A Banana Republic without Bananas

According to Wikipedia a Banana republic is “a politically unstable country, whose economy is largely dependent on exporting a limited-resource product, e.g. bananas. It typically has stratified social classes, including a large, impoverished working class and a ruling plutocracy of business, political, and military elites. This politico-economic oligarchy controls the primary-sector productions to exploit the country’s economy.”

My assertion is this. Northern Ireland is a banana republic without bananas.  Our politico-economic oligarchy simply exploits all-comers: the British or Irish or EU governments, and big businesses.

Northern Ireland has no real substance to its economy. Sure, there are a few success stories, a few companies that have scaled and become globally important. But there are few. But compare Northern Ireland with, say, Estonia. Estonia has a tiny population – less than Northern Ireland’s. Yet it is ranked as one of the freest economies in the world. Its level of debt is miniscule – just 7% of GDP, compared to the UK’s 82%.  It uses shale oil, locally produced, to produce its electricity. Estonian software developers created Skype. Estonia also has the most advanced e-Government in Europe, if not the world.

Now let’s look at Northern Ireland, by comparison. Over 70% of our GDP is dependent on the public purse. Any attempts to investigate shale gas or oil reserves are scuppered by environmental protestors. We have a vast public sector workforce with appallingly poor productivity. Our tiny private sector employment base is dominated by a vast retail sector that pays low wages. Our middle class is either public sector dependent or dependent on the professional services sector that either has a parasitical dependence on the state or on a relatively small number of large, naïve corporations.

This type of economy is a veritable petri-dish of corruption. Politicians either 1) feel the need to lord over us and tell us how to live our lives or 2) plead for money from the UK, EU or Irish governments. Their egos are fed by big businesses or professional services organisations/banks.  None of our politicians has any significant mandate given the fact that only half the population actually votes – mostly tactically.

But politicians sit on the main income generating conduits and are, therefore, in prime locations to engage in cronyism or corruption. They can recommend their friends for plum jobs as advisers, overseers, or lobbyists. If the only money that comes into this place comes from government or quasi-government sources – government or political decision makers are in significant positions of power. And most politicians here have no business or commercial experience. Few, if any, have lived outside of Northern Ireland.

With devolution the opportunities for corruption have become manifest. Despite being clearly incapable of making any decisions, the Northern Ireland Executive has managed to wrest control of many of the functions of government from Westminster. The devolution of welfare, for example, has given local politicians greater opportunity to extort.

The NAMA NI scandal is merely the latest of many scandals that involve politically appointed advisers, politicians and professional services firms. Public inquiries create Barrister millionaires. Legal aid slush funds created solicitor millionaires. The great recession created vast publically funded pots of money for insolvency lawyers – paid for by EU bail-outs.

In short, ours is a banana republic where sycophancy, deal-making and corporatism play the banana parts.

Free market libertarian. Businessman. Small government advocate. Former Vice-Chair, Conservative Party in NI. Fellow, Institute of Economic Affairs. Former Regional Chair, Business for Britain (the business voice of VoteLeave).