IT HAS been a mixed week. With much of domestic attention understandably focused on the crime issue, other news has tended to take second place. Yet the comprehensive and in some respects radical proposals of the Constitution Review Group published in Wednesday - upon which I shall be writing in this column after giving them the attention they deserve - offer the prospect of important long term improvements in the quality of Irish life.
And the National Accounts data released the same day provide spectacular confirmation of the extent to which our economy has recently been outperforming not just the rest of our Continent but the rest of the world outside a handful of South East Asian countries.
Before considering why our economic performance has been so remarkable, a few of the key elements of this achievement merit highlighting.
First, because of spectacular economic growth during the past decade, the purchasing power of the average worker's output has risen from four fifths of the EU average almost to the level of the rest of the Union. Of course this average reflects, and hides, a wide range of different performances at the level of particular industries. But above all it is a consequence of the emergence here of an important high tech industrial sector as a result of major external investment.
However, because the ratio of dependents to workers has been very much higher here than in the rest of the EU, the divergence between our average material living standards, measured in terms of material resources per head of population, and those of the rest of the EU has been a good deal larger than the gap in output per worker.
But this dramatic improvement in average labour productivity has been accompanied by a sharp fall in our high ratio of dependents to workers. The numbers of children and unemployed are both down by almost one sixth by comparison with 1986, and the numbers working at home have fallen by almost one tenth, while in the same period the numbers at work have risen by almost one sixth.
As a result, and despite a continuing increase in the student population, the proportion of dependents to workers has fallen by one fifth during a period when this ratio has remained unchanged elsewhere in the EU.
This means there has been a significant reduction in the extent to which the output of the average Irish worker has to be shared amongst dependants, whether directly amongst his family dependants, or indirectly through the tax system amongst others not working. As a result, the previously wide gap between our average material living standards and those of our EU partners has narrowed greatly, to as little as one sixth today.
Now, why has this happened? Why has our growth rate during the past decade been twice as rapid as that of our EU partners; three times as rapid, indeed, in the last couple of years?
As is usually the case when any major change takes place, there is no single explanation: a multiplicity of factors has been simultaneously at work.
An important underlying factor has certainly been the tight fiscal policy pursued in Ireland during the past 15 years.
One can, of course, argue the merits of particular aspects of this policy as pursued by half a dozen different governments since 1981, including the relative merits of different kinds of tax cuts as against public and social service improvements.
But what is abundantly clear is that the shock effect on our political system and our society of the near bankruptcy of our State by the policies briefly pursued 15 to 20 years ago has had an enduring impact upon public and political attitudes to budget deficits, borrowing, and inflation.
Long before the Maastricht criteria provided targets for EL governments to aim at, Irish governments had become firmly fixated on these issues. And the recognition of this fact by financial circles both here and abroad has long since established a climate of confidence that has strongly favoured economic growth.
A SECOND major factor has been the remarkable scale of external, mainly US, investment in high tech industries here. These have provided high paying employment to an important proportion of our industrial labour force, boosting employment and exports in a manner that has no West European parallel.
But that in turn raises a further question: just why have we been so successful in attracting high tech investment? Clearly this reflects the success of the industrial policy skillfully pursued by the IDA, but the IDA had to have something positive to sell to the high tech sector in the United States.
As a small country with limited resources we were unlikely to be able to compete with other locations in terms of industrial grants. But we had the small country advantage of being able to act with flexibility in areas such as the tax code.
Our success in securing EU agreement to the conversion of our earlier tax free export regime into a 10 per cent manufacturing tax, and getting agreement to this regime being subsequently extended to the year 2010, has been a crucial element in our industrial promotion drive.
But not the only crucial factor. Another has undoubtedly been our non specialised educational system, and not just the system itself, but above all the high motivation and commitment of parents, pupils and teachers alike.
The proportion of young people of education age in our community is two fifths higher than elsewhere in Europe, and our per capita resources have until 10 years ago been two fifths lower, and even today are one sixth lower than in the rest of the EU. Against that constraining background only this motivation factor can explain our success in providing so many of our youth with the kind of education needed to attract high tech industries to our shores.
This motivation shows itself in the high proportion of young people staying on at school, which contrasts so markedly with the situation in England, and in the huge demand for third level education, which in Ireland is on a scale that seems to have no parallel anywhere else.
THAT our success in education provides one of the keys to our economic success is clear from the reactions of those external investors who have located industries here: when asked, the education system and the 10 per cent tax are the two factors most often cited by them as reasons for their choice of an Irish location.
There are, of course, other factors, such as the ironic, and from a cultural point of view perhaps regrettable, fact that we became an English speaking country. (When our ancestors taught their children English to help them to emigrate, they can never have envisaged a time when this process would help to bring industrial employment to highly skilled Irish young people here in Ireland, instead of pulling our youth away to jobs in Britain or America).
But this simply puts us on equal terms with our neighbouring island: it is education that has given us an advantage compared to the English, although not, of course, the Scots.
Perhaps our greatest weakness is our tendency to underestimate ourselves, and to spend much time contemplating, but too little time actually tackling, our many weaknesses.
However, in the past year or two it has been impossible to ignore the widespread recognition abroad of our remarkable economic progress. Instead of the previously inevitable question about the North, our economic success is now a subject equally likely to be raised by an interested observer meeting an Irish person abroad.