and dynamic enterprise base on which to build future growth. In response to recession, Irish companies and their employees moved quickly and with a flexibility unmatched in any other country.”

We now have one of the most flexible labour markets in the world, with substantially reduced labour costs. Output per worker in industry increased by 12% in 2009 and by a further 16% in 2010.

We have regained cost competitiveness and this, along with our track record and corporate tax regime, makes us an attractive location for FDI.

We have begun to achieve critical mass in a number of high-tech sectors. 8 of the top 10 global medical technology companies have a manufacturing base in Ireland. 8 of the top 10 pharmaceutical companies and 10 of the top 10 technology companies are located in Ireland. 15 of the top 25 medical device companies are here and more than 50% of the leading financial services firms.

Alongside a strong multinational sector we have vibrant indigenous companies including our natural competitive advantage in the food and drinks sector where Wexford is well represented. Our image of providing natural, good quality food and nourishment to our neighbours remains a real badge of honour.  Growth in food exports is now outpacing growth in chemicals. Tourism is still a significant employer and, aligned with culture, presents us with an opportunity to rebuild our severely tarnished international reputation.

Our industry base remains strong, deep and dynamic with a good spread of enterprises – high-end manufacturing activity, services and more recently R&D.
GDP stopped falling last year on the back of the strong export growth and should show grow slightly this year. The current account of the balance of payments is in surplus, meaning that the economy as a whole is paying down external debt. There is evidence that the labour market is beginning to stabilise. We have good infrastructure which gives us access to an EU market of 500 million people.

We have great people, especially our young people and, according to the IMD World Competitiveness Report, have one of the best educational systems in the world. If you look at Ireland’s position in global rankings, as measured by such bodies as the World Bank, IFC and Price Waterhouse Coopers, we are 1st out of 36 developed economies for access to skilled labour, 3rd in the world for the flexibility and adaptability of our people, 3rd in the world for being open to new ideas and 4th in the world for labour productivity. According to a European Commission study of third level education, Ireland is 1st in the world for highly employable graduates.

So despite our woes and increased indebtedness we have far greater growth potential than other peripheral EU member states.

Unfortunately the painful “fiscal correction” we have to make will hamper and slow down the momentum for recovery but it won’t kill it off.  But growth prospects will be sluggish and this means it will be painfully slow to restore lost output and employment. It’s likely to take us about 8 years to fully recover the 14% slump in GDP from its peak in Q4 2007 to its lowest point in Q4 2009 But at least there are some tentative signs that unemployment has peaked at about 13.4% and while this may be largely due to emigration and more participation in education there has been a net increase in jobs in the multi-national sector in the last year and a modest increase in new job vacancies.

For all those reasons I believe that the strategy set out in the report I prepared for Wexford County Council – Towards Sustainable Growth and Development – remains the right one and I’m delighted to have been updated by the County Manager on the significant progress that has been made on it in recent months, especially in the areas of tourism and developing the web presence for Wexford. I’m also delighted to learn about the many collaborative initiatives under way. The deepened awareness of the need to pull together may prove to be the most durable outcome of the strategy.

How it feels to be Irish right now

Despite the reasons to be cheerful, there is no doubt that it will be at least 2012 before business and consumer spending will turn positive. Because of sluggish consumer demand, the early stages of recovery will lack the feel good factor for most households and domestic facing businesses. So I want to change tack now and get away from facts and figures to talk about how it feels to be Irish right now and our coping strategies as individuals for the state we are in.

I’ve just returned from visiting my daughter in Australia where we were joined by my son who lives in China – an increasingly typical Irish family with both offspring emigrants. It was disconcerting to pick up the property supplement of the Sydney Morning Herald which was thick enough and with prices sufficiently eye-watering to provoke a wave of nostalgia for the Thursday’s Irish Times of a few years ago.  It was even more disconcerting to have a homeless man sidle up to me on a park bench in Sydney and say “is it really that bad in Ireland…?”

All the same, it was refreshing to be in a recession free zone for a while and to reflect on just how much mood can define how we view and portray ourselves. I started feeling different about being Irish while I was away, only to be brought back to earth with a bang by the first taxi driver I encountered on my return to Dublin who was of the “will the last person leaving turn out the lights” school.

It seems to me that we are going through:

a collective grieving process  -  anger and disillusionment, the sense we have of being let down, fear for our livelihoods, our jobs, our savings, our old age, our children’s future

  • regret for the loss of our Celtic Tiger dreams and lifestyle, for the loss of our self-confidence as a nation, the loss of control over our own destiny
  • periods of denial when we still kid ourselves that once the public has a “say” we can make it all ok.

Some of us, if we are truly honest, have also been feeling guilty – guilty about some of the small choices we made in our own lives – the extravagances of those heady years, the money we needn’t have spent; the loans we needn’t have taken out; guilty about the actions or inactions in our own professional careers that may in some way have contributed to this crisis.

For my part, as a former senior civil servant, I often think about the collective failure of the administrative and political system to spot and head off what happened; what it says about our policies, our laws, our regulatory systems, our interpretation of our role as public servants. And that brings me on to deeper questions – what lessons can be learned to eliminate the flaws from our systems of governance and tighten regulation without killing off the capacity for innovation and risk taking; how we can change the way we manage this country we all love so that it feels right and our confidence in leaders and institutions is restored.

But most of us, if we are honest sometimes simply feel scared, with a constant knot of tension in the pit of our stomachs.

I keep seeing in my minds eye the photo from the front page of the Irish Times on the 9th of November last of the surfer riding the prowler wave off the Cliffs of Moher. It seems like a fitting metaphor for Ireland right now – a lone individual dominated by forces way beyond his control yet somehow resilient.

The Finnish have a word called “sisu”. There is no direct translation of it into English but it loosely translates as “doing what you have to do because you must” and is associated with strength of will, determination, perseverance, acting rationally in the face of adversity.

“The Man Watching” by Rainer Maria Rilke

In these extraordinary times, we need to think not just about what we have to “do”, what policies and strategies to pursue, but how we want to “be” when faced with the enormity of these challenges.

In times of adversity some turn to prayer, some look to economists or politicians or the media for the “answers”. I find I regress to a childhood habit of searching for meaning in poetry.

There is a wonderful poem by Rainer Maria Rilke called “The Man Watching”. It begins:

“I can tell by the way the trees beat, after
So many dull days, on my worried windowpanes
That a storm is coming…

And goes on:

“The storm, the shifter of landscapes, drives on
Across the woods and across time…

“What we choose to fight is so tiny!
What fights with us is so great!
If only we could let ourselves be dominated
As things do by some immense storm,
We would become strong too, and not need names.
When we win it’s with small things
And the triumph itself makes us small.”

What this poem reminds me is that sometimes success is in the small things. Sometimes the best way to be is to go with the fall, not to resist it. Sometimes we need to be forged by events, shaped by them like the steel in the furnace in Pierces when I was growing up.

The poem ends:

“Winning does not tempt that man.
This is how he grows: by being defeated, decisively
By constantly greater beings.”

Allow events to change you

One consequence of all that has happened is that there is an opportunity now to allow ourselves to be changed by events. Decisions that would have been unthinkable before, for instance in reform of the public service, become possible now. Old habits based on croneyism and petty politics become, I hope, impossible. There is a new reality. Out of this storm, out of this fire, comes the possibility for new creativity, new leaders, local well-springs of innovation and drive. In the work I do now as a consultant I am coming across examples of this happening time after time.

“The Journey” by Mary Oliver

Another consequence is that the range of options, of choices available to us now to get out of this mess is limited. It can take a long time to reach a point in our heads and in our hearts where we accept that stark reality. But a calmness and clarity can descend at that point.

Probably none of us in this room are in a position to make a direct contribution to resolving the banking crisis. We have to leave that in the hands of others and trust in the process, and the huge international importance attached to the issue, that a resolution will ultimately be found.

Meanwhile we can only focus on the things that remain in our control.

There’s a poem by Mary Oliver called “The Journey”:

“One day you finally knew
What you had to do, and began
Though the voices around you
Kept shouting
Their bad advice -
Though the whole house began to tremble…

You knew what you had to do,
Though the wind pried
With its stiff fingers
At the very foundations….”

There is something to me very powerful in that phrase “and began”. Sometimes the right thing to do is just get on with it, painful and all as the “it” may be.

And I sense that in this room, in this country, there are people who are saying in their own business “enough of the negativity” and taking their own small initiatives, demonstrating leadership in their own spheres to begin the slow and steady process of re-building their own businesses, our country and our reputation. And in the words of Mary Oliver:

“determined to do
the only thing you could do
determined to save
the only life you could save.”

It’s time to spread some positivity around

Anyway enough of the heavy stuff! Back at the Wexford Economic Forum in November 2009, I quoted some of American Management guru Tom Peter’s strategies for dealing with recession. Some of them are worth repeating:

  • you try to forget about “the good old days” – nostalgia is self-destructive and bores others
  • you buck yourself up with the thought that “this too shall pass” but then remind yourself that it might not pass anytime soon so you re-dedicate yourself to making the absolute best of what you have
  • you sweat the details as never before
  • you behave kindly but you don’t sugar coat or hide the truth – humans are startlingly resilient and rumours are the real killers
  • you find ways to be around young people – they are less likely to be members of the “sky falling in” school
  • you dig deep, deeper, deepest and always bring a good attitude to work
  • …. And then you pray….

Which brings me right back to optimism and hope. We need a new narrative – one based on positivity and hope rather than the relentless negativity that is playing havoc with national morale.

We’ve heard a lot about “contagion” in the capital markets in recent months and our friend Commissioner Rehn’s fears of bush fires becoming forest fires. There’s also such thing as “emotional contagion” and lots of evidence that people can “catch” negative emotional states as easily as you would a cold within seconds or weeks.  But happiness can also spread from person to person – having a happy friend living within a mile of you increases your own chance of being happy by 25%.

And the recipe for happiness contagion doesn’t require a loan on the bond markets or an IMF bail-out. It comes down to a few simple things:

  • Give: we seem to be happier caring about other people’s happiness
  • Relate: talk to more people more deeply
  • Exercise: release some feel good hormones
  • Attend: with sight, sound and touch to what’s going on around you
  • Engage: be open to learning something new.

Lao Tzu

I started with a living philosopher and poet. I’m going to end with the words of a Chinese philosopher called Lao Tzu and written perhaps as early as the 6th century BC:

“Be careful what you water your dreams with.
Water them with worry and fear and you will produce weeds that choke the life from your dream.
Water them with optimism and solutions and you will cultivate success.
Always be on the lookout for ways to turn a problem into an opportunity for success.
Always be on the lookout for ways to nurture your dream.”

And that’s my hope for Wexford.

Thank you.