The Republic and Northern Ireland have seen a large disparity in productivity, beginning with a similar position shortly after the Good Friday Agreement. Professor Alan Barrett, CEO of the Economic and Social Research Institute, spoke to the Oireachtas joint committee on the implementation of the agreement and commented on the significant gaps between the two regions. In 2018, the Republic’s modified GNI* per capita was about 51% higher than GDP per capita in Northern Ireland. Household disposable income in the Republic was also 12% higher than in the North, with 14.3% of people at risk of poverty in Northern Ireland and 8.9% in the Republic. Moreover, life expectancy was 1.4 years longer in the Republic.
Professor Barrett discussed how, from 2001 to 2020, productivity in Ireland increased by 0.2% annually, while in Northern Ireland it decreased by 1.1%. This led to productivity levels in Ireland being approximately 40% higher than in Northern Ireland by 2020. He suggested a strategy for improving Northern Ireland firms through reforming education and skills provision and increasing investment, as well as improving levels of educational attainment and reducing early school-leaving.
When discussing the issue of subvention for Northern Ireland, the ESRI representatives said a potential unification should mean the Northern Ireland economy would no longer need it. Dr Adele Bergin added that regardless of constitutional change, policies should be in place to improve Northern Ireland’s productivity and living standards, thus reducing the need for subvention. Dr Seamus McGuinness also said low productivity can be fixed with the right investment and policy framework.
Finally, Professor Barrett said political stability in Northern Ireland would help investment. Dr McGuinness suggested the two health systems should merge to achieve economies of scale, as well as looking at the impacts of Brexit on the all-island labour market and infrastructural barriers.
