By John Dorney
Brendan O’Regan is an under-recognised figure in twentieth-century Irish economic history. He helped to pioneer the strategy of attracting foreign industry, which remains the most important element in the Republic’s economic strategy today. At Shannon he founded a ‘free industrial zone’ beside the airport where companies could be free for a specified period from taxes and export duties. Arising from this was the creation, almost from nothing, of an industrial base in rural Clare and a new town, Shannon—all of them O’Regan’s creations. He also broke new ground in attracting tourism to the west of Ireland. His innovations ended up having an influence far beyond Ireland, most significantly being imitated in China, where they are credited with the creation of industrial zones such as the new city of Shenzhen, today home to some 25 million people and a driver of China’s economic modernisation since the 1980s.
Brendan O’Regan was born in 1917 in Sixmilebridge, Co. Clare, into a family very representative of the Catholic nationalist middle class, rising in rural Ireland since the land struggles of the nineteenth century. His grandfather, Patrick, amassed a substantial landholding, and his father, James, owned a pub and later expanded into the timber industry, supplying British forces during the First World War. From this he assembled the capital to also open a hotel in Ennis, the Old Ground. In a manner that was typical of their class and background, the O’Regans were heavily involved in Redmondite nationalist politics, being elected for the Irish Parliamentary Party (IPP) for Clare County Council, as well as sitting on the GAA county board.
James O’Regan seems to have sensed which way the wind was blowing and stood aside from politics during the revolutionary period that followed the creation of the First Dáil in 1919. When he was campaigning for the 1923 general election it was claimed that he had acted as an intelligence officer for the IRA in Clare during the War of Independence, but this seems dubious. After the establishment of the Irish Free State, the family’s politics stayed for a time with the National Party, a remnant of the old IPP, and later with Cumann na nGaedheal.
The combination of business and political connections was to be a key feature of Brendan O’Regan’s career, though he was never a party-political partisan. He studied hotel management in Dublin and also gained some work experience in 1930s Germany, with a view to taking over the family business in Ennis. His ‘big break’, however, was working at the Stephen’s Green Club in Dublin, where he met the most influential political figures in Ireland at that time. Among them was Seán Lemass, who in 1942, as minister for supplies, appointed the young O’Regan as head of catering at the airport at Foynes, where flying boats headed to and from the Americas, landing in the Shannon estuary. O’Regan recalled that he got the job without even an interview, an indication of Lemass’s high opinion of him. At that time all aeroplanes crossing the Atlantic had to refuel at Shannon before flying to Newfoundland, and O’Regan’s restaurant catered to many powerful figures, including US Secretary of State Dean Acheson. Among O’Regan’s innovations was the invention of ‘Irish coffee’, served with cream and whiskey.
In the wake of the Second World War, the airport relocated to a dry landing strip at Reannana and was renamed Shannon Airport, but with the advent of jet aeroplanes the stopover risked becoming redundant. The Irish government had to find new reasons for visitors to stop in Shannon and one of these was the first duty-free shop at an airport anywhere in the world in 1947, where items such as alcohol, cigarettes and jewellery were sold to travellers without the normal taxes and duties added to the price. O’Regan, though his background was in catering, was put in charge of this new venture and made it a great success.
This set O’Regan to thinking about how the principle could be applied to further development in the area. What he came up with was based on reports he had heard of an economic ‘free zone’ in Panama, where industrial goods were flown in by air, assembled near the airport and then exported tax-free to the rest of Latin America. Again, O’Regan’s political contacts allowed him to bypass other state bodies, including the Industrial Development Authority (IDA). Instead, again on the initiative of Seán Lemass, by now tánaiste, O’Regan was made head of a semi-state company, the Shannon Airport Development Association (SADA, later changed to the Shannon Free Airport Development Company, SFACCO). This was launched in 1957.
Enthusiasm for the scheme was not universal. T.K. Whitaker, secretary to the Department of Finance, a man often credited with opening up the Irish economy from the late 1950s onwards, was opposed; he favoured attracting investment to existing urban and industrial centres. Nor was the scheme immediately successful. Some early companies stayed for only a few years, including Japanese electronics giant Sony, but by the 1960s it had attracted durable plants for companies such as the diamond corporation de Beers and Standard Press Steel. Ultimately the zone created more than 10,000 new jobs and necessitated the creation of a whole new town, Shannon, again on O’Regan’s initiative.
O’Regan’s projects at Shannon were typical of state-led approaches to development. He remained throughout his career a semi-state employee, though in this position he frequently clashed with other sections of the state apparatus and sometimes with politicians who felt he was treading on their toes. He retired in 1977 but remained very active, including attempting to further peace and reconciliation in Northern Ireland by founding Cooperation North, as well as promoting economic growth in the Gaeltachts.
O’Regan’s contribution to the economic development of the west of Ireland is very important to that region, but perhaps the most important knock-on effect was its influence on the opening up of China to capitalism. In 1980 a Chinese delegation visited Shannon; it was led by Jiang Zemin, later General Secretary of the Chinese Communist Party, who is said to have declared: ‘This is the answer, we will build a hundred of these in China’. The Chinese noted that the Shannon scheme allowed a previously underdeveloped region to plug directly into ‘capitalism in its most vigorous form’. Indirectly Brendan O’Regan may have helped to shape the world we live in, to an extent not even fully apparent at the time of his death in 2008.
John Dorney is editor of ‘The Irish Story’ website.
A History Ireland Hedge School on ‘The life and times of Brendan O’Regan’ will be convened at 2pm on Saturday 13 April in the Shannon College of Hotel Management.