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The big picture

What the Baltics may learn from Ireland's success story

By Maris Biezaitis

Years of generous European Union structural support funds have definitely made more than a mark on the portrait of today's Ireland, but none of this may have happened if the Irish had just sat around waiting. The Baltic Course met with Ireland's honorary consul to Latvia, also president of Latvia's Rietumu Banka, Michael Bourke, and heard his version of the Irish success story, and what the Baltics could learn from this

Ireland has been part of the EU since 1973, and since then has changed completely from  a small agricultural based economy depending much  on the UK to a bustling modern embodiment of growth, which for recent years has even been employing thousands of foreign workers, including many from the Baltics. Ireland has many a time been stated as a good model the Baltics should look at in trying to determine their own path for the future, especially taking into account the many similarities found in historical, geographical and economical aspects between the Celtic tiger and each of the three Baltic states. Yet it's not as simple as just following the EU track and waiting for orders to come from Brussels, as some in the Baltics may see it. The EU has changed a lot in the past 20 years and the Baltics are also only a small part of the EU candidate country group promising to double the population of the EU, taking along other expected changes for most of the current EU states, which in many cases may not be too popular. Ireland voted against the Nice Treaty in 2001, but Michael Bourke says this had little to do with EU enlargement, as the issue was tied up with ten other things, leading to Ireland protesting against the bureaucratic central control felt coming from Brussels. This central control is what the Baltics seem to have been trying to get as far away from as possible for the past decade, but has been replaced with an order that could be deemed rather chaotic more often than not. Clear priorities aimed at NATO, EU membership and economic development may be cliches firmly rooted in Baltic jargon, but just as in a populist pre-election campaign, it's extremely tough for anyone to find out exactly how this will be done, or rather, what will be done once we achieve these goals.

In more ways than not the Baltics actually look quite similar to the picture of Ireland around 20 odd years ago, which poses the question of what happened in Ireland that made it the dynamic country it is today? The answer may point in the direction of what the Baltics seem to be lacking in order to be on the same track as Ireland was back in the Seventies.

"To achieve all this, it takes many years of planning and a clear vision and focus on what you want to do," said Bourke, adding that this lack of a clear focus is the main problem that must be tackled for the Baltics to get as much out of their promising futures as possible. "Back in the Sixties, early Seventies we decided that we wanted to break our dependence from agriculture and so on and build an industry like the IT industry, that would be clean to the environment with a high education requirement, therefore we could become a part of the high-tech of the future. We also wanted to develop our tourism industry, not trying to compete with sunny Spain, Portugal and Greece, but concentrating on rural country scenery, horse riding, walking, and good country food. We put allot of investment and money towards this. Education was set as a priority. There were certain fields we could not compete in with bigger countries, but being a small country we knew we could develop quickly."

With the Baltics set on joining the EU, a clear vision of what they want to get from joining the union is needed. "The Estonians seem to have a vision of what they want to do, their using Finnish investments and they've moved. Latvia and Lithuania can do the same. Connections with Latvian nationals abroad should be looked at for attracting industry and investment, Ireland did the same with its Irish connections mainly in the US."

Thinking big could also turn out a crucial aspect for the Balts. Rather than just sitting around waiting for Europe to come, small countries should get up and use what's there. Ireland seems to have been very active and fast in using the opportunities and funds EU institutions have to offer, planned how this all fits in to the economy and "Then lobbied like hell in the EU to get more and more," said Bourke. These funds are what Ireland used for developing its ports, roads, communications, educational system and much more, while this blueprint is not really visible in the Baltics yet.

The Baltics could learn a lot from how the Irish structured their institutions and organized themselves for these changes that brought them from a country with little industry, low employment and lots of emigration to becoming the second biggest software exporter in world with dynamic tourism, business and industry growth boosted by low taxation. Ireland was not always as politically stable as today, and 20 years ago was again very similar to the Baltics with governments coming and going. Yet a spark of unity must have kindled a change for the better when a social agreement signed by all political parties set out a number of main priorities the country was to aim for, no matter who is in government. "You have to look at the Big picture, rather than acting as little boys on a little street, you've got to be like in the big city, not just fighting for your own piece of the cake, because the cake is still quite small and its not growing that fast," said Bourke.

Obviously EU institutions helped Ireland allot along its way, and the country itself has squeezed every drop it could out of what the EU had to offer. Yet the approach to foreign investments is also crucial, Bourke, as others, saying that foreign investments should not be feared, and land should be sold for development, as there is no use in the state owning so much land and industry, while the people remain poor.

The disputed topic of privatizing state-run companies is still current in Ireland, while before anyone says the Baltics can also do the same by holding on to their own companies, Bourke was quick to say that the headaches from these companies, like the railways, mean that by his book, they should have been sold off long ago, adding only that safety and security should, however, be marked out and ensured beforehand.

The Baltics are more or less already on this track as part of the framework for EU accession. Ireland has declared it will open its borders to all new EU country labor from day one, unlike other countries like Germany, pushing for a transition period to free labor movement, but Latvia is already the single largest supplier of foreign labor outside the EU in Ireland today. This and similar cases should not be considered so much of a brain drain than a brain investment, said Bourke, so long as the country invests in getting these people back home once they are ready to. Although unemployment exists in Ireland, Bourke says people in the west have become very lazy and there are just some people you can't employ, and therefore it is not an issue. Labor exchange is also good for developing contacts, as business contacts between Ireland and the Baltics are starting to increase, bringing trickles of Irish investment to the region. With rural tourism taking over agriculture in Ireland, this may be another aspect the Baltics could look at, leading to the need for beneficial taxation policies and development projects for rural communities. Irish agriculture has fallen considerably in scale over the years, with only the larger farms now existing, with some food companies even making it to the top of the world's market. Many Irish farmers work on the farm by day and pack computers in the city by the evening, pointing at the shift in industry and a need for respective education.

The Irish model seems perfect in many ways, but the Baltics are thirty years down the track and despite the similarities, differences do exist, and Bourke says these must be looked at too. Other models like Denmark and Finland also exist, and the best should be taken from all of these.

After having spent 10 years in Riga, Bourke says today that the capital of Latvia reminds him of Dublin in the Seventies when he went to work there: getting busy, but still quite laid back and a lot of potential. "Living in Dublin today, may as well be the same as living in New York," says Bourke - this may be one aspect the Baltics should consider before following the Irish example, which by all means should be done as soon as possible.

The most attractive EU country to work in for EU candidates

Source: Tayler Nelson Sofres.

Helping each other out and national closeness

People from Baltic states were initially considered as a good way to fill the low profile positions that did not involve too much knowledge, just simple operations like harvesting berries, butchers, forecourt staff. This was at the time when the Celtic Tiger was just a cub and its economy was just starting to grow. Baltic staff showed good adaptation skills and quickly found their way in Irish work ethics and specific niches, many becoming involved in supervisory functions. I have gone the whole way from bottom to top myself. Starting as an assistant working at a Statoil garage shop I soon moved to site management and then administrative ranks in Statoil Ireland HQ, currently in the development of specific HQ IT solutions and data management. Working with my current Irish colleagues is a great pleasure. We from the Baltics have to learn and then bring knowledge together with contacts back home, the same as the Irish did with their compatriots mainly from the U.S.

Today there is a very diverse economic situation between Ireland and Latvia - the average Irish citizen's  income is four times the Latvian income. While the Baltic economy is still recovering from the Russian banking crisis and is only now is picking up speed again, the Irish are way ahead of us making even US officials look at the small country's achievements with admiration. It is nice to see the older people in Ireland are having what they deserve - sitting in pubs together with people they love, driving around, golfing or enjoying the races due to much bigger pension funding, achieved through continuous development inside the EU.

Nevertheless there would be things that I would hate to see happening in Latvia, like loosing our own language, so we must work hard to keep this. Even so, a significant part of the Irish way is their national closeness - they help each other in any aspect. The Irish even keep a close eye on things they buy, if it is not local, it has got to be way better for them to choose it. Every little bit helps. If we keep buying Chinese watches, eat Polish meat and drink Russian vodka then one day for sure we'll end up without no jobs and money - simple as that!

It will take some time to show that national values are at the foundation of the EU. A good trend is in the movement towards a balance between east and west, keeping our own national values, eventually leading to joining the EU. The fact is that it would be very hard for such a small country like Latvia to increase its GNP to the average EU level over tax barriers and without inside access to the European market, let alone extended investments. You cannot make money without spending it and you can't spend it without having it.

The strange thing I find is this absolute belief in joining NATO. I personally would see much more disadvantages in being a part of NATO than keeping our neutrality. Becoming an EU member and getting investments come into the country from both sides, that's where the shelter is for those people reaching towards NATO.

For comparison, I think Riga today looks like the Dublin of U2's Rattle and Hum video, shot quite a few years back.

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