The Irish economy’s remarkable recovery from the 2007-08 banking crisis is an envy of governments the world over. The country had the highest growth rate within the European Union last year at 4.8 percent, and is well-poised to keep up its performance this year.

Brendan Howlin, Irish Minister of Public Expenditure and Reform, visited Korea last week coinciding with the St. Patrick’s Day celebration, to strengthen partnership in government, business and education.

Among the things he did ― from engaging with Irish citizens to speaking at Korea University ― the minister expressed hope that the two governments combine their respective strengths in governance and administration, while people bond through culture. 


“St. Patrick’s Day is a focal point for our government to reach out to the Irish diaspora across the globe,” Howlin told The Korea Herald at the Irish Embassy in Seoul on March 19. “The holiday has also become a platform to present Ireland as a robust trading partner to governments and companies worldwide.”

Educational exchanges between Ireland and Korea remain robust, he said. Each year about 2,500 Koreans go to Ireland to learn English, and there are exchange programs and partnerships between Korea University and University College Dublin.

Active collaboration across universities, research centers and companies in Ireland gives students employment opportunities and increases their international employability, he added.

Howlin said that as a small island in Europe, Ireland has had to rely on the innovation and entrepreneurship of its people, much like Korea.

“The so-called ‘Celtic Tiger’ economic model of Ireland has changed dramatically since 2010, from dire straits to the fastest growing economy in Europe,” he said. The unemployment rate in Ireland dropped from 15 to 10 percent between 2011 and this year, and is expected to go down to 5 percent by 2018, according to the minister.

Howlin, who took office in March 2011, explained how his ministry branched off from the finance ministry with the aim of cutting spending and boosting efficiency.

“Ireland experienced a significant economic shock in 2010 as a consequence of the 2008 global financial crisis,” Howlin said. “As the shock reverberated around the world, the exposure had a profound impact on our financial system, which depended heavily on construction loans and property values.”

The financial turmoil led to the collapse of the government and a new coalition of the Fine Gael Party and Labor Party took over. After scrambling to find a way out of the crisis, the two parties agreed to implement major reforms across the public administration.

“We realized we needed a reform minister who can control expenditure,” Howlin said. “So our government split the finance ministry into the department of macroeconomic planning and taxation, and the department of public expenditure and reform.”

“In essence, we agreed to revamp our bureaucracy to rebuild people’s confidence in the capacity of the state, and serve their interests more effectively,” he added.

The minister underlined two major “waves of reforms” initiated by his government ― reducing expenditure and improving service.

“We trimmed down our public servants by 10 percent, and reduced pay and pension by 20 percent,” he said. “We also made people work longer by bringing in significant flexibilities, including shared services in payroll and procurement agencies.”

The second wave of reforms targeted improving the quality of public service through online delivery and increased transparency. Particularly on the e-government side, Howlin said the Irish government is “catching up” with Korea, widely regarded as the most advanced in the world.

The reforms were carried out without fierce opposition by the highly unionized civil servants, he said. “Like a good employer, I opened the book to the unions and explained to them exactly what the financial situation in Ireland was ― that we must cut down expenditure.”

Howlin pointed out, “Since public servants themselves depended on education, health, law enforcement and so on, they agreed to the reform plan after six months of negotiation and voting.”

The workers also accepted pay cuts, which was a “big request” to them, Howlin said. “It was quite amazing. Most people in Ireland and even in government were skeptical whether we could negotiate such an option, but we did in the end.”

Alongside these structural reforms, his government also undertook legislative reforms targeting accountability and performance of officials, freedom of information, register of lobbying and protection of whistleblowers.

Thanks to these efforts, trade and investment with Korea, which plunged during the crisis, have recovered to prerecession levels: bilateral trade is one-quarter of a billion euros a year and is balanced.

The minister said information communication technology, financial technology, finance, pharmaceutical, medical and nanotechnology sectors have potential for joint venture and research.

By Joel Lee (joel@heraldcorp.com)