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July 18, 2005: Peter Sutherland, Chairman of BP and Goldman Sachs and UN Special Representative on Migration and Development, discusses the state of Ireland with anchor Daljit Dhaliwal.
DALJIT DHALIWAL:
Peter Sutherland, welcome to WIDE ANGLE.
PETER SUTHERLAND:
Thank you.
DHALIWAL:
That was quite a powerful image. We saw the doors closing on that church in Limerick. Did you think that you would ever see that happening in Ireland?
SUTHERLAND:
Well, I suppose I didn't in one sense. I was educated by the Jesuits and I don't like seeing a Jesuit church closing anywhere. But, having said that, I think that there are a couple of points about it. First of all, there's been a reduction in the number of people who are going to church. But, also, in that particular case, I would imagine that part of the reason is that a lot of the inner-city population have moved out. The tenements -- which were referred to in the context of earlier times in Limerick -- no longer exist. And most people are moving to the suburbs.
So, that's an element in this. And, therefore, the dramatics -- while it's dramatic enough in itself -- have to be tempered by a recognition that part of this is the result of prosperity.
DHALIWAL:
And, also, there has been a drop in terms of the number of priests that are being ordained as well.
SUTHERLAND:
Very significant.
DHALIWAL:
What is happening to religion in Ireland?
SUTHERLAND:
I think that religion in Ireland, as Father Murray in the previous piece put it, is following a course which has been evident in other parts of the world -- everywhere, virtually, in Western Europe. And there is a reduction in the number of people going to church.
Perhaps, it's related to a more consumerist society. There are a whole lot of reasons why that might be the case. There have also been dramatic events in the recent history of the Church in Ireland which haven't been positive in terms of its image.
So, all of these, I think, have conspired to bring about a situation where there has been a reduction in churchgoing. But, I think, I'm probably right in saying that we're number one or two still in Europe in the number of people who go to church on Sundays. So, the figures while say, reduced --
DHALIWAL:
Is it still a religious country?
SUTHERLAND:
Well, it's a question of how you define religion. And it's very difficult to look into people's hearts and how many people go to church because it's the norm to do so, and how many of these people do it as a general commitment and so on...
But, I would still say that the Irish people are very committed to religion in one way or another. And, certainly, the effects of religion continue. I think in terms of personal giving, to the Third World, for an example, Ireland is at the very top of the league of what people do and how they associate with the developing world.
And it's very interesting if you live in this part of the world, that when we see films of Somalia or Sudan or Darfur or wherever else, it's fairly likely that the person that you see in an NGO, who's out there working on the ground is Irish -- incredibly more, certainly, than the proportion of our population to the total population of Europe or the Western world would suggest. So, I'm not as pessimistic about the heart and soul of the Irish people as some people are.
DHALIWAL:
And what went through your mind when you saw that auctioneer extolling the virtues of the Sacred Heart church as a possible condo development or as a restaurant complex or possibly a bar?
SUTHERLAND:
Well, he also hoped that -- or said that it might be a place of worship. I suppose that that's unlikely as it's being closed as a place of worship. Obviously, you can only look at something like that with a profound sense of regret. It seemed to me to be a lovely church, just to look at it. And obviously, one regrets that, but perhaps it's the inevitable reality of the world in which we live and which you're describing, accurately.
DHALIWAL:
The march of progress, the march of progress in Ireland as well?
SUTHERLAND:
Well, progress is one way of putting it. It's the march of time and the way that events have changed people where they are, their perspectives and so on. It's a combination of all of those things.
DHALIWAL:
And do you think that it is inevitable that at some point, that that was bound to happen in Ireland, but it's a country that's now part of the global community and has totally arrived?
SUTHERLAND:
I'm not sure, really. I think it's more complicated than that because the implication of the question is that to be part of the global economy and the global world in which we now we live, people in the Western world have to drop spirituality or relationships with the Church or whatever.
I'm not sure that that necessarily is the case. I think it's a phenomenon. Whether it's a temporary phenomenon -- simply the result of a certain attitudinal situation led by consumerism perhaps, also by attitudes through the Church, some wrongdoings within the Church in Ireland.
Whether this is something that's reversible or not, I'm not an expert on this subject. I just don't know. But I'm not prepared to simply say that it's an irreversible situation. I don't know.
DHALIWAL:
Let's talk about Ireland's boom. Define for us where Ireland is today and how it's doing in terms of the global economy, its position within that.
SUTHERLAND:
Ireland has had a phenomenal period during basically the last 15 years where its growth has been far higher than comparable market economies in the Western OECD (Organisation for Economic Co-operation and Development) group of countries. And this phenomenal change has totally altered the society in which we live in a whole range of different ways.
It's been promoted by a series of external events which Ireland took advantage of. For one thing, in the early 1990s -- 1989 to 1991 in particular -- we saw the collapse of the Iron Curtain. So we saw the process of globalization taking a huge step forward. This is a very open market economy which relies on exports as the base for the growth that was subsequently to follow.
Secondly, in the period between 1985 and 1992 in the European Union we had the so-called 1992 Program, which was to remove all border controls, to remove borders and capital services, people, and so on across Europe. That's had a profound impact on us because we're a small economy, we're the English speaking economy in the Euro zone -- that's the Euro currency zone -- the only one and we're in that market.
So, our market is now over 400 million people. And that is now a market which is accessible which, in the past, wasn't.
DHALIWAL:
And a lot of these changes also started back in the late 1950s and 1960s. Give me some examples of that. For instance, there was a massive investment in education, corporate taxes were also lowered to attract multinationals... Give me some examples of how that was part of the boom.
SUTHERLAND:
Well, we joined the European Union in the early 1970s. And between 1970 and the late 1980s, we improved a little bit faster in GDP growth per capita than everybody else in Europe.
DHALIWAL:
But how did the Europe Union help that?
SUTHERLAND:
Well, the European Union helped by opening up borders, opening up opportunities, and also by providing structural funds. Now, the structural funds, which were transfers --
DHALIWAL:
Billions of dollars.
SUTHERLAND:
Billions of dollars, but it can be exaggerated. It is sometimes expressed in terms of being the reason for the development. I don't think it was, because I actually think that we wasted a lot of that money. We didn't build the roads. We didn't build the infrastructure in the way that we should've with the largesse -- largely, of Germany -- in the early years of our membership of the European Union.
It was the late 1980s when we were faced with a very serious economic crisis. In 1987 even, we had 17.1 percent unemployed. We had, in the northern part of this country, a revolutionary situation, a war situation, certainly a conflict situation.
We had a very high national debt. We had a relatively low GDP. It was less than 70 percent of the EU average. Today it's over 138 percent. Our unemployment is about 4.2 percent. Our debt is amongst the lowest in Europe. How did we do that? I think part of it was the attraction of low corporation tax. And that's a 1990s phenomenon not a 1960s phenomenon. We had some pockets of low tax before that where we identified areas like Shannon or more laterally some other parts of the country.
But, in the end of the day, the important thing was bringing down corporation tax to 12.5 percent which is what it now is. And I think that that's had a very significant draw effect. But, so also -- as you properly point out -- has education.
We have today -- per 1,000 people in the age between 19 or 20 and 30 years of age -- we have more scientists and engineering graduates than any country in Europe. So, that's remarkable. In relative terms, there are more engineers and scientists in that age group than in any country in Europe.
DHALIWAL:
And was that a deliberate policy at the time?
SUTHERLAND:
It was a deliberate policy.
DHALIWAL:
Why was that important? I mean, did somebody have some foresight at that point and realize that this is what we need to do? Was it accidental? Why?
SUTHERLAND:
I think it was recognized early on that unlike other countries, virtually every other Western country, we had never had an industrial revolution. We didn't have old industries here. We basically had agriculture and a few add-on industries of relatively small size. So, we had never gone through the big steel-making, ship-building, mining, and other major industries that other countries had had before.
And we vaulted -- thanks largely to our membership in the European Union -- directly into high tech, directly into highly productive industries like the whole computer information technology and pharmaceutical sectors which were the main focus for seeking inward investment. Secondly, we realized -- as many others have not realized -- that trying to build up national champions isn't the important thing.
DHALIWAL:
Why not?
SUTHERLAND:
Our national champions are whoever are here providing us with sustainable employment and good working conditions. The fact that they're American or Irish or British -- to my mind, at least -- is far less relevant. And I think we recognized that early on. So, we opened our arms to the possibility of bringing in huge investment from the United States. And there was no question of trying at that stage in the 1990s to build up an industrial base that we could call Irish.
And what, in fact, has happened is that this inward investment has spawned a whole lot of supporting sectoral industries -- small industries, small ideas that are beginning to grow. And we're beginning to show that we can do things on our own. Take RyanAir for an example which is number one, two, or three -- I don't know which -- in the airline industry in Europe.
DHALIWAL:
But is that enough in terms of indigenous investment? What if the multinationals were to pull out and they were to go and find a new market whether it is India or whether it's China? I mean, that's something that could happen.
SUTHERLAND:
The fact that they are multinational is neither here or there. If they are Irish, capital can move freely. They're as likely to move. The reality is shareholders demand profits. So, the fact that they're Irish or American doesn't make them more or less likely to move.
DHALIWAL:
But right now, they're in Ireland and if they were to move out of Ireland, I mean, that would be a bad thing for Ireland.
SUTHERLAND:
Of course it would.
DHALIWAL:
It would take away thousands of jobs.
SUTHERLAND:
But, the point that you put to me was -- am I not worried that they are not Irish firms. I am saying that even if they were Irish firms, they are owned by share holders. And they would be just as likely to move if they can't produce competitively here as if they are American. Now, of course I'm worried about the phenomenon that companies could move from here abroad. Everybody must be.
And the whole reality of an enlarged European Union with 10 new member states, with a very much lower per capita income and, therefore, lower cost base in some respects, than Ireland presents a challenge.
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Peter Sutherland, Chairman of BP and Goldman Sachs and UN Special Representative on Migration and Development
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