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Brexit is an opportunity. Let’s use it

There is something deeply elemental about being woken up by streaks of forked lightning illuminating the darkness in electric blue followed almost immediately by booming claps of thunder as a violent Adriatic storm passes just over the roof.

The Romans understood the power of the elements and observed that, in mid-August, the searing heat and soaring temperatures of the previous weeks tended to clash with colder weather coming in from the north or west, leading to dramatic electric storms. They took this to be a sign from the gods that one season was over and another starting.

Emperor Augustus named the 15th of August Feriae Augusti or the festival of Augustus, falling in the middle of the most significant month in the year, which naturally took the Emperor’s name. Today all Italia still closes on August 15th or Ferragosto, the modern Italian version of the Latin name.

So began the Roman holidays of late August, where the Emperors lavished parties and feasts on citizens and farmers in recognition of their summer toils and the coming of the harvest. The Emperors never missed an opportunity to reinforce their munificence, and if the weather obliged, well, all the better.

Part of the psychology of the festival was to blow off steam after hard toil but also to prepare the masses for the huge task of the harvest which lay ahead. The partying sweetened the prospect of prospective hard labour. The Catholic Church learned from the Romans when it took the existing pagan holiday of Augustus and turned it into the Catholic holiday of the Assumption of Mary into Heaven, on August 15th.

Cyclical events

In politics, using reasonably regular events to bolster your own power or indeed using cyclical events as cover to implement something else is an age-old trick of those in control. And if there is a once-off, particularly violent storm, what better cover than to interpret this as a sign from God or the gods?

Now consider how modern-day politicians might use the economic cycle or one-off economic events as opportunities to implement policies that are necessary but difficult to achieve.

Right now the global economic cycle is turning downwards, not blatantly but gradually. There’s lots of political risk about, from Hong Kong to Argentina to the Gulf.

A global cyclical slowdown after 10 years of growth would take a bit of steam out of the present breakneck speed of Irish growth. Blowing froth off the top of a mini-boom should be welcomed. In addition, Brexit will be a shock which I happen to believe will be a constructive one for the Irish economy medium-term, but could deliver an opportunity to address the single most important issue in Ireland: housing.

The Government could use Brexit as an opportunity to fix Ireland’s accommodation problem.

At its core, Ireland’s accommodation conundrum is a land-use one. Land is a resource that can be used or hoarded. If we were to reward the using of land more intensively and efficiently, and penalise the hoarding of land, then we’d begin to fix the problem.

‘Use it or lose it’

We should tax heavily land banking and dereliction and put a “use it or lose it” timeframe of rezoning land. There would be enormous public support for this.

In addition, we need to build much more intensively in our urban centres. According to research carried out by the Dublin Chamber, one extra storey on a one-hectare site would provide around 20 additional residential units. What about 10 extra storeys, then?

In terms of population density, Dublin holds around 4,588 people per square kilometre. Contrast this with Paris with 20,000 or Barcelona with 16,000.

Anyone arguing that increased density will destroy Dublin and its streetscapes has clearly not taken a stroll through Paris, Barcelona, Copenhagen or Lyon. It is a bogus argument that only enriches existing landowners and punishes potential residents.

Urbanisation is the future in terms of public services, transport and lifestyle. Therefore, we have to completely rethink what Ireland might look like and how we live in the future.

Urban transport and cheaper accommodation are key; this means digging down and building up. The landscape will be dictated by the following three factors.

1 Natural population increase 
Ireland has, by far, the fastest natural population growth among western European countries.

2 Net migration
Net migration to Ireland has been positive since around 2016, with migrant households typically smaller and more likely to live in cities than their Irish peers.

3 Changing household size
Ireland has the largest average household size in western Europe (2.7 people per household), but this has been falling steadily over the past five decades. As both average Irish household sizes and urbanisation rates converge towards those of our continental peers, there will be more demand for smaller houses and for apartments – a considerable amount of downsizing from the existing stock of housing in the country.

Least urbanised

The number of Irish households rose by roughly 50 per cent from 1.1 million in 1996 to 1.7 million in 2016. Two-thirds of this growth over the past 20 years has been in one- to two-person households, which now occupy the majority.

Ireland remains one of the least urbanised countries in Europe. Most European countries saw the share of their population living in urban areas rise from roughly 60 per cent in the 1960s to about 80 per cent today; Ireland is just now rising above 60 per cent, up from a mere 46 per cent in the 1960s.

Brexit is a great opportunity for Ireland, as this column has argued consistently. Capital and talent will flow in here, as the UK loses its lustre for investors.

But we have to use this opportunity to change the country to make it a better place to live and work. That starts and finishes with intensive urban land use and proper public transport, under the ground and over.

Cars are the past. The majority of our children might never buy a car.

Let’s take a leaf out of the Emperor Augustus’s book and use the natural rhythm of the economic cycle and the one-off event of Brexit to signal a change in the way we work and orientate ourselves.

Brexit hands us the cover to deal with the land issue in the Republic once and for all, before the really elemental challenge of Northern Ireland comes into direct focus.

Brexit is an opportunity, let’s use it.

Brexit is an opportunity. Let’s use it

There is something deeply elemental about being woken up by streaks of forked lightning illuminating the darkness in electric blue followed almost immediately by booming claps of thunder as a violent Adriatic storm passes just over the roof.

The Romans understood the power of the elements and observed that, in mid-August, the searing heat and soaring temperatures of the previous weeks tended to clash with colder weather coming in from the north or west, leading to dramatic electric storms. They took this to be a sign from the gods that one season was over and another starting.

Emperor Augustus named the 15th of August Feriae Augusti or the festival of Augustus, falling in the middle of the most significant month in the year, which naturally took the Emperor’s name. Today all Italia still closes on August 15th or Ferragosto, the modern Italian version of the Latin name.

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The rules of economics have changed. Could someone tell central bankers?

This week, the column will focus on global economic policy and why central banks – still the most powerful economic institutions in the world – don’t understand how disruptive technology is changing the way our world works.

What if they are stuck in a late 20th-century mindset not sufficiently clued in to the impact of new technology and therefore, as the world worries about an impending recession, they are like old generals, fighting the last war not the new one?

This week saw a flurry of activity from the world’s central bankers. From the US to New Zealand, Thailand and India, interest rates were slashed to all-time lows. Why the hyperactivity now? What they are up to?

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Boris Johnson is like an incompetent kidnapper taking Ireland hostage

The Brexit saga has become a bizarre hostage situation: Boris Johnson is the kidnapper, the ransom is the backstop and Ireland is the hostage. Johnson is demanding the EU drop the backstop or he will shoot the hostage. We’ve been here before. Traditionally, the mantra has been: “We never negotiate with terrorists.” Let’s see what happens.

We all appreciate the notion that if we reward bad behaviour, a kidnapper will resort to intimidation again. The European Union has a choice to make. Ireland will survive this. It might well be convulsive but the economy is strong enough, just. And then what?

When you think about it, the “no-deal” option is only “no deal for now”. No deal is not a long-term option; ultimately, the United Kingdom will have to do a trade deal with the EU. The facts are pretty straightforward – 47 per cent of all UK exports go to the EU and, in turn, 52 per cent of all UK imports come from the EU. No matter how the hostage drama turns out, no matter what the political and economic fallout, the UK will be back at the table very soon. The more chaos at British ports, the shorter the self-imposed mercantile lockout.

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Brexit Britain: The more demented our neighbour looks, the saner Ireland appears

As Ireland is one of the most globalised economies in the world, we should pay more attention to global trends than we pay to local or regional ones. Granted, given what is happening in London, this week has been an epoch-changing one in terms of Anglo-Irish relations. No one can be reassured by the complexion of the UK cabinet and their collective delusion that only Ireland now stands between them and their great neo-Elizabethan swashbuckling Brexit adventure.

But Westminster is not the only story. Because of Ireland’s trade flows with the US and the EU, the outlook for the global economy is as important for us as the political machinations in Whitehall, even though it doesn’t seem so right now. In fact, as a trading nation which exports six times per head more per worker than the UK, Ireland is much more plugged into decisions taken all over the world than those unveiled in London.

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Chinese are boxing clever by muscling in on Africa

Remember the Rumble in the Jungle? The 1974 Muhammad Ali versus George Foreman fight in Zaire was one of the biggest upsets in sporting history. Ali was supposed to be knocked out by the younger, stronger world champion. Few fighters had gone more than four rounds with Foreman.

Ali gambled if he could last more than four maybe the brute force of Foreman would lead Foreman to tire himself out as he rained blows down on his opponent. But how could Ali survive the onslaught?

This is when he devised his now famous “rope-a-dope” strategy. Ali calculated that he might, just might, be able to absorb Foreman’s blows by lying on the ropes, allowing their elasticity to dissipate the enormous power in Foreman’s punches. He also suggested that Foreman wouldn’t be clever enough to realise what was going on until it was too late.

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Stop the recession talk. It’s not happening

Strange things happen to countries’ establishments after serious crashes. Before the 2008 crash, it was deemed patriotic to talk up the economy and paint Panglossian scenarios about the future.

Back then putting on the “green jersey” meant cheerleading the credit/housing boom and vilifying the doubters. The disposition of the establishment was cavalier; these insiders could see the runway and a “soft landing” was imminent.

Today, chastened by experience, the preferred position of Ireland’s insiders is one of caution, probity and rectitude, at least in the tone of public statements. Putting on the green jersey isn’t half as much craic anymore.

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If Boris Johnson is the answer, what is the question?

If Boris Johnson is the answer, what the hell is the question? Perplexed? Who isn’t? Not for the first time over the past few months, the revealed nature of England, a country we thought we knew, confounds us.

To understand the dynamics at the top of the British government, and to guess what might be the question to which Johnson is the answer, we have to dig a bit.

It is individuals – rather than institutions – who make the big decisions, and therefore personal testimony and first-hand experience of those individuals can be useful in teasing out that which has rendered logic and analysis redundant.

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The UK’s next prime minister could be its last

Great political parties can and do disappear. It is a fact of history. The Irish Home Rule Party disappeared in 1918. Around the same time the Liberal Party, the party of Gladstone, began to atrophy, and was ultimately eclipsed by the Labour Party.

In both cases, great events – the 1916 Rising and the first World War – changed politics forever in their respective countries. In the UK the Liberals were destroyed by the Labour Party, who reframed 20th-century politics as a battle between workers and capitalists.

These big events change the rules, and it looks like Brexit is one such event for the current crop of British parties.

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David has been writing for almost 20 years and there are plenty of articles covering some of the most turbulent times in the world economy.

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