'We've yet to see the full economic potential of the 1998 agreement'
Twenty years on from the signing of the Good Friday Agreement business experts examine the impact of the peace deal on NI's business sector and what issues remain
The Good Friday Agreement (GFA) was a welcome relief. It was potentially a moment after which the economy could rebuild, grow and match the better standards of other places in western Europe.
The political settlement generated expectations of stronger and more enduring economic progress on jobs, investment, and better social infrastructure.
But the opportunities and prospects awakened by the GFA have not been fully realised. In 2018, the economy and employment are in a better state than in 1998. However, there is little doubt that by comparative standards elsewhere, much better results could have been delivered.
There is no easy way to assess what might have been achieved in the 20 years since the GFA. The unrealised potential is the outcome of the complex interaction of the success in the delivery of Government programmes as well as the less explicit influence of political instability as they have been reflected in business development plans.
UK and Irish comparators suggest that average personal incomes might be about 6%-8% higher, employment could be 5% higher and net emigration several thousand lower. In parallel, a successful outcome from the GFA could have allowed a redirected public sector budget to be targeted on more ambitious social policies and infrastructure investment.
The most successful feature of the economy since 1998 has been the increase in the number of people in jobs. Many of the new jobs have emerged in low value added occupations. Ideally, the search should be for jobs with higher value added and generating higher personal incomes. An important aspect of the successful increase in employment has been the arrival of new employees mainly from other EU countries.
Looking ahead to the post-Brexit situation, the ability to retain and attract migrant workers from other parts of Europe will become an important constraint.
A key influence following the 1998 GFA has been the application of policies to attract Foreign Direct Investment (FDI). To the credit of Invest NI, it has delivered or assisted a helpful continuing annual flow of FDI but at a somewhat lower level and with fewer firms looking for highly-skilled employees than might have been sought.
The GFA created expectations of a new political and improved security environment in which business confidence could improve and incentivise investment and expansion. That expectation was, for some of the time, justified. At other times, including in 2017-18, it has faltered. The existing private sector businesses with investments in Northern Ireland have generally recorded improving profitability but with some exceptions. The loss of JTI Gallaher's and Michelin illustrates questions about inadequate competitiveness.
Policies to increase the attractiveness of FDI took centre stage in political debate. After unduly slow preparations, and Treasury and EU agreement, arrangements for the introduction of a Northern Ireland rate of corporation tax were nearly complete when the local Executive collapsed. Now, in the context of Brexit there is a doubt about whether the corporation tax changes are still a worthwhile objective.
In the years since the GFA, the Stormont Executive has had a degree of budgetary discretion. That has been used heavily to protect NI households from higher rates charges, compared to England, and to avoid household charges for water.
'All island' topics were given specific provisions in the GFA. The North-South bodies attracted political criticism but have functioned with easy organisational co-operation. Conspicuous activities have been seen in the development of tourism through agencies such as Tourism Ireland and Tourism NI.
Perhaps the most significant institutional cross-border arrangement, lying outside the GFA, has been to creation of the all-island Single Electricity Market. This electricity arrangement now needs to emerge as a continuing agreement post-Brexit.
In 2018-19 the continuing value of the GFA now awaits endorsement in the final Brexit deal. The value of the GFA still remains to be harnessed.