Esmond Birnie: Northern Ireland v Slovakia — assessing which economy wins

Northern Ireland play the Slovak Republic’s team on today for the Euro2020 play off.

By Alex Kane
Thursday, 12th November 2020, 11:45 am
Updated Thursday, 12th November 2020, 11:56 am
Northern Ireland's Paddy McNair with

Slovakia's Dusan Svento  in a match between the countries in 2016. They play again at football today. But how do the economies of the two match up? Pic William Cherry Presseye
Northern Ireland's Paddy McNair with Slovakia's Dusan Svento in a match between the countries in 2016. They play again at football today. But how do the economies of the two match up? Pic William Cherry Presseye

Both are small European economies, Northern Ireland population 1.9 million and Slovakia population of 5.5m, so comparisons in the fields of the economy and society may also be of interest.

Slovakia became an independent state following the “velvet divorce” within the former Czechoslovakia in 1993: the Czech Republic is about twice Slovakia’s size in population terms and is also a bit richer.

Economists traditionally summarise the performance of an economy by focusing on the level of output per person (ie Gross Domestic Product GDP per person with allowance for price differences between countries).

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Esmond Birnie is senior economist, Ulster University Business School. Picture by Brian Little

The GDP per person in Slovakia as a percentage of the level in Northern Ireland was (see below for source):

In 1911 69% (comparison to the whole of Czechoslovakia)

• In 1998 60% (Czech Republic 76)

• In 2018 90% (Czech Republic 106)

These figures confirm that Slovakia was a poor country but one where rapid economic growth, especially during the last two decades or so, has achieved substantial catch-up relative to Northern Ireland.

By 2018 the Czech Republic had in fact over-taken the levels of GDP per person in Northern Ireland.

If anything, Slovakia is likely to have moved even closer to Northern Ireland levels of prosperity during 2018-20 (IMF October 2020, forecast that during 2020 and 2021 Slovakia will experience growth rates of -7.1% and +6.9% and the likelihood is the Covid recession in Slovakia will be less severe than here in Northern Ireland).

Given that Slovakia was a former communist bloc country during 1945-89 how was this impressive performance achieved?

Are there any lessons which Northern Ireland might learn?

Pre-1918 the Slovakian lands were part of the Austro-Hungarian empire and so to an extent Slovakia has benefitted from the legacy of a German-style apprenticeship system and strong emphasis on vocational education.

It is probably this which Northern Ireland could learn from.

And then, what about comparisons in terms of covid and responses to it?

Here, if anything, the comparisons are even more unfavourable to Northern Ireland than the consideration of economic output per person.

As of November 8 781 people had died in Northern Ireland following a positive Covid test result compared to 351 in Slovakia.

Per million of population the Northern Ireland death rate was 411 and the Slovak one about 64 — the current NI death rate is roughly six times higher than that in Slovakia.

Admittedly, the infection and death rates have been accelerating in Slovakia in recent weeks but the scale of public policy response has been impressive.

At the start of November more or less the entire adult population were subject to Covid tests: 3.6 million people.

The resources used were considerable: 15,000 medics and 80,000 military personnel (for comparison, the entire NI NHS workforce is about 65,000 people).

Northern Ireland should certainly consider this example carefully especially when it comes to mobilising to provide any vaccine.

Esmond Birnie is senior economist, Ulster University Business School

Sources for GDP stats: For each year a NI/UK estimate is linked to one for Slovakia etc./UK. NI/UK for 1911 from F. Geary and T. Stark (2019), for 1998 and 2018 from ONS 19 December 2019. Slovakia etc./UK for 1911 from A. Maddison 2001, The World Economy: A Millennial Perspective, for 1998 and 2018 from OECD as recorded in The Economist 2001 and 2020, The Pocket World in Figures, 2001 and 2021 Editions.

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