Tuesday, November 09, 2010

The Troubles In Ireland

You may have read or heard about Ireland's fiscal woes. But there is more to this tale than sovereign debt. The subsequent outmigration from the country has the bears out in force today:

Migration flows have reversed sharply in Ireland in the past two years, with Ireland losing more than 5pc of its labour market. A fall of 110,000 led to a net outflow of 35,000.

Gibson says, “House prices and overall economic growth will be severely impact by the subsequent fall in overall demand, consumer confidence and government investment, as a result of this outward migration trend.”

House prices will continue to contract for the remainder of the year and in 2011, said the report, and are unlikely to regain their peak values before 2010.

As a champion of geographic mobility, I am also aware of the costs of exodus. The conflict is a matter of policy. Encouraging emigration is a short-term fix. It eases the strain of unemployment. Longterm, you have a demographic problem.

Thus, the continual refusal of the Irish government to enfranchise its diaspora bodes ill for Ireland's economy once recovery gets a leg up on the crisis. Keeping in touch and maintaining trust would seem to be a small price to pay for future security. Why not provide expatriates with a stake in Ireland's well-being? I've yet to come across a good answer to that question.

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