January 23, 2014

'Soft Power' - From economic migrants to economic ambassadors.

Posted in Behavioural Economics · 79 comments ·
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Recently there has been lots of talk about who is buying Ireland. Foreign investors are buying Irish government debt and foreign funds are buying Irish prime property assets. Both of these developments are taken as barometers of how foreigners perceive this country.

I am more interested in “who is buying into Ireland” rather than who is buying Ireland. Who is buying into Ireland can be measured by immigration; who is coming here, from where and how has this changed over the past few years.

The figures for immigration are staggering. Fifteen years ago there were precious few immigrants here. Today, one-sixth of the population is foreign born. This is a massive social transformation by any measure. My preferred measure of immigration is air traffic and in particular, the Ryanair route planner. These days, people immigrate here by text. It’s not a big deal really. Someone gets a text in Poland about a job or a gig and a few days later they are in a housing estate in Dublin, Waterford, Cork or Limerick bedding down, three to a room, about to start a new adventure.

They come and go regularly. A Polish girl who works with me has just headed home for a long weekend. She’ll be back on Sunday night, yet she is an immigrant who may or may not settle here.

Unfortunately, there isn’t too much hard data out there about who has come from where; I took the latest CSO numbers on immigrants and plotted it.

 

CHART 1. NEW ARRIVALS

Non Irish thousands

 

As you can see from the chart – and this may come as a surprise – the biggest group of immigrants in Ireland are Americans. These may well be Asians – mainly tech workers – joining American technology companies but it is more likely that these are two massive areas on the move and a tiny fraction end up here.

The next up are the Poles and then the British, who have always been a sizeable immigrant population. Then we have decent numbers of Germans and French people here.

However, the next chart is more interesting as it shows how the immigrant population has changed over the past few years. The most striking aspect of the change in population is what could be called the ‘Flight of the Slavs’.

CHART 2: FLIGHT OF THE SLAVS

Migration country of irish

The Slavic population here has slumped from its boomtime peaks of 45,000 immigrants who arrived here from the new EU countries in 2008. This figure has dropped dramatically and it underscores the fact that lots of immigrants have no intention of staying here. The Eastern Europeans come for jobs and when they dry up, they leave.

This suggests that the Irish labour market for East Europeans behaved like a prosperous region of the US. When a place like Massachusetts booms, migrants from all over the US flock there for opportunity. When the economy turns down, the immigrants switch off, pack their bags and head elsewhere. Their behaviour is totally different to rich EU immigrants. While fewer rich Europeans are coming here, they don’t evaporate at the sign of a downturn. They display more normal patterns.

The reason for this is that they are not working-class immigrants. They are much more likely to be working in professional jobs in large foreign- owned companies, which are much less sensitive to the collapse of the domestic demand. In contrast, the Slavs worked in the domestic economy and when it collapsed they were on the first Ryanair flight out of here.

African immigrants are not going home when the economy turns down, and this is probably because the quality of life for their children and the opportunities they believe that children will have here are better than the countries they came from.

Looking ahead, we have to ask ourselves what will Ireland do with its immigrants. By that I don’t mean what will we do with the problem, but what will we do with the opportunity?

Almost every region outside Europe where the immigrants are coming from will be growing much faster than Ireland in the years ahead.

Ireland and Irish companies need only a tiny slice of the action in these countries to make a huge difference to income here. However, as anyone who has ever exported anything will know, it is difficult to get people who don’t know you to buy something from you. We all do business with people we know.

Wouldn’t it be an interesting notion to appoint ambassadors for Ireland among these Chinese, Indian and African immigrants?

Our State spends a fortune on the likes of trade missions, Enterprise Ireland offices and expensive political trips to curry favour in elite circles in faraway places for Irish companies. However, the best sales people for Ireland are right here under our noses. They are the immigrants.

These people could open doors, understand the culture, understand the mentality and do more in a few phone calls than official Irish agencies could do in a year of “glad handling”.

People make the difference and we have tens of thousands of people here who have aspirations that we could harness. Now if that isn’t an expression of soft power I don’t know what is.

DAVID MCWILLIAMS’S DAILY FINANCIAL UPDATE IS OUT NOW ON GLOBALMACRO360.COM

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  1. Lius

    Subscribe – FIRST

  2. michaelcoughlan

    Hi David,

    You posed a question at the start about people buying into Ireland as opposed to buying it. The graphs you posted show the poles have abandoned the place as a destination for work. The record levels of emigration to April 2013 supports this because half the people leaving had jobs.

    If we make ambassadors of people who are voting with their feet will we be expecting them to lie through their teeth? I can tell you the Portugeese Workers on the new M7 road and the Turkish workers on the Ennis bypass were disgracefully treated.

  3. Michael

    I know what you are saying. But try to see that there are opportunites for people in this reasonably emotive subject.

    All the best

    D

  4. Adelaide

    Last week I watched the BBC’ Economist’s rather bland “The Truth About Immigration”.
    Obvious Summary: Modest immigration is good both socially and economically for the native population, excessive immigration which all agreed the UK has is bad, except it’s not bad for business profits as they deflate lower-end wages and keep the general cost of living down.
    So here is your choice? Your country poorer without immigrants or your country richer with immigrants.

    • michaelcoughlan

      “So here is your choice? Your country poorer without immigrants or your country richer with immigrants”

      Not so. In a proper capitalist economy wages rise over time with prices in slight deflation as efficiencies rise. The driving down of wages depresses demand as McWilliams has pointed out “your earnings is my spend”.

      We need to regulate the level of immigration into Ireland at a sustainable level to allow lower end wages rise to take people off the dole. The extra increase in cost can be negated by the ratio between the higher earners and lower earners being reduced. The ratio in the states is now a staggering 400:1. I don’t believe in taxing rich people off the planet.

      The way to establish an economy where workers benefit from the capitalist process is to reward endeavour over speculation. The banks obviously want the status quo to continue and they resist initiatives like restoring glass stegal but we can trade between ourselves using the same techniques that governments do like bi-lateral trade which at the local level is simply barter. We can choose any method of payment for goods and services remember as many are doing with the unproven bitcoin system but there are other methods.

        • michaelcoughlan

          “When we invert”

          You’ll invert nothing. All you are is a windbag without backbone, character or even the courage to post in your own name.

          I have no intention of killing anyone by the way but just to illustrate how crazy you are you actually ascribed to my post the opinion that little ole me has somehow the power to kill “all of us”.

          Madder and madder you’re getting.

        • michaelcoughlan

          “You’re an “obdurate despot”,”grievous to suffer ,piteous to behold””

          No. I’m just not a brainwashed nutjob.

        • michaelcoughlan

          “You seeeeem to tink you’re the Police” Mr.Coughlan ( as Ben Gilroy said ) asking for names and date of birth too eh;)

          I’d say your curiosity factor is skyyyy high ..”who is Whatamess?”…”who is Bonbon?”….”who is Adelaide?”

          Yet again projecting YOUR madness onto me. Like I said before you don’t know what I think because your view of the world is so narrow, ignorent, arrogant and one dimensioned its impossible for you to view it from any OTHER perspective than that inserted into your mind by the cult that captured you.

  5. Paul Divers

    A1. Cuts through the bs like a knife.

  6. woodsey

    VERY l-o-n-g knife!

  7. Paul Divers

    Bono to speak at Davos as investors upbeat on economy

    BONO will attend a dinner with Taoiseach Enda Kenny and Finance Minister Michael Noonan in Davos tomorrow night.

    http://www.independent.ie/business/world/bono-to-speak-at-davos-as-investors-upbeat-on-economy-29938171.html

    • cooldude

      Everyone gloating about how fantastic the “recovery” is and how well the stock market is doing. Are’nt these the same bunch of clowns who said the very same stuff in 2007. Printing currency cannot bring economic progress especially when it is used to prop up zombie banks and monetize debt. Things will go pear shaped again soon and these clowns won’t have a clue why it happened. Bone is turning into a right twit.

      • Ryu Hayabusa

        In Days of Thunder Michael Rooker’s character said of Tom Cruise’s Trickle
        “Boy don’t have the b***s to pass me on the outside!”

        Do we ,Muintir na hÉireann have the CAJONES to pass the defective, runaway out of control FG Nascar on the outside berm!?

  8. Paul Divers

    Davos: From North Korea to Iran, investors spy the new frontier

    “North Korea’s little-known economy also boasts rich mineral resources such as iron ore and largely untapped rare earth metals.”

    http://www.independent.ie/business/world/davos-from-north-korea-to-iran-investors-spy-the-new-frontier-29944184.html

  9. Immigrants /Emigrants Just the tool to destroy the cohesive nation state. Loyalty will mean nothing as people are cut adrift with no roots to gather sustenance. No roots= no plant, no growth, no flowers, no fruit.

    People wondering why they are wandering. Flotsam floating around the world. Part of the master plan of destruction followed by a unity called One World government, or the New World Order.

    In the meantime the high taxes and insufferable debt make most places hard to consider as a refuge for life and civil living. Families and community broken apart.

    Time to raise the drawbridge. Get your own national debt free currency and look after your own not everyone else. The international banksters have us all by the short and curlies.

    • michaelcoughlan

      “Hamilton defeated the British Empire”

      Really? Are you sure it wasn’t thousands of dead patriots who acting individually but coordinated as a group into an army that did it?

      More of your top down nonsense. Change rises from the grass roots. Save us the verbiage in response.

      Hamilton coined gold and silver.

    • paddythepig

      Tony, even with a new currency, the Irish would borrow like drunken fools, drive the bus over the cliff again, not put in the work to build a real exporting commercial economy, and the damn money would be worthless. The currency is not the issue, rather it’s the reckless lack of realism of the Irish people.

  10. 51st State of America

    http://www.youtube.com/watch?v=QUefzNi_pX4

    Look out of your windows, watch the skies
    Read all the instructions with bright blue eyes
    Were W.A.S.P.s, proud American sons
    We know how to clean our teeth and how to strip down a gun
    We’re the 51st state of America

    Our star-spangled Union Jack flutters so proud
    Over the dancing heads of the merry patriotic crowd
    Tip your hat to the Yankee conqueror
    We’ve got no reds under the bed with guns under our pillows
    We’re the 51st state of America

    Here in the land of opportunity
    Watch US revel in our liberty
    You can say what you like
    But it doesn’t change anything
    ‘Cos the corridors of power
    Are an ocean away
    We’re the 51st state of America

    • Only know the name Paul, not the man or music.

    • New Model Army actually got banned from entering the USA to tour in the 1980s due to that song, haha!

    • Haha he’d make a bollox of it.

      New Model Army are a fine band.

      http://www.youtube.com/watch?v=Va2f78H2voE

      She stares at the screen, at the little words of green
      Tries to remember what to do next
      There’s a trace of frustration that crosses her face
      Searching through the keys she should press

      But I would help her if I only know how
      But these things are a mystery to me too
      And it seems to the corporate eyes they are watching
      She fears for her job and the moments they are passing
      I stare at her name tag and I think to myself
      Both you and I, we never asked for any of this

      Let’s take a walk up past the chemical works
      Where the sky turns green at night
      We’ll talk about not getting away from here
      Some different kind of life

      But even in the freshest mountain air
      Oh, the jet fighters practice overhead
      And they’re drilling these hills for uranium deposits
      And they’ll bury the waste for our children to inherit
      Though this is all done for our own benefit
      I swear we never asked for any of this

      Well, this golden age of communication
      Means everyone just talks at the same time
      And liberty just means the freedom to exploit
      Any weakness that you can find

      Turn off the TV just for a while
      Let us whisper to each other instead
      And we’ll hope that the corporate ears do not listen
      Lest we find ourselves committing some kind of treason
      And filed in the tapes without rhyme, without reason
      While they tell us that it’s all for our own protection

      I swear we never asked for any of this
      Oh, I swear we never asked, not for any of this
      Oh, I swear we never asked for any of this
      Oh, I swear we never asked for any of this
      Oh, I swear

    • Father Bartholomew Foolemall

      I do enjoy your contributions. Check out TheThe, Heartland.

      http://www.youtube.com/watch?v=txrILqlaUlE

  11. cooldude

    China to start dumping US bonds. This might disrupt the happy happy mood in Davos

    http://www.zerohedge.com/news/2014-01-23/hacked-cnn-reports-china-dumps-all-us-bonds

    • Apparently that was a hoax cooldude. CNN’s site got hacked.

      • Good hoax though, be great if it started a panic sell on Wall Street.

        • cooldude

          You’re right. Only a matter of time before it’s for real though.

        • michaelcoughlan

          What a fantastic post bonbon.

          Hoax defined is “a deliberately fabricated falsehood designed to masquerade as truth” which is in fact what your post is.

          I now know why mcwillims tolerates your presence; the more you post the more you damage yourself.

        • whatamess

          @Cooldude

          Good article,thanks

          A bit rigid tho’ as i’m sure you’ll agree…it’s a bit of a menu ,a template of solutions,but we can arrive at a recipe of our own,right? Step outside the flawed system ,back to drawing board and CREATIVELY make a plan,for the common good…

          We need to roll up the mental sleeves and “dream of things that never were and ask,why not”

          Yes,increasing the money supply rapidly and then dedicating 90% of this ‘money’ to NON productive debt,and ‘likety -split’, i might add ,is a problem for sure, but it’s the physical economy that ought to be our focus,right?

          And all the while, the closed system ,with financial systems positioned at the top of the current pyramid,is naturally contributing to the demise of currencies too,even MORE so than all the printing!..a snow ball effect,rather a chain reaction!

          If we don’t make the current economic models open,invert the current pyramid (same as life’s natural evolution) and position Mega infrastructural projects that increase energy flux density and organisation ,that’ll filter down to humanity….. humanity will then have to cope,not with fear,but with hope for a very bright future,as this new system will naturally deliver huge growth rapidly …wouldn’t be a bad complaint ;)…debasing currencies wouldn’t be as big a deal then!(i too of course would want a sound money system that Treasury can take care of,dedicated to common good,not bonuses!)

          “we can never see past the choices,we don’t understand”, the Oracle told
          Neo ;)

        • michaelcoughlan

          Hi whatamess.

          Your post is fantastic too because it shows you up just like bonbon. I DIDN’T define gold as a hoax Bonbon did.

          What your post demonstrates is how you project your own brainwashed madness onto others. Keep posting, the more you post the more you damage yourself.

        • Paul Divers

          look like you won the point and Michael is now licking himself

    • michaelcoughlan

      From max Keiser’s website;

      Apparently the spratly islands in the south china sea are a repository for a large stash of gold belonging to china. The islands apparently are contested by the philipines and recently a philipino ship turned up with six us ships as escort but had to turn tail when blocked by a Chinese naval blockade. Part of the CNN hoax report said china closed the south china sea and threatened to dump us debt to put manners on the yanks.

      Don’t know if true but some securities I hold nosed dived last night.

      • michaelcoughlan

        If any of ye google yamashita’s gold ye’ll se that it’s the loot of the imperial japaneese army From ww2 some of which was allegedly found recently there.

        If the financial scumbags in America are resorting to wild goose chases for lost stolen loot David then things in the rogue state USA and the regieme there must be desperate.

  12. “Old definitions of what constitutes a nation need to widen as the world changes. The question of sovereignty and independence and its importance at the start of the last century needs to be re-examined. Sharing the same currency as 18 other, often larger, countries is one reason…. As Ireland continues to be talked about as an economy rather than as a society, and the Government aims to make us the Best Small Country in Which to do Business, the need to re-think this country as a nation grows more apparent.”

    http://www.irishtimes.com/blogs/generationemigration/2014/01/22/definitions-of-nation-need-to-widen-as-the-world-changes/

  13. It is always the invader who changes the demographics of the nation/state invaded. Half the world would still be in the stone age but for that!!
    Not saying I approve of invasions but that is what is happening to the western world right now. One of the “benefits ” of free trade :) :)

  14. michaelcoughlan

    hi David,

    After JP Morgan gets 14bn in fines last year the CEO Jamie Diamon gets a pay rise of course to bring his remuneration in 2013 up to $20m TWENTY MILLION DOLLARS.

    Like I have been saying all along: The more you fuck your customers the more regarded you are and the higher your pay. Max Keiser refers to them as psychopathic bankers. I’m inclined to agree with him.

    http://www.bbc.co.uk/news/business-25887905

  15. joe hack

    “Bono lays down challenge to world business leaders”

    I sure they listening to a busker – an invited “activist”? – a talisman!

  16. joe hack

    “Bono lays down challenge to world business leaders”
    I am not to sure they are listening to a busker – an invited “activist”? – a talisman

  17. Ryu Hayabusa

    Lol Shpongle… Gnarly.

    And when you’re chillaxin’ a bit of. . .

    http://www.youtube.com/watch?v=lj9FVlEtknU

    “Greenhouse effect with the seed connect,
    DEA can’t keep the Green Thumb in check”

    Big shout out to The ‘Ming’

  18. StephenKenny

    I thought it was called self-employment.

  19. Hugo Salinas Price on the foolishness of imaginary money, and a number of germaine observations on how our leaders and economists are leading us to the destruction of our civilization.

    http://inteligenciafinancieraglobal.blogspot.mx/2014/01/billionaire-hugo-salinas-price.html

  20. What goes around comes around.

    City broker shot in ‘hit’ outside Essex station.

    http://www.thetimes.co.uk/tto/news/uk/crime/article3985003.ece

  21. People are caling HSBC the ‘new Northern Rock’ on Twitter.

    We live in hope.

    http://www.bbc.co.uk/news/business-25861717

  22. Ryu Hayabusa

    Tsk Tsk… stultus puer! it appears apples have grown again quite quickly.

    100 lines for monday morning, must strive harder at my verbiage.

  23. Paul Divers

    Good stuff Joe.

    “Personal freedom is a fine ideal, but unrestrained rampant individualism can undermine the common good”

    It would take a strange person to argue with that.

  24. This article is for you Mr. bonbon:

    http://www.ft.com/cms/s/2/5929ed26-83bf-11e3-86c9-00144feab7de.html#axzz2rUoSFidD

    “As physical proximity loses importance, last century’s trend to urbanisation could reverse. In 100 years, people may be spread out more efficiently across the earth. They may marvel that greater Tokyo once had more inhabitants than Siberia.”

    This is the kind of change I was referring to in relation to cities the other day but then you knew that.

  25. michaelcoughlan

    “Churchill, the Hitler supporter who decided he did not want German speaking fascism”

    Oxymoron or what? LOL. Keep posting Bonbon the more you post the more you damage yourself.

  26. michaelcoughlan

    Keep posting bonbon the more you post the more you damage yourself.

  27. michaelcoughlan

    “We, the people,” LOL,

  28. joe hack

    Just as was reaching 40 I heard it said that life begins at 40 – so now the spoiler for all you might be 40 year olds – I can safely say that that it was a lie and that life just got harder at 40. It could be a timing thing and that I was just an unlucky one – inflation kicked in just as I was reaching 40. I was then told that 40 is the new 30, with this new information I was temporarily consoled, as this might mean that I get to be 40 at 50 and life will then begin at “40” (50) but with all the cut backs and such like even this is looking uncertain. I expect if I make it to a pension claim age I will be told that that 65 is now 68, is now 69, is now 70, is now 71, is now 72, is now 73, is now 74, is now 75, is now 76 … If I make to 100 and attempt to head to the Phoenix Park I expect I will be turned away and told that 100 is now the new 80 but by then we may have new republic 3rd, 4th, 5th, 6th…

    Fiat Money, fractional reserve banking: always a promise to pay, but it enslaves, puts into debt those that follow…

    The truth is there is no timetable and remember always try to leave your environment as you would like to find it, be a caretaker for those that come after you …

    Life begins and ends – enjoy all of it!

  29. Paul Divers

    Oligarchical hatred of humanity

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