What is an integrated Irish economy, anyway?

Following on from yesterday’s introductory post about the Southern economy, I have a question that I have never had a clear answer to anyway: just what on earth would an all-Ireland economy look like?Whatever did happen to the fantasy of an all-Ireland economy? Since the recession kicked-in politician after politician in the South has lined-up to bang the drum for shopping locally. Crossing the border, in particular, has become an act of treachery, at least according to some more swivel-eyed government ministers. I was stunned to find myself agreeing with Ben Dunne, but when he waded-in on this issue I wanted to shout his comments from the rooftops. In a nutshell, Dunne said:

– The North of Ireland is still Ireland
– The prices in the South are 20–30 per cent higher – it’s not minimum wages, rents or VAT that’s the problem, it’s retailers ripping people off
– Southern retailers: stop whining and lower your prices

Unionists might want to take issue with the first point but I assume we can all agree on the latter two.

There is nothing new in people heading North. When I was a child in the 1980s my entire extended family did most of their shopping for high-value items in the North. The fact that they had Northern connections probably made this easier but I rather doubt it was an unique experience.

The bizarre complaints by the government are obviously an attempt to shore-up the economy through consumption but do they also represent something more noteworthy? Such as, the abandonment of the ‘unity-by-economy’ strategy beloved of Fianna Fáil, the SDLP and, latterly, Sinn Féin.

Shopping is only the most visible expression of economic activity and economics do matter. Does anyone remember the old trope that “the South couldn’t afford the North, even if it wanted it”?

During the week I spoke to a Traditional Unionist Voice (TUV) spokesperson for an article I was writing on the British-Irish institutions set-up in as part of the peace process. The TUV spokesperson expressed some interest in the institutions but compared them unfavourably with the North-South bodies, arguing that, unlike the British-Irish bodies, they “deal with economic matters because it is a very short step from economic integration to total political union – but as soon as a power becomes devolved it automatically comes under the ambit of the North-Southery established by the Belfast Agreement.” (1)

The day-to-day reality for many of is that the border is an irrelevance, at least when it comes to matters like commerce. As someone who disapproves of politicised shopping, whether in the form of cod-nationalism or supposedly ‘ethical’ activity, I am glad about this. (2) But even if ‘North-Southery’, as the TUV fears, is genuine, what does it mean in economic terms? How can two polities share an economy other than in the sense of trading with one another? Smuggling has always been a big issue in Ireland, even moreso now with tax hikes on fuel and cigarettes, but surely it is unavoidable due to the fact of the border?


Jason Walsh is the editor of forth magazine


Footnotes
(1) British and Irish baloney, Jason Walsh, forth, November 20, 2009
(2) For my money, shopping is apolitical because it is largely passive activity that is located at the wrong end of the production-consumption spectrum. See: Content producers of the world unite!, section three ‘Giving up on production’, Jason Walsh, spiked, August 11, 2009

  • aquifer

    Getting the whole show from idea to production and investment happening here sounds integrated. How to get irish inventers creators producers and investors together?

    Americans manage it with much more difficult geography.

    Maybe InvestNI should host economic speed dating fairs, sector by sector.

    Do it on the internet and the Americans will poach the talent.

  • Drumlins Rock

    Just to throw a spanner into the works how much does a British Isles economy operate at present? there is closer integration happening all the time, mainly the Irish buying into GB in boom years, this i’m guessing could be revesed over the next few years, the economic re-integration of ireland with the UK mite be a live topic of discussion within 5 years!
    I live within sight of the border it is still a reality in many ways like any of those across europe, but much less an issue than it was. The people most effected by it are those who live on the southern side but are Belfast centric, they are enjoying the strong currency atm. most have learnt how to work things, those with biggest problems at the ones who work in the north, the cut in income is hitting hard.
    Who can predict what way things go, the last few decades have been quite a roller coaster.

  • A little bit of Walsh balony 🙂

    So-called ‘East-West’ links between Britain and Ireland created as part of the peace process are a waste of time

    I thought it was the UK and Ireland, Jason. Also two or more administrations can get together to develop whatever projects they consider beneficial. It’s not just a London and Dublin tete-a-tete as was involved in the Hume 3-strand analysis.

  • Jason Walsh

    Nevin:

    I never said I was impartial 😉 Anyway, that’s a matter for the other place. I only posted the link because of what the TUV said about the disparity between economic components to N-S and lack thereof in E-W.

  • Itwas SammyMcNally whatdoneit

    Jason,

    there have been a few discssions on Slugger regarding the cross border shopping ‘treachery’ and half way through the last discssusion it became clear that unless you actually have the figures that show whether the Northern Irish territories or Southern Iirish territories are the net benificaries it is a pointless discussion – ie why discuss how terrible it is for the South to lose VAT revenue to the North when they may actually be gaining from the Northern cross border spend on petrol.

    Any ideas what the actual figures are?

    On the substantive point of an All Irealnd economy hopefully we will at some point see some movement on tax harmonisiation North and South but the border seems increasingly irrelevant and we can now enjoy seeing the ministerial mercs heading over the frontier.

    It has always puzzled me why Trimble and Hume et al didnt press for fiscal powers to be part of the GFA settlement – afer all from a Brititsh point of view, given they are more than happy to see a United Ireland, if people in both parts of the island want it, why then would they resist passing tax raising powers to Stormo if that is what the natives asked for.

    Drumlins Rock,

    re. “Who can predict what way things go, the last few decades have been quite a roller coaster”

    Absolutely agree, perhaps the IMF running the show in South perhaps a good old fashioned sterling crisis and PoshBoyDC knocking on the big Euro door cap in hand and begging for a place to park the pound.

  • Jason, that’s why I suggested a merger of Strands 2 and 3 so that there would be a sensible and balanced development of all the relationships across the archipelago as well as linking in to ‘mainland’ Europe and further afield. I set this in the context of shared sovereignty for NI.

    Too much blether about an all-island economy IMO pushes Unionists and Nationalists in NI even further apart.

    London took ages to accept Ireland as the name of the ’26-county’ state and it seems Dublin (and some semi-politically literate folks in London!!) is still struggling with the UK label.

  • Nevin,

    Well, with regard to nomenclature, in the above Ireland means both states and Britian means Britain, not the UK. The reason for this is that my argument about the E-W links was that they appear to me superflous as all of Ireland has always had strong links with Britian through migration etc.

    Sammy,

    I’m not even sure reliable figures on that could be calculated at present. Certainly I’d be suspicious of any issued by retailers, business organsiations or the governments.

    Good point about Trimble and Hume. It is interesting.

  • Itwas SammyMcNally whatdoneit

    Jason,

    RE. “I’m not even sure reliable figures on that could be calculated at present”

    Thats what makes such ‘treachery’ remarks not just sound inappropriate but silly as the Southern Territories may be net beneficaries from this trade.

    Nevin,
    re. “a merger of Strands 2 and 3”

    I dont think our poor unfortunate friends in the DUP, in their current state of diminishing electoral fortunes, would welcome such talk – just keep it up your jumper until Police and Justice is transferred.

  • Junior Apparatchik

    Why would anyone want to unite their economies? Rationally, I mean?

  • Mr Brightside

    Maybe having two economies on the island is ultimately a good thing for all of us.

    Competitiion drives innovation, fosters dynamism and makes us play to our strengths and address our weaknesses. If there was no cheapo North, the South might not feel the pressure to lower prices.

    Complacency is never a good thing, and perhaps two competing economies keeps everyone on their toes.

  • Itwas SammyMcNally whatdoneit

    re. “Maybe having two economies on the island is ultimately a good thing for all of us”

    Many, including more than a few well established businesses, would neve have gotten of the ground if it were not for the proceeds of smuggling/partition compensation tax(PCT).

  • greagoir o frainclin

    Surely the Republic of Ireland’s economic ties should lie soley with England – the economic powerhouse of the UK. Trade between the two nations have never been better. NI is just a provencial region of the UK…and just worth some loose change really to the south. BTW, we in the Republic of Ireland are worth far, far more to NI’s economy and the English Exchequer.

  • Coll Ciotach

    I for one would welcome companies in the occupied territory being allowed to register as Irish companies in Ireland under a shared future concept.

    This would at a stroke harmonise company tax.

    The Republic overly depends on Britain as a trading partner and should seek to put more of its eggs in other nations baskets, as an export driven economy they are suffering due to the massive contraction of economic activity in Britain.

    For its own economic health Ireland needs to develop more trade with the mainland,anyone who wants economic ties solely with England is away of the mark.

    The two economies are bad for business and the consumer. The cycles do not allow for any stability in business either side of the border, (except perhaps for firework sellers and smugglers), just look at the trail of abandoned petrol stations north of the border to illuminate the point. Would you trade near the border by choice if you are interested in the long term.?

  • borderline

    The economies of North and South are not united for a simple reason.

    NI is part of the UK which has a different legal system (which underpins trade) and a separate currency from the ROI. This fact (unpalatable as it is to me) cannot be wished away.

    The economies of say France and Germany, or Spain and Portugal are closer inasmuch as at least they use the same currency.

    Now trade goes on across virtually all borders where it makes econonmic sense.

    So we have grocery shoppers in NI from the northern half of ROI, like there were petrol shoppers in ROI from most parts of NI not so long ago.

    Obviously bulky goods such as concrete and timber, coal and the like will come from the nearest source.

    And there is sense in link-ups for fresh foods and agricultural products.

    But the continual wishery and hopery sounds a bit contrived and pathetic.

    Business is business; if it makes sense it will be done.

  • Jason,

    Britian means Britain, not the UK.

    In common usage “Britain” (unqualified) usually means “UK” and not “Great Britain”. Illogical, but that’s how it’s done. Except in Galway, where “UK” seems to mean “Great Britain”…

  • “with regard to nomenclature”

    Jason, as we’re dealing with politics I think it’s much more important to use political rather than geographical labeling. I’m not sure what point you’re making about migration as that operates in all directions whereas the 1998 Agreement is about infrastructure, etc.

    Andrew, London is slowly moving away from the use of ‘Britain’ as the name of the state – even if DCMS is a bit slow to catch on 🙂

  • poolio

    I see the writer prefers to censure comments that ask the obvious –

    who cares?

    This is the economy Jason currently thinks we should be busying our debate over – http://ow.ly/EKIW

    er, no thanks mate but cheers for thinking about us during this terrible time for your good self!

  • Pierre

    When I visited your country recently, I crossed the border but didn’t know at what point. It is physically irrelevant. Your economy is becoming more integrated in north/south trade each year.
    The collapse of sterling has abetted southern shoppers buying everything from beer to apartments in northern Ireland. Integration is happening as we speak.

  • poolio,

    I have no idea what you’re talking about. I have neither censored nor censured anything. I don’t have any administrative privileges here, nor do I believe in censorship anyway.

    Aussi, comment savez-vous où je viens? Je n’ai cité où je suis. Pour tout ce que tu sais que je pourrais être suisse. In short, I am not the issue.

    AG,

    No, sorry, not when I’m writing. Britain always means Britain and the UK always means the UK. I am not being pedantic, it’s important to be consistent for clarity. I’m told in Galway they commonly say “pants” for trousers but I suspect it’s an affectation, if true. In the context of my argument I was talking about genuine links from Ireland, North and South, to Britain. Links from Ireland, North and South, to the UK wouldn’t make sense as NI is in the UK.

    Nevin,

    The point about migration is simply that Ireland has always had links to Britain.

  • Jason,

    If you want to be clear, use “Great Britain” for the island. “Britain” too often means “UK”, as I mentioned above.

  • poolio

    So why would we want to go anywhere near a country so badly stuck in the mire – and apparently going to get far far worse.

    We don’t need their failed experiments in psuedo-journalism either