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Economic risk assessment forum delivered a message whole island must listen to



Risk: it pays to be prepared

Risk: it pays to be prepared

Getty Images/iStockphoto

Risk: it pays to be prepared

A special seminar at offices of the Irish Government in Dublin last week focused on a strategic overview in 2017 of the key factors in a National Risk Assessment for Ireland.

It brought together an impressive group of senior managers, top level policy makers, business advisers, specialists in social and environment policies, as well as commentators in the media. It should be no surprise that the risks identified had immediate relevance both to trends in the Republic of Ireland and also, seamlessly, to Northern Ireland. 

Many risks cross political borders. This generated a debate that only too rarely takes place. In its competence and quality, it is reassuring that, in this land of saints and scholars, there is a capacity for risk analysis and proposals for risk reduction or avoidance that would stand tall in international fora.

Only too infrequently are there opportunities to stand back to consider what are the strategic risks that may have serious implications for how we live, how the risks may detract from how we live, and where these risks come from. An informed appreciation of risks is a critical baseline from which to identify the priorities for policy development and changes.

Senior decision makers realise they must avoid being trapped into actions based on immediate headline news. A considered evaluation of the longer-term perspectives helps to get sensible policy changes.

The identification of the major risks facing this island, unsurprisingly, contains no surprises. Nevertheless, simply to list the identified risks across the full spectrum of human activity sets a demanding agenda for our future management.

The set of economic risks was headed by the impact of Brexit on vulnerable sectors of the economy, whether north or south. Also included were the perceived vulnerabilities in the euro area related to monetary policy as well as changes in the international trading environment. These themes lead into concerns about loss of competitiveness, over-reliance on multinational corporations, unfavourable international tax changes and, say quietly, the EU purported competition decision on Irish tax rules. From those questions, logically, risk analysis pointed to the continuing vulnerability of the banking system.

Participants with Northern Ireland knowledge had no difficulty in the 'read across' to assess the local risks. If a comparison is possible, there seems to be a greater degree of concern about Brexit hurting the Irish economy than is found in Northern Ireland. The depreciation of sterling, relative to the euro and dollar, has already affected expectations on Irish exports. Less strongly, the potential Irish gains in the financial sector are seen as only a partial offset.

Longer term, the shared demographic and social trends, north and south, point to risks which will affect the size of the health and social care demands as well as, less expected, the way in which the demands on the social protection budget will increase and the reasons why this will create a search for methods to constrain 'welfare spending'. Issues raised for Northern Ireland by the efforts in GB to reform welfare structures are reflected in parallel budgetary developments in the Republic.

As the demographic and social changes take place, there is an emerging awareness that growing community tensions are likely as degrees of income inequality increase and as job prospects diverge more strongly between those with skills and qualifications and others who lose out as the labour market changes.

The Irish risk analysis ranges extensively from, top of the current list, uncertainty over the UK's relationship with the EU (with Ireland still an EU member) but goes on to specify environmental risks from climate change and technological risks from cyber disruption and major pandemics.

The scale of the known risks is formidable, as is the challenge to respond. On this island we have a common interest in the improved policy making that this demands.