The Medium Term Review 1997-2003 published today by the Economic and Social Research Institute is a landmark document which underlines our current robust economic health, while also providing a frame work for sustained economic growth into the new millennium and beyond. The economic forecasts that it makes could hardly be more upbeat economic growth is expected to average 5.5 per cent per annum over the rest of the decade and 5 per cent in the early years of the next century. By the year 2005 living standards in this State will reach the EU average. Indeed, per capita living standards will have increased by some 95 per cent in the 15 year period 1995-2010 if the forecasts are realised.
In truth, the Republic has enjoyed a remarkable reversal of fortune the "boom and bloom" which appeared to be no more than an idle political promise has now come to pass. The report points to some possible factors in this success the investment in education and training the success of industrial policy in attracting inward investment and the premium placed by policy makers on wage moderation and fiscal responsibility. The ESRI report places much store by the so called "demographic dividend" this will see a much greater percentage of the population in work at precisely the time that the number of "dependent" people in the economy begins to fall away. Certainly, this will provide the best possible framework for building on our current economic growth.
A great deal, of course, can go wrong. Monetary union may represent a great opportunity for the Irish, economy but it one that is fraught with dangers especially if sterling remains aloof. There are other potential dangers the rise in living standards will inevitably lead to a falling off in structural funds support from Brussels while the enlargement of the Union to the east, and the further reform of the CAP, must affect farm incomes. Most of all, there must be concerns that the continued economic boom will encourage un-realistic wage demands by workers and a profligate approach by government to the public finances.
The message from the ESRI is unambiguous fiscal discipline must be maintained in order to meet some new challenges and in order to confront some old ones. Chief among these must be the problem of long term unemployment which is set to remain stubbornly high even at a supposed time of plenty. Sustained growth provides an unrivalled opportunity to address the issues of unemployment and poverty, to replace what Fintan O'Toole in today's supplement calls the "social fatalism" of the 1990s it must not be squandered.
There are other challenges the need to balance economic growth with environmental awareness the need to develop the physical infrastructure (roads, transport energy) and the physical requirements for cultural and sporting activities the need to invest in primary and special education. That said, great progress has been made and continues to be made. The ESRI report points the way towards a more prosperous future for all the citizens of this State provided there is the requisite level of political courage and vision. It is to be hoped that the recent spectacle of the Government succumbing to virtually every lobby group in the run up to the election is not a portent of things to come.