Cronyism killed the Celtic Tiger

Those who like me follow the Irish social and economic scene closely must have experienced the pain of seeing a young small nation crash so badly after a decade of apparent successes. From being the darling of economic planners, especially those working in countries aspiring to join the EU, Ireland had to beg for aid from the IMF and the EU to help make it through this difficult patch. So what has killed the once much admired Celtic Tiger?

The economic and financial analyses of the root of Ireland’s problems are extensive and can be summarised in a few words: greedy bankers and speculators and incompetent politicians. But this is too much of an incomplete synthesis. It simply ignores the ingrained weaknesses of the Irish political culture.

Peter Cunningham is an Irish novelist and in his latest book Capital Sins he reveals the political rot that has now humiliated this lovely country. This novel is built on a plot in which a banker loans money to a property developer whose father-in-law, a Fianna Fail minister, is asked to deliver the necessary planning permit.

Fianna Fail – the Republican Party, was, until the recent political meltdown, Ireland’s biggest party with very strong credentials amongst the Irish for having struggled for independence from Britain. It has been in power for 53 out of the 84 years of its history, even if it hardly ever obtained more than 50 per cent of the popular vote. It has been continuously in power since 1987 with an exception of 30 months between 1994 and 1997.

Fianna Fail, which literally means “the soldiers of destiny”, was founded by Eamon de Valera, the father of Irish independence. It is a centrist party, slightly to the left of the other big party Fine Gael, but to the right of the Irish Labour Party that until recently had very little support in Ireland.

The selfless commitment to put the national interests first, so evident at the time of de Valera, gradually muted into a more pragmatic approach by Fianna Fail leaders who in the 1960s started to build alliances with wealthy businessmen, especially property developers and bankers, in return for party donations. The symbiosis between politics and big business soon became very confusing. The climax of this corrosive cronyism was reached during the time of Charles Haughey who became notorious for perfecting the system of political patronage.

While today’s Fianna Fail political leaders are not corrupt, the system they inherited and were nurtured in, contained a “virulent strain” that has weakened the economic and political management of the country. Many critics, including Cunningham, argue that the national interest has for the past decade been subservient to the interest of the Fianna Fail party in power.

Fianna Fail candidates and Members of Parliament know too well that the proportional representiation system that exists in Ireland can best be exploited by an extensive network of political cronyism. The prevailing system caters for the needs of a range of constituents ranging form old ladies needing to get urgent treatment in a state hospital, to property developers wanting to oil the wheels of bureaucracy to move ahead with their speculative building projects.

Peter Cunningham in an article he wrote in the Financial Times on Irish political cronyism explains how such a system can only work if friendly bankers and their regulators are hand picked to cater for “grassroots concern” in a small community where “everyone knows everyone else”.

Ireland goes to the polls soon and no one is predicting that Fianna Fail has the slightest chance of being re-elected. The Irish may be more stoical than the Greeks, but their anger is palpable. The next government will likely be a coalition of Labour and Fine Gael, with possibly the Greens included.

Enda Kenny, the Fine Gael leader and likely next Taoiseach (Prime Minister), has promised a cleanup of Irish politics to remove the “virus of cronyism” that has brought Ireland to its knees. Unfortunately, despite the present dejection amongst the Irish electorate, Kenny is not a popular person and this is a big handicap for a leader in times of national crisis.

But I am confident that Ireland will rebound sooner than many are predicting. Apart from the banking and property sectors, the Irish economy that is very export-dependant is recovering well. If the new government manages to rid the country of decades of cronyism and after a painful period of austerity, Irish eyes will be smiling again.

jcassarwhite@yahoo.com