proyecto reforma estructural del estado paraguayo (la experiencia irlandesa, donovan) abril 2011
TRANSCRIPT
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The Irish ExperienceDavid ODonovan
DirectorInvestment Promotion Agency Development
December 15, 2010
www.communique.ie
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Six Themes
I. Brief Facts
II. Irish Economic Transformation
III. Success Factors
IV. Current Irish Crisis
-.
VI. Conclusion
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Brief Facts Republic of Ireland
Small island on the western
edge of Europe rea: 70,000 sq m ess
than one sixth of Paraguay)
opu a on: . m Capital: Dublin (1.5m)
years o r s ru e
Independence: 1922 mem er s nce
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Irish Economic Transformation
From poor to rich in one generation:
one o e poores coun r es n urope w percapita of US$3,000
, ,
richest countries in the world
GDP: US$224 billion
Per Capita: US$52,000
Population has risen 50% to 4.24 million from 2.8 million in1961
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Irish Economic Transformation
Per ca ita GDP as a of EU avera e
180
200
140
160
80
100
20
40
60
0
Source: WorldDevelopment Indicators
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Irish Economic Transformation
Irish exports have changed dramatically:
Primarily agricultural High value added, high
services
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Ireland: Strategic Productive Transformation and Upgrading
Source: Devlin-Moguillasky (2009)
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Success Factors
Major factors underpinning rapid
rowth:
NATIONAL CONSENSUS/SOCIAL PARTNERSHIP
PPA BODIES FOR SPECIFIC FUNCTIONS
LOW TAXES
AGGRESSIVE CAMPAIGN FOR FDI
RD1
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Diapositiva 8
RD1 Add a "national medium-long term strategy fpr productive transformation" as first point. And in presentation can say the strategy emeged fromand was supported by the Partenrship and the Consensus it managed to develop.
Add after Education "Major public financial support for science and technolgy and innovation".Roberttdevlin; 13/12/2010
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Current Irish Crisis
crisis in Ireland which resulted in the recent il h IMF n E in n illi n
rescue package?..
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Current Irish Crisis
Partly, as a result of phenomenal growth:
Ireland over-invested in construction and property development
Fuelled by massive and cheap borrowing by Irish banks
Huge property bubble burst in 2008
Government bailed out Irish banks to prevent collapse
Result is massive public debt
Government forced to raise 15 billion over next 4 ears in reduced
expenditure and increased taxes to reduce deficit
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Current Irish Crisis
But also, institutional failure to anticipate
crisis:
Culture of light-touch regulation meant Central Bank/Financial
Regulator failed to spot build-up of excessive borrowing by Irish banks Public-Private Alliance bodies failed to recognize shift from
investment/export led economy to property construction led economy
Both the general public and policy makers blinded by phenomenalrises in incomes
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Public-Private Alliance
-Alliance bodies
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Public-Private Alliance
Based on Public-Private
1. National Level (Economic and SocialPolicy).
(Competitiveness and Industrial Policy)
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Public-Private Alliance
Public policy model adapted by Ireland was
that of a networked develo ment state: Different from more bureaucratic and authoritarian
As a small, liberal European democracy Ireland could not
a op a cen ra ze au or y mo e e e s an coun r es
Irish state interventions operate through networks of publicagencies and advisory councils all with strong private sector
involvement
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1. PPA at National Level (Economic
Policy failures from 1930s led to
Severity of crisis brought-
Private Alliance and NationalConsensus
New direction for economic and
industrial policy agreedEvidence-based approachadopted
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1. PPA at National Level (Economic
ew rec on op e
(1970s onwards):
Trade opening and expansion of
Private sector investment-ledrowth not overnment sector
growth
Private sector with stron stateencouragement/support to be theengine of growth
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1. PPA at National Level (Economic
Cornerstone underpinning rapid
Irish economic growth
Government, employers, labour,farmers academia and NGO
sectors all had voice indeveloping strategies
Under the umbrella of the National
Economic and Social Council(NESC) since early 1970s
Ministers Department
RD3
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Diapositiva 17
RD3 Add bullet "l NESC reports on consensus positions influential inputs in National Development Plan"Roberttdevlin; 13/12/2010
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1. PPA at National Level
Government Secretaries General of 7 departments (ministries)
Private Sector 5 from business associations Labour 5 from trades unions
Farmers 5 from farmer organisations
o un ary rom organ sa ons
Other 5 independent representatives, normally technicalexperts or academics
Term of Office is 3 years
RD2
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Diapositiva 18
RD2 Add another bullet saying how nominated and confirmed for 3 year term.
I think each sector nominates and PM confirms. Indicate whether confirmation process tends to be conflictive or not.Roberttdevlin; 13/12/2010
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1. PPA at National Level
In the early days, and up,of:
Interdependencebetweensocial partners
Tradeoffsboth betweenand within interest rou s
RD7
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1. PPA at National Level
New deal with trades unions wage moderation in
share in future growth
dialogue of the Alliance.
RD6RD7
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Diapositiva 20
RD6 You have to mention that the NESC partnership dialogue is supported by a neutral but very technical secretariat with a non political publicallyrespected DirectorRoberttdevlin; 13/12/2010
RD7 Add that a technically credible technical secretariat facilitates fact based dialogue and problem solving.Roberttdevlin; 13/12/2010
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1. PPA at National Level
Private setting to facilitate frank discussion
(25)
Political relevance by meeting once a month for half day or more
and presence of PM office Dialogue oriented to fact-based problem solving with support of
Representatives exclude themselves when discussion is on a
topic where there may be a conflict of interest 3-year public report of Alliance conclusions and periodic
publishing of Secretariat studies
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1. PPA at National Level
e o n us r a peace, wage mo era on anlow inflation with strong buy-in from Trades
250
STRIKES1.600.000
DAYSNOTWORKED
150
200SocialPartnership
800.000
1.000.000
1.200.000
1.400.000
Social Partnership
0
50
100
200.000
400.000
600.000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Source: ILO (International Labor Organization)
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1. PPA at National Level
But, unfortunately: urrent nanc a cr s s as put nto era e stra n onpublic-private alliance model
overnmen mp emen ng ma or cu ac s nexpenditure and increases in taxation
-years
Result collapse of PPA at National Level in area of
economic and social olic
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Public-Private Alliance
2. Public-Private Alliance at
Sectoral/Thematic LevelCom etitiveness and Industrial
Policy).
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2.PPA at Sectoral/Thematic Level
Competitiveness and Industrial Policy
Combination of government,agencies and advisorycouncils
Each with its own specialistfunction
All well funded bygovernment with focused
RD4
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2.PPA at Sectoral/Thematic Level
Competitiveness and Industrial Policy
Boards contain both publicand private members
-for CEOs to help co-ordinate industrial policy
support programs Professional, permanent
change with changes of
overnment High degree of operational
autonomy for publicexecu ng agenc es
RD4
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Diapositiva 26
RD4 --How are board members named.--Mention can include representation from hosted MNCs who are important for the economy.Roberttdevlin; 13/12/2010
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2.PPA at Sectoral/Thematic Level
2 PPA Sectoral/Thematic LevelRD5
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2.PPA Sectoral/Thematic LevelCompetitiveness and Industrial
Policy
National Competitiveness Council (NCC) has
16 Members:
Government 4
Private Sector 8
Academia 2
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Diapositiva 28
RD5 What does the NCC do in contrast to NESC?? How does it fit into a Division of Labor??Roberttdevlin; 13/12/2010
2 PPA Sectoral/Thematic Level
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2.PPA Sectoral/Thematic LevelCompetitiveness and Industrial
Policy
ecre ar a an pro ess ona researc ac esprovided by Forfas, the State Strategic
ann ng gency or n s ry oEnterprise, Trade and Employment
Reports directly to Prime Minister of the day
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Strengths
At National Level (Economic and Social
Polic NESC represented all the social partners and its reports were
NESC argued for a developmental welfare state
Good economic development and better social development
not opposed to each other but not guaranteed to occur
together
Argued successfully for better coordination between economic
and social policy
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Strengths
At National Level (Economic and Social
P li Led to eight national wage agreements over two decades
ac a e re an s ong erm eve opmen s ra egy eavy
investment in education, attraction of inward investment and
full European integration
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Weaknesses
o es a a ona eve an
Sectoral/Thematic Level (Forfas and NCC)
developed parallel but weakly connected analyses
Crisis of 2008-2010 exposed significant weaknesses
in Irelands overall policy approach
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Weaknesses
Major weaknesses seen to be: o ca
Institutional
Regulatory
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Weaknesses
Political:
Divergence between political decision making and policy analysis in
the institutons
Led to policy capture by influential actors from construction and
banking closely aligned to governing party
Won excessive tax incentives for construction further boostin a boom
already under way and created illusion mistaking asset inflation for
real wealth creation Led to loss of previous developmental focus
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Weaknesses
Institutional:
Trades Unions saw the creation of the National Competitiveness
Council as favouring the business agenda
Regarded it as giving employers a separate and stronger institutional
channel of policy influence with the Government
Probabl was a mistake to create the NCC outside the institutional
structure of the NESC as it balkanized the social dialogue
Ma or diver ence between wa e bar ainin in the ublic sector(highly centralized) and private sector (localized)
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Weaknesses
Regulatory:
Regulator to see the build-up of massive and excessive
Tragedy is that complacency at the macro/financial level and in
the Alliance created a crisis that undermined a very successful
strategic industrial policy for productive transformation at the
sectoral level
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Conclusion
Ireland enjoyed phenomenal growth and success in the period
1970 to 2008
Some lessons can be learned from that what made it work so
well
resulted in the current economic crisis
essons can e earne rom a oo
Nevertheless the economy still exhibits many sectoral
strengths in manufacturing, particularly high tech
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Conclusion
e e a e a ou e causes o e cr s s an our
future development rages on in Ireland
For those interested some interesting websites
con a n ng ese e a es are:
www.progressive-economy.ie www.irisheconomy.ie
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THANK YOU!