Wide Angle . Mixed Blessings . Transcript

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DHALIWAL: How rich is Ireland? SUTHERLAND: In terms of its income -- and GDP isn't a perfect measurement -- but, in terms of its GDP income, it is now one of the top two countries in Europe. DHALIWAL: That's astounding, isn't it? SUTHERLAND: Well, it is. And I don't like confusing something that one would like to say simply is correct. But, it isn't actually, totally, accurate because it allows for -- a lot of the money counted in that GDP is the income for multinationals coming into the country and going back out again. But, even allowing for that, we are certainly very much in the top half and above that of the EU. And our national debt is much lower than other people. And we're in a very strong position at the moment. There's no question about that. And it would be foolish to deny it. And we're very proud of it. DHALIWAL: And why is the national debt so low? I mean break it down. SUTHERLAND: Because we paid it off. I think we took a courageous decision when we went into the Euro which was very difficult to do in the early 1990s. Britain, after all, was staying out. And Britain was, by far, our largest market. And we decided we would break from that. It was a political decision which was the correct decision as it transpired. And that has given us a big up, I think, in terms of inward investment because people want to invest into the Euro zone. And we're in the Euro zone, obviously. DHALIWAL: Why do technology companies, especially the American ones like Intel and Dell and Yahoo and Google, choose to invest in Ireland? Why not somewhere else? SUTHERLAND: Well, it's a combination of things. It's the various things we've talked about -- its lower tax rate, highly educated society, English-speaking, culturally adaptable, and close to the U.S. and easy to relate to. And significantly, part of the European Union. The European Union, to me, is the key denominator of this. All of those things combine, I think, to make it an attractive place. Hopefully, when people come here from the U.S. to work and so on, they find it a congenial place to be, too. It still has a certain -- I hope I'm not excessively patriotic to say it -- but it still has a certain charm. DHALIWAL: And are a lot of Irish-Americans returning to Ireland? SUTHERLAND: I don't know the actual figures. But, anecdotally I would say quite a number are. You have to want to live in a smaller society. I mean, there are disadvantages, too. I mean, Ireland still is a small society. And you're not living in a grand metropolis. I mean, there's a big difference between London and Dublin or New York and Dublin. So, there is a cultural adaptation for somebody who wants to live here. But, there are big advantages in a small place. And the support systems of family and so on are still very powerful in Ireland. DHALIWAL: Let's talk a little bit about some of the tangible consequences of Ireland's economic success in terms of salaries, in terms of jobs, and career choices. SUTHERLAND: The results have been enormously beneficial. Obviously, costs have also risen. So, there is an off-setting factor to the advantages of increased income. I think one of our dangers is that that income growth will get too -- DHALIWAL: So, it's no longer a low-cost destination? SUTHERLAND: I think it still is a low-cost destination. But, it's a low-cost destination because we've the highest productivity figures virtually in the world. But, we don't by any means, have the lowest wages in the world. We have quite high wages and salaries. So, we have to be very conscious about that. And there is a risk here. And there are certain types of low cost industry which are very labor intensive that will not locate here. And those that are here have closed. I mean, there was Fruit of the Loom, for an example, was a big industry in the area of producing textiles. It's no longer viable. In the end of the day, textiles are going to be produced in low-cost countries. DHALIWAL: But, it's also a very expensive place to live. I was reading somewhere that Dublin is the 14th most expensive city in the world, not far behind New York or San Francisco when it comes to property prices. I mean, how is that going to be a problem? And how can you afford to live and work in Ireland when it costs so much here? SUTHERLAND: Well, I suppose, the simple answer to that would be to say we're higher than 14th if you were taking GDP per capita (LAUGHTER) in the world. So, it's not quite as bad as it seems. But, having said that, I think that it is true that costs have risen very rapidly. Part of the reason is that our population suddenly is going up and we have to create property for people to live in. There are very few parts of Western Europe, at least, where the population is growing. And because it's growing here, it obviously fuels a property boom. There are great dangers in the property boom because prices escalate. Land prices go through the roof. And the whole thing becomes destabilizing and damaging. But, that's why it's happening because our population is growing. DHALIWAL: But, the bubble could also burst. SUTHERLAND: It could. Yeah. DHALIWAL: And what would the consequences of that be in terms of Ireland's future? Forget about the boom for a second but, just in terms of the growth. SUTHERLAND: Well, if the bubble were to burst ...Things don't happen quite that rapidly. I mean what one could see is a reversal of the creation of employment to the creation of unemployment which would be a gradual process, I think one could have a situation where if interests rate, for an example, in Europe -- because interest rates are set by the Euro for us not by our own central bank -- if interest rates were to go up, people would find it very difficult to pay their mortgages and so on. And then, the property boom would no longer be a property boom. And then you'd have unemployment in property sector. DHALIWAL: And people have borrowed very, very heavily, haven't they during this period of boom and growth? SUTHERLAND: They have. They have. They have borrowed heavily. DHALIWAL: Does that worry you? SUTHERLAND: It worries me in the context of an inability -- if it were to occur -- to pay the mortgage repayments that they have to pay on their properties. I don't think we're going to have a massive explosion in interest rates as far as one can see, but it's a danger. And I think that borrowing is probably becoming a real worry. I think giving out very large sums of money without requiring significant deposits and so on, makes me slightly squeamish about what the consequences could be. DHALIWAL: Is this sort of contrary to the Irish character, this level of borrowing? SUTHERLAND: The problem in the past was nobody would let us borrow because they didn't think we could repay it. But, I think now maybe people have to be more cautious and concerned about possible downturns such as the one that you were talking about. I certainly wouldn't say that the Irish are averse to borrowing anymore than anybody else -- probably less. We've always been risk-takers. DHALIWAL: And while there have been a lot of people who have been doing a lot better, the gap also between rich and poor has been growing. How much of a concern is that to you? I mean, is that partly to do with the way in which the Celtic Tiger or at least its rewards are very, very uneven -- there is the kind of underside, very dark side to the Celtic Tiger as well? SUTHERLAND: I don't think it's quite as dark as your question suggests, to be honest with you. There are some people who've made very enormous sums of money. And, obviously, there are people at the other end of the scale who are not making enormous amounts of money. But, everybody has been raised by the development of the Celtic Tiger. We have a very low unemployment rate and the median rate for pay in Ireland is not low. In fact, in many areas, if you compare what people in the public sector are getting for jobs. For an example, they're getting more than comparative figures in Europe. So, of course, there are some black spots, but frankly, I wouldn't compare them at all to the sort of issues that you might have in the United States with ghettos and the problems of extreme poverty. We have poverty problems, but I don't think we should present this as being easy to find in Ireland, very deep issues. Certainly, we have to deal with poverty, but I don't think it's terrible. DHALIWAL: And, in terms of inclusion, how do you remedy that situation? SUTHERLAND: Well, the first thing we have to do is we have to improve a lot of our public services which they're trying to do at the moment. Our health service, for an example, I think we have to do even more with our educational processes. We have to ensure that we maintain the opportunity for employment. And we have to try to secure a continuing growth by getting inward investment, which means we have to remain competitive. I don't know that there's much more that you can do. You have to provide an adequate safety net for the people who are really impoverished. DHALIWAL: One of the characters that we see in our film is Farmer Deasy. I mean, his basic problem is that he might not be able to pass on his land to his son. What do you do for somebody like that in the Celtic Tiger island? SUTHERLAND: It's an inevitable reality that people in Western Europe are leaving the land and that the land and agriculture as we knew it in the past is changing. And all that one can do, I think, is soften that blow. And, I think, there is an attempt to do that in the agriculture sector by supporting people who no longer use land for productive capacities. In other words, take land out of production. But, it's a sorry thing in a country which is so devoted to land and its history on the land as Ireland. But, there's no simple answer. DHALIWAL: But, how do you retrain Farmer Deasy? I mean, what is he going to do -- become a software developer? I mean, what are his options? SUTHERLAND: I think you have to look at the individual and the opportunity for opening employment opportunities in other areas. It's difficult to be specific about people. DHALIWAL: Here's something that THE ECONOMIST magazine said. It asserted that Ireland had the best quality of life in the world. I mean did that surprise you? It wasn't always the case, right? SUTHERLAND: You won't find me denying that, but as far as I'm concerned, when it said we were the dead man of Europe, I think, in 1987, I didn't agree with them. It was always a good place to live, but it's a lot better now. But everybody likes their own place, so I don't want to exaggerate it, and I think it's a very personal thing. DHALIWAL: And when you look back at the boom years -- I mean, most of this is accomplished in a single generation -- what things do you find most striking over the last sort of 15 to 20 years? SUTHERLAND: Oh, the simple answer to that is the enormous change in the net disposable income of people which is so obvious around you in all our cities and even in the countryside. It's just been an enormous change. But, I don't, personally, think that the character of the people has changed. I know you get that here because -- DHALIWAL: More confident? More bullish? SUTHERLAND: Well, I think we always had an element of confidence, maybe excessively sometimes, but maybe slightly more. Maybe that's undoubtedly true. DHALIWAL: And perhaps they've lost that excessive touchiness that used to have towards the United Kingdom, towards Great Britain? SUTHERLAND: Yeah. Well, before we just had a peculiar relationship with Britain. I think establishment Britain always annoyed Irish people in some way. But, the English people never did. I remember an opinion poll in one of our Sunday papers about 20 years ago where the English were actually expressed to be the most popular external people, as I remember it, in Ireland. So, it was always more establishment, government. I don't ever remember really disliking the English people. We certainly have had a stormy history with them. They've had a stormy history with us. But, I think we get on reasonably well and, certainly, for many of us, including myself, they've been generous. DHALIWAL: Talking about ties between nations, what is the state of ties between the United States and Ireland? Have ties strengthened or are they weakening? What's happening? SUTHERLAND: The relationship with the United States has always been extremely close. But, on the other hand, like members of the same family, which in a way, we are, you can get disagreements, and those can sometimes be vehemently expressed. And therefore, I think that Ireland feels very at home with the United States. There are parts of the United States that seem like home. On the other hand, that doesn't mean that politically, everybody in Ireland agrees with everything that the United States does politically. And when they don't agree, like brothers in a row, they will make that very clear. And certainly there have been differences in the recent past between public opinion in Ireland and policy from the United States. But I wouldn't like to exaggerate that. DHALIWAL: Well, give us at least one example. SUTHERLAND: Well, I mean the most obvious one is the war in Iraq, where there certainly was a more negative view taken of that in Ireland. And there are differences and so on. But on the other hand, we feel at home with Americans, and many Americans feel at home here when they come here, from all political backgrounds. DHALIWAL: So are we going to see fewer young Irish men and women crossing the Atlantic because the opportunities at home are so plentiful? SUTHERLAND: Well, I think that there will be less going, obviously, because we've virtually full employment here, so that won't be a generator of movement. On the other hand, I think Irish people will still often wish to experience a bit of the world before they come home. And many will seek and gain additional educational qualifications in the United States. And I hope that there's an interchange which goes both ways. DHALIWAL: So it's really choice rather than necessary. SUTHERLAND: It's choice rather than necessity. DHALIWAL: Traveling for the experience rather than because it was a question of survival many years ago. SUTHERLAND: That's right. That's right. Absolutely right. DHALIWAL: You're an Irishman, born and bred. You live between Ireland and the United Kingdom for your work. You've been a former EU Commissioner for Ireland, Chairman of BP and Goldman Sachs in Europe, a senior United Nations official on migration. I mean if any person could be called the "Celtic Tiger" it would be, you, right? I mean, what do you think? Do you agree? SUTHERLAND: No, I've had the luck of Old Nick. But it hasn't been a disadvantage to be Irish in any of those roles. And I've enjoyed them. DHALIWAL: And you're proud of the Ireland of today. How it's turned out? SUTHERLAND: I've always been very proud of Ireland and I'm particularly proud of Ireland today. I don't think it's without flaws. Who is? DHALIWAL: What's its worst flaw? SUTHERLAND: Well, I think its worst flaw might be that we would become complacent and think that this automatically continues without effort. I think we're going to be faced with challenges every day. I think the whole world is faced by challenges in a competitive and interdependent world. And those challenges are not going to abate. So we have to learn to handle them. We have to continue to grow our skills, and to advance with what I hope will be an advancing world. Not on our own at the expense of others. DHALIWAL: Peter Sutherland, thank you very much for joining us on Wide Angle. SUTHERLAND: Thank you very much. I've enjoyed it a lot. Thank you.

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Peter Sutherland, Chairman of BP and Goldman Sachs and UN Special Representative on Migration and Development