February 17, 2011
By Staff Reporter
The Paris club of economists — the Organization for Cooperation and Development — set the ball rolling last week by publishing statistics showing that the Republic was among the richest of its OECD member countries.
Given that almost every country with a decently sized economy to speak of is a member of the OECD club, then the Irish economy is definitely up there with the elite.
For its study, the OECD used 2002 economic statistics officially to place Ireland up there on the rostrum as the fourth richest in the world — behind tiny Luxembourg, oil-rich Norway and the superpower of the United States. So, in 2002 at least Ireland, was still trailing the U.S. in the world national economic league.
But even the OECD couldn’t quite believe it by highlighting the “remarkable” appearance of the Irish Republic among the group of “high income” countries with huge national wealth per head of population. Its surprise is the more remarkable given that the OECD’s own Irish desk has tracked the relentless growth of the economy here over the last ten years.
The definition of national income is a straightforward sum to compute. You take an annual snap shot and measure the size of an economy by gross domestic product. You divide that number by your total number of citizens, babies included.
A debate here has traditionally raged around definitions of Irish economic wealth and whether GDP is the most appropriate measure given that the phalanx of U.S. computer and pharmaceutical corporate giants based here will sooner or later send the huge profits they generate back home. (The debate has ignored the fact that the sum you come up using the alternative Gross National Product measure hardly makes the Irish economy a tiddler either).
Anyway, a leading economist in Ireland brought the OECD figures up to date and showed that Irish economic wealth per head of population had, indeed, overtaken the United States by late last year.
Dan McLaughlin, chief economist at Bank of Ireland, calculated that Irish national income (GDP divided by population) amounted to