FINANCE

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(No Transcript)
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What doesnt kill you makes you
strongerFriedrich Nietzsche
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OVERVIEW

• Ireland 3 Steps forward. 1 step back.
• Perspective The antidote to recessions
• Business and the Demographic Dividend
• Government and the Density Dividend
• Economic Unity Irelands ace card.

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Ireland 4 steps forward, 1 step back
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But the Irish economy has gone from this..
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2005-2007 FROM TIGER TO GARFIELD
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.to this..
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SO JUST WHAT HAPPENED?

• 1994 April ESRI Medium Term Forecast for
  economy
• Growth avge 7 94-04, slowing thereafter to
  around 3
• But damage to cost competitiveness over 94-04
  lowered trend growth to 2.5 p.a.
• So growth should have been 2.5 05-09
• On average, by this years end, thats what well
  get

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2005-2009 A GAME OF TWO HALVES

• 2005 2007 inclusive Average growth just over
  6 per cent.
• 2008 2009 inclusive Average growth -3 per
  cent.
• Entire period Average growth 2.5
• Question What divides these two periods???

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2005-2009 A GAME OF TWO HALVES
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MARKETING THE ANTIDOTE TO RECESSION

• If the economy as a whole isnt growing, find out
  what is.
• Like
• Population 150,000 in last two years (CSO)
• Half a million people between 16 and 24 (CSO)
• World population to grow from 6 bn to 9 bn by
  2050 (UN)
• Number of people over 65 to double between 2005
  and 2025
• of worlds population in urban areas to grow
  from 37 in 2005 to 60 in 2025. This trend
  happening in Ireland also

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AND BY 2026

• There will be at least a half million more
  people in the country and possibly one and a half
  million more people
• CSO Population projections, Dec. 4th 2008
• Current Population is 4.3 million
• Lowest 2026 pop. will be 4.9 million
• Highest 2026 pop. will be 5.7 million
• EU Commission, Dec 2008 6.7 million in Republic
  by 2058 and 9 million on island of Ireland

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ECONOMIC UNITY IRELANDS ACE CARD
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BUSINESS AND THE DEMOGRAPHIC DIVIDEND
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GOVERNMENT AND THE DENSITY DIVIDEND

• Distorted approach to space density is holding
  us back from further growth
• - Inflated land prices behind huge loans to
  property sector
• - Feudal attitudes to land Failure to price
  properly
• - As monopoly good even Thatcher accepted its
  price needed to be controlled
• Failure to achieve Density Dividend meaning
• - Population sprawled out instead of rising up.
• - Over concentration in commuter belt rather
  than clustered towns, resulting in
• 1. long commutes and high prices
• 2. Small communities where provision of public
  transport, centres of health excellence,
  broadband not feasible
• 3. Lower quality of life due to distance from
  work, families
• 4. Weaker economic potential, FDI growth of
  local business
• 5. Rip-off Ireland as residents in smaller
  towns more likely to be exposed to local
  monopolies

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GOVERNMENT AND THE DENSITY DIVIDEND

• Good news With half a million pop growth by
  2020, there is plenty of potential to reverse in
  relative terms the spatial sprawl of the last
  decade
• We need to build up and in rather than out and
  across. We need fewer local authorities and
  national transport and planning agencies to plan
  city areas as drivers of regional growth. This
  will benefit rural Ireland far more than current
  sprawl.
• We should channel that growth into urban areas
  rather than commuter belts to achieve these
  population levels in our key cities by 2020
• Cork 250,000
• Galway 150,000
• Waterford 100,000
• Limerick 200,000
• Sligo 100,000

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The real cause of the banking crisis Land.

• Planning
• Growth is not clustered
• Blanchardstown, Swords, Skerries, Rush, Lusk
  other areas all saw substantial population growth
• Growth spread like butter
• Stamullen 2002 729 people 2006 2,487!
• High land and house prices that caused the boom
  and subsequent bust
• Militates against provision of public transport
• Militates against provision of quality public
  services
• Implications also for
• Cost of Living
• Quality of Life access to amenities
• Carbon footprint of sprawled housingheating
  car reliance

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ECONOMIC UNITY IRELANDS ACE CARD

• Republic of Ireland
• High cost
• Dynamic private sector entrepreneurial
• But poor public sector, bad public governance,
  broadband
• Northern Ireland
• Low cost
• High state sector, needs entrepreneurial drive
• But good broadband attitudes to getting things
  done in terms of infrastructure.
• If these were 2 companies, youd merge them
  immediately.

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CONCLUSIONS

• Message 1 Dont panic After a phenomenal
  economic performance since mid-1990s, we can
  survive a two-year recession. We are blowing
  froth off a protracted boom.
• Message 2 Demographic dividend Growth is out
  there but its just not aggregate economic growth.
  Demographic segments are providing huge marketing
  growth opportunities, globally and nationally,
  for marketers willing to exploit them.
• Message 3 Density dividend Government needs to
  change spatial strategy, town planning, land use
  and transport/broadband to cluster our population
  more effectively. Crucial to support NDP roll
  out.
• Message 4 The Best is Yet to Come On an island
  whose population is set to grow from 6 to 8
  million in the coming half century, we shouldnt
  worry about the future. Instead we need to start
  planning for it. Politics aside, a United Irish
  economy will benefit all inhabitants, north and
  south.