In an exclusive extract from the forthcoming publication Ireland Inc: A History of Irish Business, TK Whitaker reflects on the success of his First Programme for Economic Expansion, and ponders the future of the Irish economy.
The economic backdrop could not have been less favourable when Dr TK Whitaker took over. Ireland was essentially a failed state: it was economically under-developed, with growth overwhelmingly dependent on agriculture. Emigration was rife and the standard of living was 60% of the European average.
Two years after taking over at the Department of Finance, Whitaker unveiled the seminal report Economic Development, followed by the First Programme for Economic Expansion white paper – generally credited as the biggest factors that kickstarted the Irish economy. The programme looked to diversify the economy and break down the massive protection barriers that were weighing on international trade.
Explaining the background to the report, Whitaker says: “I think what I was searching for really was some sort of arrangement of things that would work out well, because systems were elevating and I thought the Department of Finance had a particular responsibility in that regard.
“There had to be a foundation philosophy and a brave attempt to live by that. You can have an inverted pleasure in living a mess; you need to be a bit cold-blooded and sensible to offer any real guidance about policy.”
Whitaker says that the Taoiseach from 1959 to 1966, Seán Lemass, fully supported the First Programme for Economic Expansion. “I always had him in mind. He always picked the best way of dealing with things. He opened the way for people like myself who had some qualification to participate and be given the chance of being listened to on policy improvements and long-term policy methods.”
We needed all the stimulus we could muster because of the smallness of our economy
Dr Whitaker says that one of his personal highlights from that period was changing the Department of Finance from an inward-looking organisation to an outward-looking “have a go” culture.
One of the central tenets of the First Programme was opening Ireland up to international investment. The Industrial Development Authority was a key part of this strategy.
“It was very important. You know, governments need policy advice to keep them on the straight and narrow path. It is a tremendous advantage to any country if it develops a very good advisory body with advisory functions – there are so many countries and so many difficulties [to achieve] progress of a sustainable kind, you have to try and create a little idolatry of forwardness, of forward-looking care, the elements of good investments and good management.”
BALANCE OF INTEREST
The decision to join the European Economic Community (EEC) in 1973 was another pivotal moment in the development of modern Ireland. Dr Whitaker says that the move was just as important from a psychological perspective as it was in terms of economic development.
“I felt it was very important – actually vital. We needed all the stimulus we could muster because of the smallness of our economy, because [of the] agricultural economy mainly. We weren’t sitting on any great goldmine – that we could see anything or induce policy action. I think all the whole we got by and it was because people like [previous taoiseach Eamon] De Valera realised that they themselves were at sea as far as their long-term policy was concerned, and it shifted the balance of interest of those who could see a way through what was then a very narrow gate.
“I think we’ve been very fortunate – I mean, luck has been on our side that an entity like the EEC evolved: that came at the right time when we realised we had to be competitive to make our way in the world.”
The EU has experienced a number of crises over the past few years, so much so that there are concerns that the 28-member bloc could unravel. Despite ongoing problems, Dr Whitaker says he is hopeful about the region’s future and Ireland’s role within it.
“I’m glad that now and again some very deep thinking is done. I don’t think we really have adopted any isolationist view about Europe. But of course it’s still something to worry about because we have a lot of emigration and migration is becoming a huge issue.”
FOCUS ON EDUCATION
Ireland has been very successful at attracting foreign multinationals over the past 40 years, but the development of indigenous business has not always received the policy attention it deserves. Dr Whitaker says that it is very important to have a comprehensive planning strategy in place.
“It is very important to have planning for the future, and that it is worked on by major public policy people. For a long time we were solving our problem by deserting our country. There has to be an integrated plan of action.”
I do believe it is time to refresh and judge again; things don’t stand still
Since the economy crashed in 2008, emigration – the blight on economic development for most of the history of the state – once again became a feature of Irish life. Since then there has been a recovery, and key to this is the availability of a well-educated workforce.
“We were fortunate in having quite a good number of factors working for us, education being one of the foremost. I think [that with] high grades, particularly at third level, we realise how beneficial it is. We can never go back to not being concerned about the latest information and guidance we can get from education.”
Despite recent economic problems, Dr Whitaker believes that Ireland has a bright economic future.
“I am hopeful for Ireland, but I worry sometimes. I don’t see that we’re making enough effort to be highly competitive over a wide range of products. But I don’t despair either. I don’t think we’ve found enough underpinning for the old-fashioned production of agriculture. But I am heartened by the greater interest in education and particularly education of an industrial kind.”
I am heartened by the greater interest in education and particularly education of an industrial kind
In changing that, what does he think the next step is for Ireland? “I do believe it is time to refresh and judge again; things don’t stand still. The outer world is changing all the time. I’m not sure we follow every phase of that; take the lessons that we learn.”
This year’s Business & Finance Awards sees the inaugural TK Whitaker Award for Outstanding Contribution to Public Life being accepted by President Michael D Higgins, in the year that marks TK Whitaker’s centenary.
He remains one of Ireland’s foremost ever public servants and was the youngest ever secretary general of the Department of Finance when he took over the role in 1956 at the age of 39.