North’s political woes keep investors at arm’s length

PricewaterhouseCoopers’ managing partner, Stephen Kingon, gave the warning this week, and spelled out in stark terms just how bad the situation facing the North had become.
Foreign investment, Kingon revealed, was at 30 percent of what it was three years ago, when there was still considerable optimism over the peace process.
Despite there having been no serious upsurge in violence in the last three years, it is the lack of political progress that is still keeping potential investors at bay, he concluded.
The North needs to “paint a vastly more attractive picture to the few investors currently scouting EU locations,” he said.
PricewaterhouseCoopers’ analysis showed that it is public spending from London that is still largely keeping Northern Ireland afloat.
Growth in the next few months to years would be slow, Kingon said, although Northern Ireland would still grow by more than 2 percent.
That’s not enough, Kingon said.
“Northern Ireland has successfully delivered 2 percent growth since the mid-1990s, so this forecast represents little challenge,” he said. “Northern Ireland performs well because of continued public expenditure locally and relatively poor growth in other UK regions.”
Falling export demands and slower manufacturing were worrying factors, he said.
“Although we believe that the UK is gradually recovering, the level of recovery is — and will remain — modest,” he said. “With over a third of Northern Ireland exports destined for GB markets, this will pose problems for manufacturing exporters and investment confidence.”
While Kingon did not point directly to politicians and their parties, few people needed any reminder of the divisions that bedevil the province earlier this week.
The DUP’s Gregory Campbell claimed that a new survey shows Catholics are three times more likely to get new jobs than Protestants.
“The fact that the Roman Catholic population is so closely represented in the job market now,” said Campbell, “starkly demonstrates that over the last number of years jobs have been going to Roman Catholics at a disproportionate rate as opposed to Protestants.
“This report highlights that during the period [1990-2001], 59,000 more Roman Catholics were added to the employment total and only 19,000 Protestants were added to that total.”
He added: “This report highlights the folly of using the unemployment differential, which in fact remains much the same even after jobs are being given to Roman Catholics at an inordinate rate.”
As political developments in the North remain uncertain, the economic outlook can only be damaged by further sectarian infighting.
Said Kingon in his conclusion: “The economy should be on the top of the political agenda but, unfortunately, it is not and the lack of political progress is being perceived unfavorably in the USA, the biggest source of foreign direct investment.”
The PricewaterhouseCoopers report concluded that there would be another round of layoffs before long.
Last week, a campaign was launched in Northern Ireland to double the number of foreign companies investing in the province within three years.
Called Invest Northern Ireland, the strategy was announced by its chairman, Fabian Monds, as “ambitious but achievable.”
Invest NI chief executive Leslie Morrison said: “Economic growth is driven fundamentally by entrepreneurs, enterprising people who aren’t afraid of failure, and those in existing companies who are committed to innovation and growth.”
But it is hard to see how much can be achieved in the shadow of PriceWaterhouseCoopers’ somewhat gloomy report, without substantial political progress.