Case Study One: The First Programme for Economic Expansion

Transcription

1 Case Study One: The First Programme for Economic Expansion Key Questions: 1. What were the major developments leading to the FPEE? 2. How was the FPEE received and what steps were taken to implement it? 3. How did the FPEE affect Irish Society in the first half of the 1960s?

2 New Thinking In the late 1950s, the older generation of the FF leadership e.g. devalera began to retire. New thinking was in the air as young members of the Civil Service were now exchanging ideas and seeking a more professional approach to their jobs. This led to the Institute of Public Administration being set up to discuss how the government of the country could be improved. T.K. Whitaker became the Secretary of the Department of Finance in 1956 and was the main person behind the Programme for Economic Expansion. Whitaker presented James Ryan, the new Minister for Finance, with a note on Ryan s first day stating that they must move away from Protectionism and accept Free Trade, or else rejoin Britain. These developments also showed a desire to open Ireland to the wider world and Sweetman and Whitaker pushed and represented Ireland in their application to the International Monetary Fund (IMF) and the World Bank in Whitaker invited people from these organisations to Ireland to access the needs of the Irish Economy and in 1958, they urged the reduction of protectionism to increase competition and modernisation.

3 Change in Fianna Fail In 1957, the second Coalition collapsed and in the proceeding election, de Valera and Fianna Fail gained an overall majority with de Valera becoming Based on reading P , outline major Taoiseach once again. changes within the Fianna Fail party/leadership De Valera was 74 and going blind, so he retired in 1959 and Sean Lemass another 1916 veteran took over as Taoiseach. Lemass, a young Volunteer in 1916 acted as a useful bridge to the next generation in the party.

4 A Changing World: the Swinging 60s What was happening to the world in the 1960s? How were attitudes changing? What major developments were taking place? How did this change how people thought?

5 What were the major problems of the economy? Facing the Problems of the economy Whitaker, with the backing of Lemass and Ryan in 1957 began working on a new economic policy. Central to this policy was a move from government spending money on socially desirable items (housing, hospitals etc.) which didn t earn money, to productive items such as factories and tourism which did earn money. He consulted civil servants and officials from other departments along with sending drafts to IMF, World Bank and economic academics. In May 1958, he produced a document called the Economic Development or sometimes referred to as the Grey Book. This would form the basis of the FPEE. Lemass and Ryan supported this as it aided their cause of moving away from a Protectionist economy.

6 Document Questions Complete Document Questions on P. 407 NB. Answer based on exam criteria on handout

7 The Programme for Economic Development The programme was really a 5 year plan but couldn t be portrayed as such. It highlightedthe importance of agricultural exports to the country, but stressed farm output had to be improved through mechanisation and farmer education. More importantly in relation to industry, it stated that Ireland needed to move with the rest of the world away from protectionism and towards free trade. Thus meaning Irish factories would have to improve and become more productive and competitive which would be aided by Government grants. Finally it stated that government grants should be given to foreign companies to encourage them to set up in Ireland.

8 Homework Complete Document Qs on 408 and top of 409 For Next Week: What were the factors that lead to the pursuit of economic expansion from (1 and a half A4 pages/5-6 paragraphs)

9 Reactions to the Programme for Economic Expansion Opinion within the country was divided about replacing protection with free trade. Many industrialists were fearful they might not survive in a competitive environment. In the Dail many TD s both Fianna Fail and opposition supported the new approach. There were some doubters within Fianna Fail, probably including devalera as the clung to the idea of self sufficiency. Other feared losing votes of those displaced workers. Some opposition Td s mainly from Labour feared for job loses amongst their supporters. Probably due to this opposition, Lemass decided not to have the programme dev=bated in the Dail.

10 Implementing a change in the direction of the economy Internal Actions Institutional Reform Developing International Markets In your groups, based on P.410 to the end of sub heading Developing International Markets, outline the key events/actions that were used to try and implement the new economic programme.

11 Implementing a change in the direction of the economy Grants and tax relief was given to get foreign firms to set up in Ireland. To pacify local manufacturers who feared competition, these concessions depended on a promise to export everything produced by these foreign company's. An example of this was the duty free zone at Shannon Airport that begun in 1958, where foreign firms were encouraged to set up there and would be allowed to import raw materials without paying tax. They would also be allowed export their products tax free. This policy was later expanded throughout Ireland, with initially most British company's setting up, but later companies from America, Japan and Germany set up. The Control of Manufacturers Acts was another issue that had to be dealth with as it stated that all industries in Ireland must be Irish owned. In 1958, Lemass amended this to remove the requirement for firms that were going to export their produce. However it was not until 1964 that the Acts were finally repealed.

12 Institutional Reform The Control of Manufacturers Acts was another issue that had to be dealth with as it stated that all industries in Ireland must be Irish owned. In 1958, Lemass amended this to remove the requirement for firms that were going to export their produce. However it was not until 1964 that the Acts were finally repealed. Within the Department of Finance, Whitaker set up an Economic Development Branch to monitor progress of the Programme. The heads of the Departments of Finance, Aggriculture, Lands and Industry and Commerce began to meet regularly to discuss common issues. Whiteker also knew he needed to develop the research side to improve the programmes, so in 1961 he persuaded American Ford to give a grant to establish the Economic Research Institute (ERSI).

13 Ireland and the EEC On 1 Jan. 1958, the European Economic Community (EEC) came was created. It was a customs union of 6 countries which agreed to integrate their economies behind a common tarrif barrier, permit free movement of capital and labour among themselves. Britain joined a separate and much looser European Free Trade Area (EFTA) which did not have an external tariff and allowed members to make separate trade agreements with other countries. By 1961, the EEC was doing much better, Britain joined. Ireland and Denmark also applied to join. For this application to be successful, the Government set up the Committee of Industrial Organisation (CIO) to examine the various sections of Irish Industries. Their results highlighted Ireland lack of productivity and to remedy this, the government responded by giving grants to improve performance. Lemass though realised that only the stimulus of competition would force real improvement so it cut tarrifs by 10%, with more cuts to follow.

14 Other Trade Agreements In 1963, Charles de Gaulle the French PM blocked Britain from the EEC, thus postponing Ireland entry. However, in 1965, Whitaker was sent to negotiate the Anglo Irish Free Trade agreement with Britain. This gave Ireland Tariff Free access to the British economic market, while Ireland reduced it tarriffs on British imports by 10% each year until they disappeared. This aided economic relations between North and South culminating between the meeting of Lemass and O Neill.

15 Homework Document Q. Page 413/414 How was the FPEE received and what steps were taken to implement it?

16 Increased access top Education The modernisation of the economy required a modernisation of the education system. The government commisioned a report, Investment in Education in 1965 which argued educational expansion was essential for industrial development. Since 1957, Ministers for Education had organised grants to improve and expand school buildings. In 1963, a new type of school called a comprehnsive (later community)was introduced to provide second level education to towns and suburbs where there were no schools. In 1966, Minister for Education Donogh O Malley announced from 1969, all second level education would be free.

17 Social Impact of Economic Growth The economic growth produced a very rapid change in Irish society. Economic prosperity meant more jobs that reduced emigration which fell from 44,000 in 1960 to 12,000 in The new industrial jobs were situated in towns which meant young people still left the farms but only moved to nearby towns which resulted In the census of 1966 showing a modest growth population growth. Developers began building new housing estates to house the enw workers which lead to the creation of new suburbs. The new prosperity meant that people could spend money on improving tehir homes eg. Carpets, appliances and running water. Car ownership increased as the number of cars grew from 143,000 in 1958 to 330,000 in 1968.