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Retrofitting reality onto the ‘All-Island Economy’TM

By St Etienne

This post from the Partial Reporter reminded me of a bit of fact finding dug up towards the end of last year, and provides a welcome distraction from the current media sideshow on matters less important:

– £2.68m: Total amount spent by InvestNI on all-island bodies & events in 2008
– £1.16m: Total amount spent by InvestNI on EU-wide trade missions & marketing in 2008
– $282m: GDP of Republic of Ireland
– $18.39trillion: GDP of the EU
Invest NI spend source: Freedom of Information Act Request

The Republic of Ireland presents us with a market of 4.4 million people. The EU single market means access to 440 million. Who would an economist spend more on attracting?

It is my belief that fundamentally the resources being spent on apparently forcing North – South trade (if it was such a good idea would it not have happened by now anyway?) are grossly outsized when compared with potential reward. Indeed the apparent friendly sentiment behind the co-operation would seem to be one-way traffic, in practice at least. This week a few related happenings went by in the Irish capitals…

… in a moment of strained patriotic censorship a Dublin ad network refused to allow a campaign on Dublin’s streets enticing people to shop in Belfast this Christmas. This presumably breaches EU open market standards and would make an interesting jumping off point for a campaigning unionist politician to highlight in a European domain. We can but dream.

… Brian Lenihan, the South’s finance minister (he of ‘Southerners who pay Her Maj’s taxes are unpatriotic‘ fame) found himself in Northern Ireland last November, joined by the thousands of teachers doing some Xmas shopping while they were meant to be on strike. He was speaking at Belfast’s Presidents Club, an organisation whose direction requires a blog post of its own unfortunately. Bizarrely, Lenihan was expounding the merits of this all-island economy, an irony not lost on the business participants who made it clear to him they had given up on tendering for contracts in the Republic due to an unwillingness there to buy services from Northern Irish companies.

Indeed the hyperbole surrounding this economic curiosity is noteworthy purely for its sources – public declarations of support tend to come from politicians, journalists and of course the self-interested quangos running this sub-industry. It’s been allowed free rein for a few years now with a noticeable absence of critical analysis. Going as far back as 2006, we can see an inter-governmental strategy taking hold that is preparing to make the same mistakes as the EU integration project – money being spent on research and reports that already assume an all-Island outcome. Observe an article from the Republic’s Sunday Business Post:

The Minister for Foreign Affairs, Dermot Ahern, revealed recently that all government departments have been told to incorporate the all-island dimension into their submissions for the next National Development Plan for the period between 2007 and 2013.

On top of this are arrangements for a single, island-wide renewable energy market and a joint economic audit by the two governments. The audit will focus on the detrimental impact the border has had on business on this island.
Paul Colgan, Sunday Business Post February 19th 2006

Note another aspect of this nascent political project that has not had the required standard of rigorous debate and investigation – the counterparty risk inherent in another EU country funding our strategic goals (whatever they may be). Last week seen the speculation (from the Deputy First Minister no less, presumably as a first step in warning rapid all-island supporters of a coming clampdown in unquestioned funding) that the Dublin government may be about to cut its contribution to the plethora of random north/south governmental bodies (which would be defined as publicly-funded pressure groups in a more functioning political system).

The fact is these taxpayer-funded pressure groups are simply out of touch with reality. Only two years ago one such body recommended the building of a £3.5 billion bridge between NI and Scotland so that people from Dublin could travel by train to Manchester or further south:

It struck me that the gains to be obtained from building a bridge which might cost a couple of billion across the North Channel between Scotland and Ireland would outweigh the cost
Andy Pollack, Centre for Cross Border Studies (CCBS), August 2007

The CCBS is funded by the EU and runs with the tagline ‘Generating real benefits through practical cross-border cooperation in Ireland’

Generally though as these things tend to be funded on a 50/50 basis within the British Isles, the budgetary crisis down south will surely mean the UK taxpayer can look forward to paying less bucks out on such ground-breaking issues of commonality as North-South car pooling and cross-border mathematics.

Nothing like a healthy dose of recession to shed the fat?

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Filed under: finances, power sharing

2 Responses

  1. LeBon (Fake Name) says:

    Well, an all-island economy is really not a bad idea if you believe in free trade. However, since both the UK and Eire are part of the EU, I don’t see why all this hullabuloo is even necessary. The single/common market is supposed to let shoppers (ie, the citizens of the [European] Union) buy what they want, where they want, and from whom they desire. I do realize that the term “all-island” is politically loaded and unionist may see this in terms of a North-South reunification or the North departing the UK.

    It would be nice if some of these politicians, quangos, pressure groups, etc. would get real and focus on issues that are really critical instead of stirring up controversy for the sake of it or because it is a slow news day.

  2. St Etienne says:

    Agree completely LeBon – my point was specifically the publicly-funded artificial constructs that have developed out of this misdirection of focus.

    EU (and for that matter, global) free trade is a noble goal. Bi-lateral government subsidy runs contrary to that goal.

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