3 - When introverted politics and political economy collide

Summary

The Northern Ireland conflict and related political difficulties are well-known and well documented. The most immediate and visible impact has been in terms of lives lost, injuries sustained and hardship endured. The Troubles, however, reached into every facet and dimension of Northern Ireland society, and the local economy in particular was a serious casualty. Economic decline during the Troubles contrasts with the early years after the partition of the island of Ireland, when the Northern Ireland economy was strong (Rowthorn 1981: 3): “When Northern Ireland was created [in 1920] it was seen as an integral and self-supporting component of Britain’s imperial system, able to generate a surplus and help finance the military and other expenses involved in running the Empire.”

Agriculture, ship-building and a thriving linen industry were the backbone of Northern Ireland’s indigenous industrial base. However, the downturn in the manufacturing industry from the 1970s onwards hit Northern Ireland’s home-grown industries badly. The economic decline that followed also coincided with the onset of the conflict. During the 1970s and 1980s, the regional economy was in the doldrums. Against the backdrop of violence and serious political instability, foreign investment dried up, manufacturing stalled, outward migration grew and growth halted. Northern Ireland’s focus on local arguments was producing an introverted form of politics that was seriously undermining its economic well-being.

For a sustained period during the Troubles, the Northern Ireland economy lagged behind the rest of the UK and has persistently been the poorest performing of the UK’s 12 regions. From the 1990s onwards, the achievement of the peace process and the signing of the Belfast Agreement signalled a turning point in Northern Ireland’s economic fortunes. Since the 2000s, the so-called “peace dividend” may not have fully materialized (see Coulter 2014; O’hearn 2008), but nevertheless economic opportunities that presented themselves in the context of the peace process were an important factor in rejuvenating the Northern Ireland economy. In particular, inward investment increased, and there was also some growth in the construction, tourism and services sectors. The global economic crisis did dent the region’s longer-term recovery, and crucially, persistent structural problems continue to beset the Northern Ireland economy.