Economy of Ireland 1920s and 1930s Ireland PDF

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Comprehensive notes on Economy of Ireland 1920s and 1930s Ireland...

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1920’s & 1930’s Ireland 1920’s Ireland was effectively a new beginning for the state. We had just gained our independence from Britain and were in the process of forming a new government. Although we had developed an excellent communication, banking and services system we were still at the beginnings of our new found economic and political system. There are plenty of lessons to be learned from this period to prevent reoccurrence’s in the future. Most notably solely basing growth around one sector. Growth was focused primarily on agriculture but who could blame them. It employed 54% of the working population and contributed to 32% of GDP. While this approach may have been shortsighted exports were the main source of Irish income and they were all based on the agricultural sector. The Government’s policies were free trade, low taxes and low government expenditure which sought to increase GDP and promote exports. They continued their assault on the agricultural sector by expanding the Department of Agriculture. The Land Commission was created and provided 3.6million acres to annuity paying farmers. The ACC or Agricultural Credit Corporation supplied farmers with credit to expand their businesses. The Government even created some foreign direct investment to establish a sugar beet factory in Carlow. A very significant policy was to create parity between the Irish and British currencies. While this move did exempt Ireland from making any monetary policy changes it created a certainty and a predictability which made Ireland a stable economy if nothing else. Britain accounted for 97% of our exports and 76% of our imports. The 1930’s policies were coordinated by fianna Fáíl who came to power in 1932. They set out to create self –sufficiency and to default on land payments to Britain. They introduced tariffs on imports which allowed home grown products to develop. Ireland became too focused on agriculture and played it safe with a hesitancy to grow into different industries. It wasn’t until 1950’s that Ireland industrialised and this hampered the countries growth significantly. A massive economic event took place in March 1932, De Valera refused to pay Britain the annuities anymore. This resulted in a tax war which stifled Ireland’s industrial growth and damaged our exports. However the Anglo-Irish agreement ended the war and Ireland agreed to pay a lump sum of 10million pounds. This was a massive victory both politically and economically for Ireland. Some may argue that the drive for self-sufficiency was a mistake and it that it was a pride policy rather than an economic one. Of course there were many negatives including the soar in unemployment, the loss of our biggest exporter in Guinness but the 90million removed of our debt cannot be ignored as an event that has allowed us to develop...