Northern Ireland economy already weak before Brexit and Stormont collapse - leading economist
Northern Ireland’s economy was already weaker than it should have been regardless of the impact of Brexit and the collapse of Stormont, a major economic conference has heard.
The Northern Ireland Economic Conference, organised by Agenda NI magazine, is taking place in the Slieve Donard Hotel in Newcastle, Co Down.
Speakers including Dr Esmond Birnie, a senior economist at the Ulster University Business School.
Addressing the event this morning, Dr Birnie said the Northern Ireland economy had long been dogged by problems including a lack of competitiveness due to under-investment in the economy.
And it was wrong to attribute its problems to the lack of an Executive and Brexit, he said.
“Whilst not underestimating the importance of those two issues, that narrative underestimates the extent to which the NI economy had underlying problems long before 2016 or 2017: a competitiveness challenge has existed for decades, possibly for at least a century.
“Of critical importance, we don’t invest enough. Rates of investment per person in NI are about half those in Great Britain and one-third those in the Republic of Ireland.
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“When an economy invests so little its long run growth potential is seriously reduced.
“A low investment economy means a low productivity economy: during 1997-2016 levels of output per hour worked were 15-20% lower than the UK average.”
He said productivity here in Northern Ireland was around 60% below that of the US, France and Germany.
While the lack of a devolved government here was an “obvious culprit,” it was not the main issue as Northern Ireland’s economic problems pre-dated Janaury 2017.
And the province’s economic performance had long been lagging the rest of the UK, with growth lower than the national average even during a decade of devolution from 2007 on.
And he said restoring devolution would only have a positive impact on the economy if the right policies were adopted.
“I have sympathy for those who call for Stormont to be restored after 1000+ days of inactivity: the accountability of decision making should be increased.
“However, a renewed Executive will only improve economic performance if it adopts appropriate economic policies. The experience during 2007-17 would suggest some of the policies were neither appropriate nor helpful.”
The conference continues today, with contributions from others including main speaker, David G Blanchflower, a professor of economics and a former external member of the Bank of England’s monetary policy committee.
Belfast Telegraph Digital