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The Rise and Fall of Economies Throughout History
Over the course of history, different parts of the world have experienced economic booms and busts. The Middle East, for centuries, was far more developed than Europe, Africa was wealthier than Central and Southeast Asia in the first half of the 20th century, and China was one of the richest regions in the world until the 19th century.
There are also examples of the opposite, with states and regions that were poor for centuries becoming economic, cultural, and scientific powerhouses. For much of history, Western Europe was the periphery of the civilized world, while the center was in China, India, and.
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The Rise of Ireland
Just like there are examples of countries that have gone from relatively wealthy to poor in a few decades, there are also examples of countries that have risen from poverty in just two generations and become some of the richest in the world.
Ireland is one of the recent examples. Not long ago, it was a poor country on the periphery of Western Europe, primarily trading with its neighbor, the United Kingdom. Today, it is one of the world’s industrial, scientific, and economic centers. Google, Apple, Facebook, X (formerly Twitter), Amazon, and many other major companies have their offices and operations in Ireland.
The Impact of Multinational Corporations in Ireland
Accenture and other multinational corporations have their European headquarters in Ireland. This has created issues, especially when measuring GDP, as the profits of these corporations artificially inflate economic indicators (the so-called leprechaun economics).
The Real Development of Ireland
However, even when looking at exports, wages, education levels, and other “real” indicators, Ireland is one of the most developed countries in one of the most developed regions in the world – the EU. This has been achieved over the past thirty years, and due to impressive growth in a short period of time, Ireland still remains a leader in the region.
The Celtic Tiger: Ireland’s Economic Boom and Bust
In the early 1990s, Ireland was experiencing a period of economic growth known as the Celtic Tiger. This term refers to the country’s rapid development and prosperity during this time.
Before the 1990s, Ireland had struggled with sluggish wage growth and rising unemployment rates. Despite efforts by politicians to stimulate the economy through high government spending and budget deficits in the 1980s, the results were not as expected. Unemployment rose from 6% in 1973 to over 16% by the end of the decade.
While the Celtic Tiger brought about economic prosperity and growth, it also highlighted the risks of relying too heavily on government spending and borrowing. The boom eventually turned into a bust, leading to a financial crisis in the late 2000s that had a lasting impact on the Irish economy.
The Economic Transformation of Ireland in the 1990s
In the 1990s, Ireland saw a significant turnaround in its economy. The country’s massive debt was restructured, taxes were lowered to attract foreign investment, and the decade-long investments in education finally paid off. International corporations used Ireland as a gateway to Europe, with many relocating their production there to take advantage of the highly educated workforce. The annual GDP growth in the second half of the 90s was close to 10 percent.
Global Expansion and Export Growth
Ireland began exporting to the entire world, not just the United Kingdom as before. The country’s economic transformation led to increased exports and a diversified economy, making Ireland a key player in the global market. This shift towards international trade further boosted Ireland’s economic growth and solidified its position as a competitive player in the global economy.
Impact of Economic Growth on Immigration
The rapid economic growth in Ireland led to an influx of highly skilled workers coming to work in various international companies from the USA. This resulted in a significant increase in immigration to Ireland.
South Korea’s Economic Status Compared to Africa
South Korea was once one of the poorest countries in the world, even poorer than many countries in Africa. While North Korea was the industrial center of Korea for most of its history, South Korea was primarily an agricultural region.
Shortly after the end of World War II, the Korean War broke out, which led to significant changes in the economic landscape of the Korean Peninsula.
The Economic Development of South Korea
In the 1950s, South Korea was struggling with economic development. However, the situation did not improve much in the 60s, with GDP per capita remaining at 10-12 percent of GDP. During those decades, South Korea more closely resembled a military dictatorship rather than a democracy.
Policies and Growth
It was in the 70s and 80s that South Korea saw significant growth, thanks to policies emphasizing education, exports, and technological development. With low taxes, a minimal welfare state, and government intervention in the economy through subsidies, South Korea implemented a model described as state capitalism or corporatism. South Korea emerged as a leader in…
The Economic Miracle of Spain
In 1997, the Asian financial crisis began, but the country managed to recover within a few years. By then, it had already reached a level of 50 percent of GDP per capita in the USA. The growth continued even after the stabilization of the Asian financial crisis in the late 90s, and today South Korea is at approximately 70 percent of the American GDP per capita, with numerous indicators (education, health, life expectancy…) in which it leads.
The Economic Miracle of Spain
Not as impoverished as South Korea in the first half of the last century, Spain is no less impressive. Today, Spain has managed to overcome economic challenges and is a thriving economy with a high standard of living.
The Spanish Economic Miracle of the 1960s
In the 1960s, Spain experienced an economic boom that was second only to Japan in terms of growth. Despite this, the Spanish Economic Miracle is often overlooked in history due to the dictatorship of Francisco Franco at the time.
After the end of World War II, Spain’s economy was struggling, and Franco’s emphasis on self-sufficiency did not lead to economic prosperity. In response, Franco appointed technocrats who shifted away from policies of self-sufficiency.
Economic Liberalization in a Transitioning Country
Political freedoms may still be limited, but economic freedoms are rapidly expanding in a country undergoing a period of transition. The state retains control over key industries such as the automotive sector, but overall economic liberalization has attracted more foreign and domestic investments. This has led to a boom in tourism and a growth in the real estate sector.
The stabilization plan introduced in 1959 by the new technocratic government eliminated barriers to international trade (imports), reduced government expenses, and abolished…
The Control of Prices
When considering the control of prices, it is important to note that the government still had strong control over key industrial companies. This approach can be described as a mixture of economically liberal policies with some form of state intervention, a form of corporatism or state capitalism.
Poverty is Not Destiny
It is true that every country that is wealthy today was once poor. Poverty is the initial state of every society, but they differ in whether they manage to find a path to wealth. Every society that justifies its…
Debunking Common Excuses for Underdevelopment
One common excuse for underdevelopment is a supposed historical injustice. Some countries blame their lack of progress on past wrongs done to them by other nations. However, dwelling on the past does not lead to growth and development.
War and Colonialism as Justifications for Underdevelopment
War is often cited as a reason for a country’s underdevelopment, but history has shown that even war-torn nations can bounce back economically. Similarly, colonialism is not a valid excuse, as former colonies have managed to thrive independently from their colonizers, while others have struggled post-independence.
Challenging the Lack of Natural Resources Argument
Another common excuse for underdevelopment is the lack of natural resources. However, some of the wealthiest countries in the world are resource-poor, while resource-rich nations still struggle. The abundance or scarcity of natural resources is not a determining factor in a country’s development.
Economic Development and Natural Resources
One of the key factors that contribute to economic development in countries is the presence of abundant natural resources. Countries like Norway, known for their developed industries, benefit greatly from their natural resources.
Accessible Economic Development
Economic development is not limited to just a few countries. Apart from the ones mentioned earlier, countries like China, Singapore, Taiwan, Italy, and Switzerland are also examples of nations that have achieved economic development through various means.
At the end of the day, the fate of countries and their people is not solely determined by their wealth or poverty, but rather by a series of institutions they have built; legal, political, social, and economic.
