Perhaps the single best decision made by Charlie McCreevy as Minister for Finance was the establishment in 2001 of the National Pension Reserve Fund (NPRF). In addition to proceeds from privatizing Eircom, 1% of GNP was to be channeled annually into an investment fund dedicated to financing public service pensions from 2025 onwards.
Not only was the NPRF a sensible exercise in counter-cyclical fiscal policy, – in marked contrast to the habitual “If I have it, I spend it.” approach – it was a hefty down-payment on the otherwise unfunded public service pension liability.
Unfortunately, the best laid economic plans didn’t survive contact with Ireland’s world-beating banking crisis, the final bill for which will likely come in between a third and half of current national income. Continue reading →
Well, it’s been a busy month… between graduating from Columbia, visiting Ireland, holidaying in Spain, moving to Indonesia, and starting work with the World Bank.
That largely explains my lack of blog activity of late, something I hope to rectify in the coming days and weeks.
Meanwhile, I’m settling into life in Jakarta, a sprawling, bustling, booming metropolis that epitomizes ‘up by the bootstraps’ development in emerging Asia. The fourth most populated country in the world, Indonesia has been Asia’s sleeping giant, but partly driven by a commodities boom, it is rapidly rising to take its place beside China and India.
At the World Bank, I am working on two projects: one on the impact of FDI in the services sector on economic productivity, and the other on trade logistics, notably issues relating to Jakarta’s port facilities. At a time when much of the developed world is mired in economic stagnation, it is fascinating to be exposed to economic policy issues in a rapidly rising emerging nation.