DCSIMG

No change and no hope

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Comment

Last week the SDLP leader, Alasdair McDonnell, told his party conference that Northern Ireland needs a “prosperity process”.

It is probably the most intelligent thing you will hear a local politician say this year.

Pulling down flags, rioting, ripping the scabs off old wounds and rewriting history will seem irrational obsessions if bank balances are fattening and living standards are rising.

Former Defence Minister Liam Fox, when considering the factors that turn civilised societies into war zones, noted: “When economic and government systems fail, anarchy or terrorism can follow all too easily.”

Our system of government is so close to failure that American Richard Haass has had to be parachuted in. But flags, historical enquiries and the endless processing of peace will count for nothing if a greater focus is not put on saving the economy from failure.

Billionaire financier Warren Buffet famously said that it is when the tide goes out that we see who has been swimming without trunks on. It is also the case that when the water rises then those plodding about in lead boots will be in trouble.

Now that economies elsewhere are beginning to pick-up, there is a risk Northern Ireland will be left very exposed and there will be no global downturn for the politicians to hide behind. Already the data is showing Northern Ireland lagging behind in the recovery race.

If, as is increasingly probable, we see the British regions, the Republic of Ireland and even southern Europe return to rude economic health, while Northern Ireland remains in stagnant economic water then things are going to go bad. The mood of disappointment, alienation and resentment will return, as will the paramilitary parasites who feed on despair.

The public sector has a vital role in society, but it is obvious that its dominance here is now one of the major obstacles to economic, and thus social, improvements.

Rebalancing the local economy, from the public to the private sector, is vital to obtaining a prosperous and peaceful future. In part due to the blunt reality that the costs are no longer sustainable, but also to change the culture.

However, the political class show no appetite for enabling change and many politicians here actually believe that government spending constitutes a real economy, or understand that wealth needs to be created and taxed to fund government.

An easy place to start the change would be Northern Ireland’s lamentable public transport service. Privatisation, properly managed, could bring investment, expansion and improvement, yet any attempt to even seriously discuss this is met with the sort of response one might expect if you suggested selling children for organ harvesting.

Finance Minister Simon Hamilton recently even defended the bloated public sector, saying that he thinks it is not too big and even that its size can be an asset. He said: “We have taken a conscious decision not to [shrink it] because we recognised it is an economic driver.”

Years of failure at Stormont, decades of terrorism and reliance on other people’s money and unreliable big ticket inward investments have left Northern Ireland bereft of a small and medium business infrastructure, and fermented a culture that is often disdainful of private enterprise. This is not a conscious conspiracy, more the entrenched mindset created by decades of public sector dominance.

The only time politicians get enthusiastic about private enterprise is in connection with investment from large foreign organisations, the classical corporatist approach that keeps business and governments locked together and the junkets and photo-ops flowing. In contrast, empowering local small and medium businesses, the natural home of the independently minded, appears to be a low priority.

That benighted, lacklustre corner of the public sector responsible for economic development is symptomatic of the wider problem: it has clouded itself in a fog of self-serving spin, dodgy statistics, and is currently desperately flailing about to find people to pin the blame on for years of their underperformance. Flag protestors and banks are easy targets.

Mr Hamilton also recently suggested local businesses should push back at banks that do not lend them cash. The bankers have much to apologise for, but they are in the business of making a profit from lending money. That businesses cannot secure finance can be explained by the risk that banks attach to putting money into businesses in a region with scant economic activity and an increasing terrorist threat.

Banks have a limited amount that they can lend, and calculate that what money they have could be more safely used providing credit cards and mortgages to civil servants with secure incomes. This is one example as to how public sector dominance hinders economic development and how the political class remains complacent and complicit.

We were brought to his sorry situation by economy wrecking terrorists and the smoke and mirrors that covered national debt mountains, and probably there was little that could have been done that would not have brought about a similar result, but that is the past.

We face a future in a leaner, more competitive global environment, but the message from Stormont steadfastly remains: “no change, no hope”. We have a generation of young people with new ideas and wide horizons and they deserve better.

 

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