The Northern Ireland economy since the Belfast Agreement

Introduction

First things first. Northern Ireland is an incomparably better place to live nowadays. During the conflict years, news of another death or serious injury seemed unending, incessant to the point that it withered away any optimism about the future. At times, it seemed that the region was one bombing or killing away from outright civil war. No longer is this the case. Advances towards normalization have been continuous and are on-going: the hustle and bustle of Belfast is broadly the same as that found in any large provincial city in other parts of the UK or Europe for that matter. For sure, the peace is not perfect. Parts of Belfast are still encircled by so-called peace walls, standing as large perturbing landmarks to a deeply divided society. Segregated housing and education remain entrenched, causing the two communities to be cocooned from each other. Uncomfortable levels of sectarianism still pervade life in the region. While the ugly features of Northern Ireland politics should not be ignored, a sense of perspective needs to be maintained. It was never really likely that the region was going to move from a place riven by violent conflict to a fully-fledged democracy within a generation. Moreover, as the widespread revulsion to isolated acts of terrorism testify, the prospects of a return to large-scale violence are remote. Although it remains a work in progress, great strides have been made to building a sustainable peace.

The Belfast Agreement signed in 1998 is responsible for the emergence of a new, peaceful Northern Ireland. This international Treaty brought the curtain down on nearly thirty years of violence and embedded the governance of Northern Ireland in a range of 'internal' and ‘external' political institutions. Considerable discussion has taken place about the exact legal nature of the Belfast Agreement. This book skirts these discussions, although if interested Humphreys (2018) provides an authoritative and insightful account of how the Agreement should be understood legally. Instead, the focus of the book is to explain the contours of a nascent political bargain that slowly took shape in the decades after the signing of the Agreement and how this bargain has been seriously, if not irreparably, damaged as a result of Brexit. In addition.

it seeks to argue that to avoid years of political paralysis inside Northern Ireland, a radical departure has to occur in the way the Belfast Agreement is implemented. During the political turmoil in the run-up to Brexit, the idea gained currency in some unionist circles that the Belfast Agreement had outlived its usefulness; that the Agreement was past its sell-buy date. This book develops the exact opposite view. Rather than being redundant, the Belfast Agreement potentially provides a political architecture for the development of a new Ireland in the post-Brexit era.

This argument gradually unfolds in subsequent chapters. The purpose of this chapter is to set the context by assessing the performance of the Northern Ireland economy since the signing of the Belfast Agreement. When the Agreement was signed in 1998, the widely held expectation was that it would lead to a virtuous era of economic prosperity. This chapter shows these early expectations have not fully materialized: the outbreak of peace has not led to a stepwise change in the performance of the Northern Ireland economy. More than two decades after the signing of the Belfast Agreement the structure and dynamics of the Northern Ireland remain more or less unaltered. Northern Ireland continues to be as reliant on a large annual subvention from the UK Treasury as it was in 1998 to maintain living standards in the region. Yet the news on the economy is not all bad. One of the most significant economic developments since the signing of the Agreement has been on-going progress towards creating a fairer labour market in Northern Ireland, at least in terms of religion. In the two decades since the signing of the Agreement, the traditional contrasting positions of Catholics and Protestants in the labour market have ended. Widespread, if not systematic, employment discrimination against Catholics was one of the big injustices that fuelled the Civil Rights movement in the 1960s. For all intents and purposes, labour market discrimination against Catholics has ended: such has been the improvement in the labour market performance of Catholics it is no longer credible to argue that Catholics face widespread discrimination in the jobs market. If there has been any peace dividend, it is this development. This chapter explores this issue and others in greater detail in an endeavour to map out the political economy of peace. The assessment starts by setting out the economic legacy of near 30 years of conflict.

 
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