Seven steps to the all-Ireland economy

BY ROBBIE SMYTH

Demilitarisation, fair and effective policing commanding community support, the Good Friday Agreement institutions up and running, progress on justice reform and a new bill of rights are all important aspects of the Peace Process. In recent weeks it is some of these issues that have, in the aftermath of July's IRA announcement, been given prominence in the media.

Another element in building a new and just Ireland is the construction of an economy that serves the needs of our people. This week, An Phoblacht's ROBBIE SMYTH, who is also the party's representative on InterTradeIreland, one of the all-Ireland bodies set up under the Good Friday Agreement, outlines some of the steps that could be taken to start building not just an all-Ireland economy but an economy of equals.

A democratic economy

In Ireland there has never been a democratic island economy. Regimes have changed and governments have come and gone but Ireland's long history as Britain's first colony and a further 85 years of partition have left a scenario where the Irish economy has never been one that was built and run in the interests of all of its citizens.

There is widespread support today for the development of what former Ulster Bank Chairperson George Quigley called in 1991 the "island economy". In particular the business community has been an advocate of greater economic links between the Six and 26-County economies.

Today, the Irish economy has much more interaction than in 1991. This is because of factors like the EU's INTERREG and Peace and Reconciliation Programmes, through to the work of InterTradeIreland, who run 40 different projects and have created all-Ireland networks in areas as diverse as bio-technology, third level research, micro enterprise and pottery. However the core driver has been the effects of substantial economic growth over the last 15 years in the 26-County economy.

Added to this is the gathering momentum for deregulation and privatisation that is fuelling private sector demands for all-Ireland markets in energy, transport and telecommunications.

However the missing ingredients in all of these developments is democratic control of the economy and a programme of integration that benefits all parts of society. So what are the core issues that an all Ireland economy should address?

We need a vibrant, dynamic economy with a single currency, preferably one that comes with local control over monetary policy. We need to have one equitable tax regime and a fully integrated energy, transport and ICT infrastructure, based on the principles of environmental sustainability, quality of service, non-exploitable costs and universal access.

(1) Fiscal Autonomy

Economic activity on the island is being seriously hampered by the operation of two tax regimes and British exchequer spending constraints. A good first step would be a commitment from the British Government to allow fiscal autonomy for the Six Counties, within an all-Ireland setting. The Scottish Assembly has taxation powers so this is not that big a step.

A commitment to harmonise taxation and spending in Ireland could be phased in over a five-to-ten year period.

(2) Currency

Having two currencies on the island with the accompanying exchange rate volatility and conversion costs for business is hampering trade and economic development for both businesses and those workers who live on one side of the border and work on the other. The only winners are the banking sector.

While eurozone membership has involved a substantial loss of monetary policy autonomy so does participation in sterling. A process where the island economy can move to being entirely in the euro zone would be a second good step.

(3) Energy

A third step would be to develop an island-wide energy market, the priorities of which would be fair pricing, a strategy to ensure a nuclear-free energy grid with a substantial element of renewable energy provision.

A recent report said Ireland and Britain were two of the most resource-rich places in the world in terms of wind, tidal and wave energy.

What could be done now is to create a formal link-up between the Six and 26-County electricity regulators, with the aim of creating an accountable, transparent, environmentally driven all-Ireland energy regulator.

(4) Communications

The need for an island-wide regulator is all the more urgent in Ireland because business and households need an all-Ireland broadband service. At the same time the activities of the MMO2, Vodafone, Eircom and others need to be regulated closely. Already the mobile companies in the 26 Counties earn more revenue from customers here than in any other global market. The establishment of the island as one network for fixed and mobile phones is a much needed fourth step and could be achieved in the very short term.

(5) Transport

Developing an efficient cost effective road rail and public transport network on the island is a prerequisite for successful economic development. We need the two assemblies to develop a long-term strategy for creating a fully integrated network.

Public commitments on the N2/A5 Dublin to Derry road, reopening the Dublin Derry train line as well as the West on Track project would be good first stages in this process.

(6) EU and imaginative funding

The German Government negotiated a protocol in the Nice Treaty and now stalled EU constitution, allowing state aid to help overcome the negative effects of the partition of Germany. The Irish and British Governments should seek a similar protocol for Ireland particularly as the EU constitution project could return to the drawing board soon.

The positive role of the public sector and the need for imaginative funding strategies such as joint Dáil/Assembly share ownership of all-Ireland development companies needs to be explored, such as an all-island rail or bus company, or nationwide broadband service provider. A public commitment to both these strategies would be a positive sixth step.

(7) An all Ireland job creation strategy

We need to consider where the next decades of jobs are coming from, especially as it is clear in the both the Six and 26 County economies that traditional areas such as agriculture and manufacturing are either in a state of flux or in terminal decline.

We need to develop an island-wide approach to job creation and a democratisation of the development agencies. InterTradeIreland and Údarás are the only development agencies currently with built-in political representation.

An all-Ireland job creation strategy needs all-Ireland enterprise agencies. A seventh step would be to announce a review of the operations of all the development bodies. The objective would be to harmonise the development agencies on the island into one set of joined up transparent and democratically accountable organisations running from local enterprise to national development strategies.