High Hope in the South

The same fine mist fills the air, the same emerald pastures upholster the countryside and the same frothy brown Guinness flows freely in both Northern Ireland and the Irish Republic. But economic conditions in the two parts of that partitioned land are as dissimilar as shamrocks and shillelaghs.

In the North, traditionally more developed than the Republic, civil warfare has caused millions of dollars worth of property damage, and impeded production at some 60 factories. The Northern Ireland Ministry of Commerce has abandoned its international advertising campaign geared to attract new industry. In the South, however, the Republic is in the midst of the most prosperous period in its history. In the past decade, the gross national product has doubled to $4 billion, and exports have tripled. Emigration, which was draining Ireland of some of its best talent, is leveling off. Manufacturing--from small pottery plants to huge machinery-making factories--has surpassed agriculture as the country's chief foreign-exchange earner.

Under government development policies that include a 15-year tax holiday on export profits and non-repayable cash grants of up to half the cost of plant and equipment, some 500 new factories have gone up in Ireland. About 350 are foreign-owned, and the roster includes IBM, General Electric and Olin from the U.S., Plessey from Britain, Switzerland's Oerlikon, South Africa's De Beers, The Netherlands' Verolme United Shipyards and Germany's Liebherr. The Irish Industrial Development Authority, under Michael Killeen, 43, a former head of the Irish Export Board, will spend about $70 million this year to help attract and finance still more new industry and modernize existing plants.

Exaggerated Fears. That effort is a practical response to the fact that Ireland's economic growth has shown some signs of slowing down. Last year the number of tourists dropped 6% from 1969. Says Eamonn Keane, marketing director of the Irish Tourist Board: "The troubles in Northern Ireland have frightened a lot of people." They may also have discouraged some new investment in the Republic. In fact, the fears of tourists and investors are exaggerated: life in the South is still stable, and foreigners are still cosseted. Except for the North, Ireland is a much safer place to live and work than urban America is.

Rising prices are a greater problem for Ireland than rising ire in Belfast. Inflation hit 10% in 1970, and the rate is still around 8%. Struggling valiantly to keep inflation at bay, the government has expanded existing price controls to cover the service industries. Labor unions, fearful that wage controls would be imposed, reluctantly agreed to accept raises of no more than $5 a week until the end of this year, and then only increases of 4% plus cost of living rises in the first half of 1972. With sound management and reasonable luck, the government will avoid the dramas of last year, when strikes paralyzed Irish commercial banks for six months and closed the cement industry. C.M. Whitaker, head of the Central Bank and a leading economist, says: "The unions are now as keen as we are to lick inflation."

Wit's End. Helped by voluntary wage restraint, Prime Minister Jack Lynch hopes to pare inflation to 4% or 5% this year. Meanwhile, centuries after the Irish had concluded that their only natural resource was wit, commercially promising deposits of zinc and lead have been discovered in the western part of the country.

Irish butter, cheese and other farm commodities now sell in Britain at prices kept low by the Anglo-Irish Trade Agreement. But Ireland's entry into the Common Market, which could come in January 1973, should bring dividends for its quarter-million dairy farmers. Once Ireland is in. they will be able to sell more in continental Europe, where prices are higher. Irish dairy farmers' incomes could rise 50% and provide extra millions in tax revenues for the national treasury --money that Finance Minister George Colley plans to put into industrial development, housing and social welfare programs.

Keeping the Charm. In its rush to modernize and expand, the government knows it must take care to avoid urban and industrial blight. That task is made easier because Ireland is still underpopulated. Foreign businessmen and tourists who delight in the country's sylvan charm and uncrowded cities need not fear impending overdevelopment. A third of Ireland's electricity is still generated in peat-fired plants. On important roads, traffic hazards are more likely to be four-footed than four-wheeled. Travel-poster castles and cottages are in abundant supply, and a special government tax break for writers and artists has persuaded about 250 of them to move to Ireland. Lured by Ireland's tranquillity, friendliness and expanding economy, even some expatriates are now returning to the old sod. Says Brendan Cardiff, an executive with the Industrial Development Authority: "After living for years in Spain and Italy, I came home because now--at last--there is a real future here."

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