Belfast Telegraph

What's the real cost of rioting on Northern Ireland's economy?

Street violence is costing Belfast's retailers and hoteliers business as well as damaging Northern Ireland's chances of attracting inward investment, discovers Paul Gosling

Richard Haass will try over the next few weeks to break the parading and flags deadlock that has so badly damaged the image of Northern Ireland internationally.

The former US Special Envoy to Northern Ireland -- who is liaising closely with US Vice President Joe Biden -- has a tough job. But it is one that is vital not just in building a shared future for Northern Ireland, but also to ensure that the recent tentative steps towards economic recovery in Northern Ireland are maintained.

Northern Ireland secretary Theresa Villiers spelt it out bluntly in a recent speech: political disputes over flags and parades that spill out into street violence are bad for business. "It damages Northern Ireland as we seek to compete in the global race for investment and jobs," she said.

There are strong indications that much damage has already been inflicted. The numbers of people out shopping this August were down 1.5% on a year before -- a worse performance than the UK average. And there was a rise in visitors to out-of-town retail parks, at the expense of city centre shopping centres. This is despite the positive impact in Belfast of the World Police and Fire Games.

Retail analyst and University of Ulster business lecturer Donald McFetridge said the figures showed that as far as retail is concerned, "we appear to be the weakest region in the whole of the United Kingdom", suffering both from a slow economic recovery and the street disturbances.

"The volatile political situation in this region has no doubt had a negative impact on progress in the retail sector and, while this continues, progress will be difficult and will ultimately remain behind other geographic regions," he said.

Independent retailers have particularly felt the pressure, says Mr McFetridge -- an opinion confirmed by NIIRTA, the Northern Ireland Independent Retail Trades Association. Its chief executive Glyn Roberts said: "Retailers in Belfast have taken a significant hit and the same is true with the hospitality sector.

"There was an immediate disruption of trade, particularly in Belfast city centre, for the retail and hospitality sectors. But the longer term worry is that because of the ongoing problem on parades and flags and the disruption, there will be a perception among shoppers that Belfast is not safe to shop in. We are extremely worried about that and we are concerned that the city centre may be seen as a no-go area."

NIIRTA is making representations to Richard Haass on the economic damage of the political impasse, urging the parties to reach agreement. Mr Roberts explained: "We do need to get parades, protests and flags resolved if we are to get a shared future. Unless we do make better progress we are never going to reach our full economic potential. These pictures of protest are being seen right across the world, which damages inward investment."

One of the worst flashpoints of the summer was July 12 in Belfast, despite attempts to promote the parading as a family event, the 'Orangefest'.

A review of the day conducted for Belfast City Centre Management spelt out the negative commercial impact, with 81% of traders reporting a loss of business and 80% reporting low shopper numbers.

"The main problem is in altering the wider population's perception of the city centre on the 12th of July," concluded the report. "The tensions that surrounded the run up to the main parades this year did not help, indeed, one can argue that the protests and civil disorder has set back the Orangefest programme. Until this type of publicity is eradicated, the response of tourists is exceptionally pertinent as it highlights a non-biased view and it is, on the whole, negative.

"Reports from tourists and businesses alike stated that the return leg of the parades was accompanied by intoxicated spectators creating a dirty and repelling place, this is a key issue that needs to be addressed."

This 'brand damage' for Belfast is not just a problem for the retail and hospitality sectors, but also for investment. This is true despite a strong recent performance by Invest NI in attracting investors and the impact being talked down by the agency.

A spokeswoman for Invest NI said: "Invest NI has not been contacted by any potential investors with concerns following the summer disturbances. Invest NI has continued to work closely with existing and potential investors to minimise the impact of any negative perceptions and reassure investors that Northern Ireland remains a safe and competitive place to do business. No planned visits by potential investors have been cancelled and all recent scheduled visits have taken place without disruption."

Those close to the investment community are more open about investor concerns. One advisor, who asked not to be named, said there is clearly damage to the prospects of inward investment. "It's more about perception than reality," he said. US media outlets have frequently broadcast not only recent but also old video footage of Belfast rioting, so damaging the image of the city through what is being termed the 'CNN effect'. This has discouraged executives and their advisors from even visiting Northern Ireland to discuss possible investment.

To win investment, a destination has to do more than offer the right financial and skills package -- it also needs to sell itself as a desirable place to live. "Investors need managers to come over for two or three years, bringing their wives, families, children," said the advisor. "The wives are extremely influential, particularly if they are bringing over young children. When they are here they are incredibly impressed by the education system and by the size of Belfast -- everything is so close. It's not just about winning over the CEOs." But at present, managers and their wives are reluctant to see what the city is really like.

A senior accountant -- who also asked not to be named -- reports a similar attitude. "I spend a reasonable amount of my week in London, speaking to people who might be potential new investors. They are incredibly sensitive to news coverage of Northern Ireland's internal disputes. And they are from Canada, or Korea and even the Middle East. It is world-wide distribution of bad press. We try to sell the Northern Ireland economy, saying that we have people to fill senior roles, yet we have people on the news [who are rioting] that you would not want to have working for you for love nor money.

"That makes life much more difficult for us.

It also makes it more difficult that this media background influences people's business decisions when comparing Northern Ireland with the Republic, or elsewhere. When it's a close run thing, it puts Northern Ireland into second place."

People of good-will obviously wish Richard Haass well for the good of Northern Ireland. Business leaders and their advisors also recognise that solving parading, flags and shared future issues are, in addition, fundamental to the creation of a healthy and viable economy.

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