Ireland:
Testing Times...
How do we cope with recession? Valerie Shanley hears from leading experts and thinkers...
In with the old, out with the new. But if we started 2008 as slightly mangy Celtic Tigers, who are we now as we venture a toe into 2009?
The collapse in our economy has left an entire section of society feeling much poorer – especially those with big houses and share portfolios in Irish banks. Gone are the days when estate agents could tell you that the first thing new owners of a house should do on moving in was to rip out the designer kitchen the previous owners had only recently installed and replace it with another. Because gone are many of those estate agents.
If the masters of no universe are having to re-evaluate the way they look at themselves, what about the rest of us?
Even though most people were observers, as opposed to participants, in the ostentatious wealth of 'the boom', there was a positive, knock-on effect in confidence generally. Looking around, it was like that old Cranberries album title Everybody Else Is Doing It, So Why Can't We?. Everything, on some sort of scale, seemed possible.
But now, that weekend whim of a flight to somewhere unheard of but unexpectedly cultural and historic in Poland, a wardrobe bulging with clothes worn once or that classy glass-box kitchen extension are all very secondary to a population fearful of unemployment and bracing itself for tougher times.
*******
The evidence all around of caution
in spending shows just how the global scale of the financial crisis, and its effect on employment and economic activity, has impacted on the nation's psyche. Austin Hughes, hief economist with KBC Bank, compiles monthly consumer-sentiment reports which show the steep decline in confidence in just over two years.
"Fear is the dominant influence. Four out of five people polled believe the economy will worsen, and confidence is seen as the major negative. There is a 58% drop in consumer confidence since 2006. It's not necessarily because we've run out of money. People are spending a minimum 10% less with credit cards than a year ago, and generally, there has been an extraordinary scaling back on spending. The number of people who are expecting things to get worse shows consumers have already battened down the hatches and are braced for something potentially worse than what will happen. And that's probably not a bad thing. Provided we get the leadership to bring us out of it."
*******
Complaints from retailers here that shoppers who head north for groceries are being 'unpatriotic' fall on deaf ears in a newly pragmatic economic climate.
The move from ostentatious wealth to
no longer hiding the German discount-store carrier bag has been an emerging pattern in recent months as household budgets are squeezed. The upside, says
Dr Susan Whelan, a lecturer in economics at Waterford Institute of Technology, is that the drop in confidence has ushered in a new national sense of prudence.
"Consumers seem to be meeting their utilitarian needs, rather than the desire to display wealth. People are certainly being extremely cautious. On the broader scale, an obvious negative of the Celtic Tiger era is the impact on tourism. We have been perceived as a high-price destination, and that has had an effect on Ireland as a brand."
Despite the speed and scale of the economic downturn, many Irish businesses have already been preparing for tougher times. Property development, as everyone knows, has reached a standstill, and yet there is still the odd success story. London-based Irish developer Brendan Kirwan has a portfolio of luxury self-catering holiday accommodation, here and abroad, the most recent of which – The Gatsby – has opened in Ardara, Co Donegal.
"At first blush what I did in Donegal looks bold but looking closer you will see that I bought at pre-bubble prices and chose to develop this project in a way that it could join my existing boutique self-catering portfolio with virtually no expense. That means costs can be slashed and those savings passed on to guests who can now get their fix of luxe for less. The key to surviving this transition period is to get real and get on by acting nimbly on the conditions we actually have, not the ones people may wish they had.
"Ireland's problem is one of denial. The economic reality just seems to be too bitter a pill to swallow. The danger with denial is that it translates to people not making the right commercial or financial decisions."
*******
How can confidence be restored, in the nation as a whole, and in individuals fearful of predictions that things are going to get a whole lot worse? Psychologist Rosemary Troy suggests that the country could be looked on as a depressed individual suffering from an overwhelming feeling of catastrophe.
"They feel that everything in their lives has gone wrong. A suitable treatment is cognitive behaviour therapy (CBT). It takes the form of changing how a person thinks, and it could be applied to the country generally. Get people to look at the world in a different way. What would help a lot of people now would be to go back to a more relaxed way of life. Look at the way we perceive things, reassess that, not reinforce the negative. At night time, switch off the bad news for a while. We all need blocks of time to switch off. I would be an advocate of returning to Sundays where the shops are closed, to get back to a different kind of vibe.
"I'm just back from Tenerife, and I could feel the wave of negativity the minute I arrived back in Ireland. I feel we are quite negative as a people, especially compared to other nations who may be even worse off economically. Of course, they don't have our terrible climate. But we have bought into a certain materialism and our value system is a bit skewed. It's time to get a degree of balance. We overdo the need to shop, over-emphasise the need to acquire things. It's not all about acquiring wealth, or shopping, or jobs. Even during the boom we heard stories about people struggling with debt. We are now obsessed with hearing the news, and it makes people see a problem in everything. We have developed a way of seeing the world as quite negative.
"We take things quite personally; if something bad happens, we feel it personally. I would challenge those negative paths of thinking. An awful lot of it is perception. We have enormous debt, a lousy climate, but we have good things too. It's okay to want to earn money and okay to want to provide for our families, but those material things are not the only important things in life. There's a need to move away from defining ourselves in terms of wealth.
"I had two teenage patients last year who agreed that their parents could be involved in the consultation. On two occasions, the parents concerned said they didn't have the time. That's the wreckage of the boom, the feeling that earning money is all that matters, rather than children's welfare."
Writer Joe O'Connor agrees that the excesses of the past decade were experienced pretty much selectively.
"I never knew anyone who had a three-grand handbag. Certainly, most people did better than they had done in the 1980s, but here was an incredible lack of willingness to end the divisive inequalities that have always existed in Ireland. We're going to have to get used to things we previously took for granted now becoming luxuries. But so what? That isn't going to kill anyone. I don't blame the politicians for being shocked. But over Christmas, they'd really want to get in gear and come back with leadership, and hope.
"All the flailing around and passivity has to stop. If there's one thing worse than a country where there was too much money swilling around, it's a country where there's suddenly none."
Mark O'Halloran is the award-winning writer of 'Prosperity', the 2007 RTé drama series which prompted a lot of soul searching at the height of the boom for its searing portrayal of the lives of four characters on the margins of society. He agrees that most people are now dealing with much more uncertainty in their lives.
"People are genuinely afraid of what the next few years have in store for them. It feels like everything that we have been told over the last few years – such as we've never had it so good, growth will keep coming, business knows best, etc – has all been just fanciful nonsense pedalled to us by people who really had no idea what they were doing.
"I think that people are beginning to reflect also on who we were in the good times – beginning to see the flashy trashy idiots we became with a few extra euro attached.
"But it's not good to be all doom and gloom. I think that this recession does hold out great opportunities for us. We will certainly all have more time to reflect on who we are and what we want but perhaps more importantly we may all have more time for each other, more time to appreciate the really important things in life – friendships, lovers, family, etc. And that can't be a bad thing."
Report by Valerie Shanley - Sunday Tribune.
Testing Times...
How do we cope with recession? Valerie Shanley hears from leading experts and thinkers...
In with the old, out with the new. But if we started 2008 as slightly mangy Celtic Tigers, who are we now as we venture a toe into 2009?
The collapse in our economy has left an entire section of society feeling much poorer – especially those with big houses and share portfolios in Irish banks. Gone are the days when estate agents could tell you that the first thing new owners of a house should do on moving in was to rip out the designer kitchen the previous owners had only recently installed and replace it with another. Because gone are many of those estate agents.
If the masters of no universe are having to re-evaluate the way they look at themselves, what about the rest of us?
Even though most people were observers, as opposed to participants, in the ostentatious wealth of 'the boom', there was a positive, knock-on effect in confidence generally. Looking around, it was like that old Cranberries album title Everybody Else Is Doing It, So Why Can't We?. Everything, on some sort of scale, seemed possible.
But now, that weekend whim of a flight to somewhere unheard of but unexpectedly cultural and historic in Poland, a wardrobe bulging with clothes worn once or that classy glass-box kitchen extension are all very secondary to a population fearful of unemployment and bracing itself for tougher times.
*******
The evidence all around of caution
in spending shows just how the global scale of the financial crisis, and its effect on employment and economic activity, has impacted on the nation's psyche. Austin Hughes, hief economist with KBC Bank, compiles monthly consumer-sentiment reports which show the steep decline in confidence in just over two years.
"Fear is the dominant influence. Four out of five people polled believe the economy will worsen, and confidence is seen as the major negative. There is a 58% drop in consumer confidence since 2006. It's not necessarily because we've run out of money. People are spending a minimum 10% less with credit cards than a year ago, and generally, there has been an extraordinary scaling back on spending. The number of people who are expecting things to get worse shows consumers have already battened down the hatches and are braced for something potentially worse than what will happen. And that's probably not a bad thing. Provided we get the leadership to bring us out of it."
*******
Complaints from retailers here that shoppers who head north for groceries are being 'unpatriotic' fall on deaf ears in a newly pragmatic economic climate.
The move from ostentatious wealth to
no longer hiding the German discount-store carrier bag has been an emerging pattern in recent months as household budgets are squeezed. The upside, says
Dr Susan Whelan, a lecturer in economics at Waterford Institute of Technology, is that the drop in confidence has ushered in a new national sense of prudence.
"Consumers seem to be meeting their utilitarian needs, rather than the desire to display wealth. People are certainly being extremely cautious. On the broader scale, an obvious negative of the Celtic Tiger era is the impact on tourism. We have been perceived as a high-price destination, and that has had an effect on Ireland as a brand."
Despite the speed and scale of the economic downturn, many Irish businesses have already been preparing for tougher times. Property development, as everyone knows, has reached a standstill, and yet there is still the odd success story. London-based Irish developer Brendan Kirwan has a portfolio of luxury self-catering holiday accommodation, here and abroad, the most recent of which – The Gatsby – has opened in Ardara, Co Donegal.
"At first blush what I did in Donegal looks bold but looking closer you will see that I bought at pre-bubble prices and chose to develop this project in a way that it could join my existing boutique self-catering portfolio with virtually no expense. That means costs can be slashed and those savings passed on to guests who can now get their fix of luxe for less. The key to surviving this transition period is to get real and get on by acting nimbly on the conditions we actually have, not the ones people may wish they had.
"Ireland's problem is one of denial. The economic reality just seems to be too bitter a pill to swallow. The danger with denial is that it translates to people not making the right commercial or financial decisions."
*******
How can confidence be restored, in the nation as a whole, and in individuals fearful of predictions that things are going to get a whole lot worse? Psychologist Rosemary Troy suggests that the country could be looked on as a depressed individual suffering from an overwhelming feeling of catastrophe.
"They feel that everything in their lives has gone wrong. A suitable treatment is cognitive behaviour therapy (CBT). It takes the form of changing how a person thinks, and it could be applied to the country generally. Get people to look at the world in a different way. What would help a lot of people now would be to go back to a more relaxed way of life. Look at the way we perceive things, reassess that, not reinforce the negative. At night time, switch off the bad news for a while. We all need blocks of time to switch off. I would be an advocate of returning to Sundays where the shops are closed, to get back to a different kind of vibe.
"I'm just back from Tenerife, and I could feel the wave of negativity the minute I arrived back in Ireland. I feel we are quite negative as a people, especially compared to other nations who may be even worse off economically. Of course, they don't have our terrible climate. But we have bought into a certain materialism and our value system is a bit skewed. It's time to get a degree of balance. We overdo the need to shop, over-emphasise the need to acquire things. It's not all about acquiring wealth, or shopping, or jobs. Even during the boom we heard stories about people struggling with debt. We are now obsessed with hearing the news, and it makes people see a problem in everything. We have developed a way of seeing the world as quite negative.
"We take things quite personally; if something bad happens, we feel it personally. I would challenge those negative paths of thinking. An awful lot of it is perception. We have enormous debt, a lousy climate, but we have good things too. It's okay to want to earn money and okay to want to provide for our families, but those material things are not the only important things in life. There's a need to move away from defining ourselves in terms of wealth.
"I had two teenage patients last year who agreed that their parents could be involved in the consultation. On two occasions, the parents concerned said they didn't have the time. That's the wreckage of the boom, the feeling that earning money is all that matters, rather than children's welfare."
Writer Joe O'Connor agrees that the excesses of the past decade were experienced pretty much selectively.
"I never knew anyone who had a three-grand handbag. Certainly, most people did better than they had done in the 1980s, but here was an incredible lack of willingness to end the divisive inequalities that have always existed in Ireland. We're going to have to get used to things we previously took for granted now becoming luxuries. But so what? That isn't going to kill anyone. I don't blame the politicians for being shocked. But over Christmas, they'd really want to get in gear and come back with leadership, and hope.
"All the flailing around and passivity has to stop. If there's one thing worse than a country where there was too much money swilling around, it's a country where there's suddenly none."
Mark O'Halloran is the award-winning writer of 'Prosperity', the 2007 RTé drama series which prompted a lot of soul searching at the height of the boom for its searing portrayal of the lives of four characters on the margins of society. He agrees that most people are now dealing with much more uncertainty in their lives.
"People are genuinely afraid of what the next few years have in store for them. It feels like everything that we have been told over the last few years – such as we've never had it so good, growth will keep coming, business knows best, etc – has all been just fanciful nonsense pedalled to us by people who really had no idea what they were doing.
"I think that people are beginning to reflect also on who we were in the good times – beginning to see the flashy trashy idiots we became with a few extra euro attached.
"But it's not good to be all doom and gloom. I think that this recession does hold out great opportunities for us. We will certainly all have more time to reflect on who we are and what we want but perhaps more importantly we may all have more time for each other, more time to appreciate the really important things in life – friendships, lovers, family, etc. And that can't be a bad thing."
Report by Valerie Shanley - Sunday Tribune.