An Island-Wide Economy

The largest and closest untapped source of custom for the businessmen, shopkeepers and tradesmen of the greater Shankill area lies in the nearby Andersonstown, Falls Road and Ardoyne areas. With a different political/business environment, the commercial life of the Greater Shankill might expect to expand by anything from 20% to 50% if regular trading between all these areas was the norm.

A profitable impact of this nature would have a measurable and beneficial effect on an area that is currently struggling financially and socially. It goes without saying too, that any such positive development necessitates a mutual understanding. If the Shankill area is to enjoy these benefits, trade would have to flow in both directions and clearly the neighbouring districts would also experience an increase in prosperity also.

The reason why trading barriers exist between the Greater Shankill on one hand and Andersonstown and Ardoyne on the other needs no repeating for the readers of this magazine. Thirty years of civil war leaves an indelible mark that will not be easily overcome. Nevertheless, the basic rationale behind the above assessment remains incontrovertible. Any radical programme designed to improve the economy of post-troubles West Belfast would at least identify the opportunity existent in inter-community ‘free-trade’ and thereafter seek means of promoting it.

Under present circumstances, it may prove difficult to rush this process along. The respective communities may have to wait a little longer, allow memories to fade and to perhaps see the policy produce results elsewhere before they can be tempted to experiment with the idea in Belfast.

Such an example, however does not have to be found abroad. Everybody in Ireland would benefit from a determined effort to make the island a genuine single economy. Under current economic conditions many areas and towns north of the border are suffering a serious reduction in retail income as a result of the diverging values of the sterling pound and Irish pound and different VAT and excise rates. There has been a noticeable decline in the vibrancy of towns such as Enniskillen, Armagh and Newry over the past three to five years and this economic sluggishness has rippled over into the surrounding hinterlands.

Reduced retail income in the trading sector is paralleled by a poor record for output in the North's manufacturing sector. The cause of the flagging manufacturing output is not due solely to the troubles. In large part it is due to more generous rates of corporate taxation in the Republic coupled with the South's success in exporting to the European and US markets. Southern Ireland’s export led boom moreover is assisted by its participation in the Euro currency zone.

A recently published survey North and South: A statistical profile emanating from a piece of work undertaken jointly by the statistical offices in Belfast and Dublin indicates the extent of the disparity in manufacturing output north and south of the Border. In the early 1950's, the Northern Irish economy produced 40% of the Island's entire output. By 1997, this percentage had fallen to 25% and is believed to be still falling. The statistic illustrates the task faced by northern manufacturing.

In contrast to manufacturing output and retail trade figures, other statistics demonstrate that there is no enormous differences between the two areas. Education standards are similar in both parts of Ireland, both regions have a higher percentage of young people than other EU countries and that broadly speaking health standards and life expectancy are similar. In other words, there is no inherent reason why the Republic's economic performance should outstrip that of the North. On the contrary, the reasons are structural rather than due to any character defect in the Northern Irish personality.

To remedy the structural impediments to the northern Irish economy, it is important that several policies are pursued. First is the recognition that it is always easier to participate in economic success than create it from the bottom up. Any tutor of business studies can demonstrate that the surest way to succeed in business is to buy into an already flourishing one. By the same token, Northern Ireland can very quickly share in the Republic's prosperity - if the two economies are brought closer together that is.

All else being equal Northern producers will always find it easier to sell their commodities in the Republic than either GB or Europe. The reason is simple - the South is closer and therefore more accessible more convenient to monitor and ultimately, a surer market to capture. Moreover, the Republic is now relatively well off and with greater purchasing power than ever before.

However, in terms of a manufacturing base, the North holds many attractions for already established I.T. companies in the Republic. Many of the factors that apply to retailing also apply to manufacturing. Any management will always find it more convenient to commute by rail or car, to come to terms with similar working cultures and to move material and stock within the same island. In short - most manufacturers would prefer to expand from Dublin to Belfast than from Dublin to Liverpool.

To achieve this happy outcome, it would be important that North and South would agree to a one-island economy. It would be vital that a common corporate taxation rate be agreed for North and South. It would be essential that the two areas share a common currency and that a major effort be made to upgrade road and rail communications, not just cross-border but across the island. It would also be very important that similar VAT and excise duties apply both sides of the border.

There are no great technical difficulties standing in the way of carrying out the measures advocated above. Enormous political difficulties exist though. Many in the North fear that such measures would undermine the Union. On the other hand, people in the South might view these measures as quite simply unnecessarily disruptive of their prosperity, involving in their opinion a sharing of wealth with the North.

In reply to the above it might be possible to say to unionists that France still exists after 50 years of free trade with Germany and to Southerners that a ‘beggar thy neighbour’ philosophy is one that beggars you too. Others might though, argue differently. In the long run we simply have to decide whether we are willing to pay the price for increased economic prosperity or not. That is one of the ever-present dilemmas of political economy.

However, by way of concluding, it might be worth recounting an observation once made by Henry Ford. He is reported to have told an acquaintance that he had never known of a good business built upon friendship. Alternatively, he said that he knew of several strong friendships built on sensible business relations.

We may not always view Henry Ford as a role model but surely there is a lesson some where in that for us all.