From troubles to the Celtic Tiger
IAN PAISLEY, who recently stepped down as first minister of Northern Ireland, was well known during his 40 years in politics for his steadfast opposition to sharing power with "the other community" in that divided society. That changed dramatically last year, when Paisley formed a power-sharing government with Sinn Fein leader Martin McGuinness.
What drove this historic change? There were many reasons, one of which is that the political leaders of Northern Ireland recognized that a strong economy is the foundation for real, meaningful peace. Since last May, Paisley and McGuinness have focused their energies on improving Northern Ireland's economy to better compete globally.
I saw the problem firsthand. On my first visit to Northern Ireland in the 1995, I met separately with Catholics and Protestants on both sides of "the Peace Line." It's a wall, in some sections as high as 30 feet, in others topped with barbed wire, that has long divided Belfast. Both sides told me that there was a high correlation between unemployment and violence. Where men and women have few opportunities and little hope, they are more likely to turn to violence.
The conflict in Northern Ireland was not exclusively or even primarily economic. It involved religion, national identity, territory, and more. But underlying it, and exacerbating it, as in most conflicts, were economic problems.
At the time of the peace talks, we emphasized economic improvement, and the local and international business community strongly supported our efforts. They rightly saw economic growth and job creation as an important part of the solution to the conflict, and pressed for a reconciliation underpinned by both local and international investment.
Much progress has been made. In the 10 years since the Good Friday Agreement was struck, Northern Ireland's economy has shown signs of a turnaround. The region is the fastest growing destination for foreign direct investment in the United Kingdom. Unemployment is low, and there is a move toward economic diversification. There is also a genuine mood of optimism about the future. Many hope that Northern Ireland will be the next phase of the "Celtic Tiger," the apt characterization of the decades-long economic surge in the Republic of Ireland.
Challenges remain. The economy has a disproportionately large public sector, which can slow private sector growth. Public expenditure accounts for two-thirds of Northern Ireland's GDP, compared to 45 percent in the United Kingdom as a whole and 34 percent in the Republic of Ireland. Public spending was necessary to support the peace process, but over time, it will need to be reduced. The government knows that it can't do it too quickly, lest it induce a sharp recession and increase the possibility of a reversion to conflict.
In his final act as first minister, Paisley will host an investor conference in Belfast on the first anniversary of the power-sharing government. He will be joined by McGuinness and Prime Minister Gordon Brown. Together, they will welcome business leaders from the United States and other countries to discuss the future of Northern Ireland and encourage direct investment.
The timing couldn't be better. Because of the conflict, many lost the opportunity to participate in the economy in a meaningful way. The next generation, which now lives in a peaceful environment, will reap the benefits that peace has made possible: political and economic stability, trade and investment, good new jobs, and, ultimately, genuine reconciliation.
George J. Mitchell, the former US Senate majority leader, was chairman of the Northern Ireland Peace Talks that led to the 1998 Good Friday Peace Agreement.
