Ireland vs. the Philippines

[omad]

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It's never too late!

A generation ago Ireland was the sick man of Europe.Today it is the richest country in the European Union after Luxembourg. This predominantly Catholic nation has never had a history that can be called quiet. From its early conversion to Christianity led by St. Patrick; to the entry of Oliver Cromwell, a fanatical protestant, which bred religious hatreds and civil unrest; to the Great Potato Famine in the 1800s; its colonization by the British Empire, and its eventual independence from British rule, Ireland's history has been rife with turbulence, violence, political and economic instability.

Ireland shared much in common with the Philippines. It was a country on the brink of economic disaster in the mid-80s due to a borrowing, spending, And taxing spree. Today Ireland enjoys a higher GDP than Germany, France And Britain. It also enjoys zero unemployment and provides jobs to 200,000 Foreign workers.

So how did this great turn-around occur and what lessons does it hold for our own country? According to Thomas Friedman of the International Herald Tribune, Ireland's formula for success is simple: invest in education, keep corporate taxes low to attract foreign investments, invest heavily in Infrastructure development, and undertake fiscal austerity measures to stop the vicious spending and borrowing cycle. Ironically, all the key steps undertaken by Ireland seems to be in direct contrast to the steps that our own government is undertaking to get our country out of ICU and shed off our image as the sick man of Asia.

Let's compare and despair...

Education:

Ireland invested heavily in education. In the 1960s, the country made secondary education free. In 1996 it offered free college education for all. The country never let its deficit reduction program interfere with educational investments. As a result, the country produces a highly-educated workforce, comprised of many engineering and science graduates, which has led to increased labor productivity.

In contrast, the Philippines is notorious for its low investment in education. Only 12% of the national budget is allocated for education. Debt servicing, on the other hand, eats up 35% of the budget. The paltry investment in education results in a highly-uneducated population and low participation rates: 90% for elementary, 58% for high school, and only 20% for college. Our proficiency in Science and Math has been on a steady decline. Passing averages in professional licensure exams (e.g. medicine,accounting, etc.) have likewise been declining steadily. Our best teachers are immigrating to other countries, some even working as domestic help.

Corporate Taxes:

In a drastic move to save their country, the government of Ireland slashed its corporate taxes to 12.5%, far below compared to the rest of Europe. They even went as far as giving preferential tax treatment to manufacturing and Financial industries taxing them only 10% in the 1980s. The results have been phenomenal. According to Friedman, 9 out of 10 of the world's top pharmaceutical companies operate in Ireland, as do 16 of the top medical device companies, and 7 out of the top 10 software designers. Foreign direct investments have increased from $100M in the 90s to $27B in 2002. Last year, Ireland got more foreign direct investments from America than from China.

Our own government has taken the exact opposite route.It increased our corporate tax rate to 35% under the new EVAT law, which is one of the highest in Asia. To give you an example, Indonesia's corporate tax rate is 30%, Singapore's is 20%, and Hong Kong's is 16%. As if that wasn't enough, certain features of the new EVAT law are clearly oppressive to business, such as the 70% cap on input VAT. This directly hits industries with low margins and who are on expansion mode, such as retailing, manufacturing, power and distribution etc. The direct foreign investment in our country in 2003 amounted to $319M a huge decline from the $1.3B levels in the 90s.

Infrastructure Development:

Ireland benefited greatly from European Union membership as it gave the Country much needed subsidies to build better infrastructure. In contrast, the Philippines does not get much external funding support for infrastructure projects, and on the few occasions that it does, a Senate probe is sure to follow. Government's own spending on infrastructure is only 2% to 3% of GDP, one of the lowest in Asia.

Now, how much of this allocation do you think actually goes to infrastructure development as opposed to bribes and kickbacks?

Fiscal Austerity:

According to Deputy Prime Minister Mary Harney of Ireland, the borrowing, spending, and taxing spree nearly drove her country under. This is when they finally had the courage to stop the vicious cycle. The government, the main trade unions, farmers, and industrialists came together and agreed on a fiscal austerity program. Aside from lowering corporate taxes, this program also included moderating wages and prices, and aggressively courting foreign investments.

In our own country, there has been no move to cut on borrowing as the government allocates more and more to debt servicing in order to borrow some more. Furthermore, huge portions of the internal revenue allotments go to the pork barrel fund.

How can we learn from the inspiring economic recovery of Ireland?
Perhaps we should all kiss the "Blarney Stone" and wish for the luck of the
Irish. However, the turn-around of Ireland had nothing to do with luck. It came
about as a result of instituting the right domestic policies, embracing
globalization, and unifying divergent groups to save their country.

What about us Filipinos? Do we love our country enough to save it? Are
We willing to put aside our own selfish interests, indifference, and apathy
to push for a better Philippines? The time for action is now! If we
postpone action, there may no longer be a Philippines to save.

And who knows, maybe like the Irish, we will one day find our pot of gold
at the end of the rainbow.

author unknown

[potterboy]

maylang ug mosugot ang mga kawatan.

[off^tangent]

lahi ra ug kinaiya ang mga Irish ikompara sa mga Pinoy. pangutana sa mga Pinoy nga naa sa Ireland

bitaw, seriously you're comparison makes some sense. The Irish story is applicable to all developing countries regardless of culture. but as I've said because of our 'kinaiya', I think we have a longer way to go. and with our present political situation, we have nowhere to go, unfortunately.

[omad]

i'm still hoping this will be an eventuality in our lifetime..

[fingolfin]

i'm still hoping this will be an eventuality in our lifetime..

... the answer is a big NO. Please recall, Rizal, Ninoy and all those hopefulls who wants the best for the country. they gave their lives for the betterment of the country and yet we are still disoriented. Not in our lifetime, omad. its sad but true.

[omad]

... the answer is a big NO. Please recall, Rizal, Ninoy and all those hopefulls who wants the best for the country. they gave their lives for the betterment of the country and yet we are still disoriented. Not in our lifetime, omad. its sad but true.

@fingolfin, growing up i was very optimistic about living in a place where it's clean, advanced, peaceful and progressive just like what's depicted in movies. i am living that dream right now but sad to say it's not in the Philippines. but there is something inside of me that aches coz i still want to see our country getting in a better shape than it's current state.

honestly in my POV, our country is going nowhere but deeper into the abyss with how things are going right now. with all the corruption, lies, cover-ups to the highest degree. it's hopeless, like cancer slowly consumming every cell of whatever's left with our dignity.

but after all's said and done, i'm still hoping for a miracle. but maybe you're right, it's clearly not gonna happen in our lifetime.

[Gwynhuever]

like omad i still hope for the best sa pilipinas...pero lisod man kay daghan kaayong pobre...so ang priority ang 3 basic needs of man ra intawon...food , clothing and shelter...so di gani ka buy/provide sakto nga garbage bags...mao nag kayamukat ang basura....pet peeve ayo ni nako ang basura...so gina train nako mga bata nga silingan to throw sa trash cans jud and not everywhere...sus after a few days nangawala man ang trash cans ako gi provide sa daplin2 sa dan....hasta trash cans kawaton man...

anyway ...naa man lain thread about how we should start the change tagsa2....within ourselves...bahala ginagmay...kay kon mo give up na lang sad jud ta mosamot ka makalu-luoy atong mga anak and their children...and their children...wa na jud unyay Pilipinas for them...

[vern]

Bla bla bla bla bla bla bla. Less talk, more action.

[shoeless_rebel]

hahahha... not in our grandchildrens lifetime. hutdon sa nang mga political families oi.

[north_star]

...i need a break.