A stagnant economy in need of visionaries



Belfast Harbour – once feeding one of the great industrial hubs of the world now serving a city which is not living up to its potential

The Financial Times has just been sold to the Japanese for £844 million. Who says newspapers are dead? The new owner is the Nikkei Corporation, little known on this side of the world, but a major media player in what we once quaintly called the Far East. The term is frowned on these days for its colonial overtones.

The Japanese economy is in the doldrums, and not without its corporate woes as the Toshiba scandal has shown. Executives there have fallen on the swords after revealing they overstated profits (as happened recently at Tesco). But nonetheless, Japan remains a powerful force in the world economy – as the Nikkei acquisition shows.

Other nations where Irish missionaries once won soldiers for the pope’s many battalions are also showing the west a thing or two financially: Taiwan, still contested territory, Singapore where this week David Cameron has been touting for business for Britain, and of course the mighty China.

Still nominally communist, Mao’s successors have embraced the free market, as once the pigs did the farmers in Orwell’s Animal Farm. China too has been on a bumpy ride this past week. Stock markets can plunge, even in an economy as meticulously planned as the Chinese.

Such is the interconnectedness of the global economy, that the fall in the Chinese market is said to have cost US investors almost $60 billion (the equivalent of a company the size of global technology giant HP). Those of you piling money into company pensions will have been impacted indirectly. China has been seen as a pretty safe bet to now.

Regardless of these specific difficulties, the Asian economies will continue to grow in strength at the expense of the west. China is likely to become the world’s economic powerhouse, supplanting America. Without wishing to indulge in racial stereotyping, our Asian brothers tend to work harder and pay themselves less.

The American Empire (with its protectorates in Europe) is on the wane. It is still enormously strong economically, politically and militarily as President Obama’s emotional ‘return’ to Africa has demonstrated. But all the signs of decline and fall are there.

By stealth China is buying up real estate and influence in western nations, but in Africa it is investing billions in major infrastructure initiatives – ports, roads, rail and power. Africa remains rich in natural resources critical for China’s economic development; the Chinese now pump in more than the US, and ship out oil and minerals essential for industry.

As the tectonic plates of the global economy shift, where does that leave Northern Ireland? It is a tiny economy whose deficiencies have been well explored on these pages. It is also hobbled by being wedded to a much bigger economy centred on London. Being part of a large economy can be a strength, but it is also a weakness, as cities like Manchester, Newcastle and Glasgow know well.

Regardless of the constitutional niceties, the UK link has created a dependency culture here. Devolution provided the opportunity for the region to take greater control of its own destiny.

But the Executive has not proved to be up to the task; and it is not just because of the tension between nationalism and unionism. There is no consensus about how the economic needs of society are best met – within the parties, never mind between them. And there is no consensus about the priorities for Northern Ireland.

This economy is in an accident and emergency department where triage isn’t practiced. Doctors are focusing their attention on minor injuries rather than potentially mortal wounds.

Worse still, those with the capacity to help Northern Ireland out of its difficulties feel they are being ignored. We have all been in a position where the person we are talking too nods encouragingly, but doesn’t listen.

That’s how business feels about the Executive.

There is no doubt about the problems facing those who govern us. Needs grow and resources dwindle. But there is a limit to how much more you can do for less. We need to find a way of growing the pot.

There was once a time when the relationship between Britain and Ireland mattered, where sovereignty mattered, where protectionism could help countries withstand global competition.

But that world has gone. In Northern Ireland we are still fighting the wrong war.

The big issue is how do we invest limited resources where they are best able to stimulate growth, generate income and create wealth to be reinvested in those areas that best improve quality of life.

  • A version of this column appeared in The Irish News on July 31 2015