Speech by Brian Cowen to the Northern Ireland Economic Conference 2005, 'All-Island Economic Cooperation - A Platform for Peace and Prosperity', (26 October 2005)

Speech by Brian Cowen, then Irish Minister for Finance, to the Northern Ireland Economic Conference 2005, 'All-Island Economic Cooperation - A Platform for Peace and Prosperity', Hilton Hotel Templepatrick, Co. Antrim (26 October 2005)

"This is a very timely Conference and I am delighted to be part of it. My warmest congratulations to Owen McQuade and his team for putting together what is now the tenth such occasion in the series of Annual Economic Conferences. The series has built a solid reputation for itself as a place in which sane and rational debate can take place about Northern Ireland's economic direction and future. That is a not inconsiderable achievement on an island where our debates are often characterised by other adjectives!

I am also pleased to share the Conference platform with such a distinguished array of speakers, drawn from political life, and the public and private sectors.

I am particularly pleased that, as your programme notes put it, the "growing North/South dimension to Northern Ireland's economic activity" has been fully acknowledged. It is on that dimension that I will be focussing my remarks today.

The British and Irish Governments believe that the statement by the IRA on 28 July, 2005 which pledged an end to the armed campaign was an important breakthrough for the peace process. On 26th September, 2005 the governments received a report from the Independent International Commission on Decommissioning which stated that the IICD had overseen a further and final major programme of arms decommissioning by the IRA. This was a landmark development which offers a welcome and important opportunity for progress.

The next step is to build trust and confidence across the community that paramilitary and criminal activities are a thing of the past, on both sides. I am heartened that the report of the Independent Monitoring Commission last week said that the initial signs about ending IRA activity are encouraging. The next report, in January, will be very important.

Northern Ireland has enjoyed seven years of stability and increasing prosperity as a result of the Good Friday Agreement. Many challenges and difficulties have been faced in the intervening years.

We should not take that progress for granted. We need to push on with the implementation of the Agreement. There will always be new challenges to face - and these are best faced by locally elected representatives serving the people in local democratic institutions.

The political process is not an end in itself. Far from it.

On a platform of peace, we can build prosperity, equality and a better life for everybody.

As I have said before, I believe that the process should incorporate a more prominent economic strand as we move forward. This would encourage greater economic co-operation between both parts of this island, for the mutual benefit of both. It could also accommodate co-operation on an East-West basis.

Both parts of the island face common economic challenges which need to be tackled over the next few years.

The North/South Bodies, established under the Agreement, faced that challenge on a practical basis. We are very pleased with the progress they have made in the interim, despite the political difficulties.

Several of the Bodies are directly involved in the North/South economic arena.

InterTradeIreland has a specific mandate in terms of the development of an island economy. It has made great strides forward in that regard, thanks to the inspired leadership of its Board headed by Martin Naughton and a talented executive. Increasingly, its programmes are focussing on the development of networks which bring the key players together in various Sectors of economic life, North and South. Feedback has also been very positive on innovative programmes such as Fusion, which brings together companies and academic institutions in both jurisdictions to tackle practical challenges faced by the private sector, and EquityNetwork which promotes an all-island approach to venture and equity capital.

Tourism Ireland has been another successful demonstration of the clear added value that comes from pooling resources North and South - in this instance in the critical area of tourism marketing and promotion. To the wider and distant world, the Glens of Antrim and the Lakes of Killarney are seen through the same lens - beautiful places on the island of Ireland. At last, we have been able to find a way to do the logical thing and market them together. The results have been hugely impressive, at a time when the tourism industry globally has been going through a very hard time.

In a parallel workshop at this Conference, Pat Colgan is describing the added value being brought by another North/South Body, the Special EU Programmes Body, which he heads so expertly. Pat is underlining how a joint approach to critical EU programmes such as Peace and Interreg makes such practical sense for both jurisdictions.

These and the other North/South Bodies are making a vital contribution to the development of practical approaches which bring clear value to both parts of our small island.

I wanted to refer here today also to some other activities taking place outside the scope of the new formal North/South architecture, which are also making a vital contribution to the development of an island economy.

I have referred on other occasions to the importance of an island approach to infrastructure investment. There will be important contributions to this Conference today by David Gavaghan and his colleagues at the Strategic Investment Board of Northern Ireland on the Board's ambitious plans for infrastructure investment in Northern Ireland. The Board has indicated a roll-out of some 16 billion pounds worth of investment on infrastructure in the North over the next ten years.

In the South, we plan an investment of about 75 billion euro in infrastructure over the same period. Taken together, this means an outlay of over 100 billion euro on the island as a whole between now and 2015.

That is a phenomenal amount of tax-payers money. With it goes an equally huge responsibility to get it right. In my view, getting it right for the taxpayers both sides of the border means working together. Planning together. Pooling our resources. Getting the best deals in the financial markets. Sharing information on the hard policy choices. And, of course, joining up that which needs to be joined up. Infrastructure is a key challenge that we need to tackle together.

As I said last week in Dublin - when I announced a range of initiatives to improve value for money in public expenditure - I and my colleagues in Government are determined to deliver projects on behalf of the taxpayer that are to the highest international standards; that are on time; and within Budget. These initiatives - covering areas such as ex-ante evaluation, project management and contractual arrangements - are rooted in the imperative of ensuring that every euro is appropriately spent and that taxpayers get value for money.

My Government, through, in particular, the Taoiseach, Bertie Ahern, my colleague the Minister for Foreign Affairs, Dermot Ahern, and I myself as the Minister with overall budgetary responsibility, have been stressing repeatedly in the course of this year that this is an area of crucial importance for us going forward. By the way, Dermot Ahern did so most recently at an SDLP-organised conference in Derry on the theme "North/South Makes Sense" and I would like to congratulate the SDLP on that excellent initiative.

The Taoiseach, Minister Ahern, Minister Dick Roche and I have placed particular focus on the importance of spatial planning on an all-island basis as providing a rational template for taking forward the delivery of an effective island infrastructure and some valuable work is underway in that regard on the part of InterTradeIreland, in conjunction with our Department of the Environment and the Northern Department of Regional Development.

Other good work is also underway. For instance, my colleague the Minister for Communications, Marine and Natural Resources, Noel Dempsey, is in intensive discussions with Minister Angela Smith on advancing the all-island energy market - a goal agreed by everybody in the Sector as making sense and something that will ultimately both better guarantee continuity of supply and drive down charges. Significant progress has already been made towards an all-island energy market. This is important if we want to achieve economic and sustainable energy resources. We want to see cheaper energy prices and better security of supply.

We also need to look at regional development. There is much talk of ensuring there is balanced regional development - outside of Dublin and outside of Belfast.

If we’re serious about this, we need to plan and invest accordingly. In the South, we are investing massively in inter-urban motorways to reduce journey times and improve business efficiency. More importantly, they increase road safety, reduce congestion and give people more time to spend with their families and friends rather than in their cars.

We need to make sure that the island’s road network in the future is joined up and is of the quality needed in the 21st century.

We are also investing in infrastructure and services throughout the regions. We need to make sure that our key regional hubs and gateways have the infrastructure and services they require to prosper. It is not just about roads - it’s about education and health services, high-speed telecommunications, energy supply and industrial development.

There is of course a particular synergy in the North West of the island, where both Derry and Donegal have suffered from their relative peripherality. The Irish Government stands ready to play its role in working together to address these issues.

I am sure the British Government will also wish to work with us to promote the development of the North West. A good recent example of a win-win approach is the joint funding by the Irish and British governments of a 15 million Euro package for the development of Derry Airport that will bring real benefits to both sides of the border.

There is much more that can and must be done.

I and my colleagues look forward to an enhanced engagement with our Northern Ireland counterparts over the coming period as we seek to make real the huge potential that exists in all of these areas.

Mr Chairman, I am first and foremost a politician and could I now make an expressly political observation. It is my profound hope that the intensified political engagement currently underway will see the earliest possible return of the Northern Executive and Assembly.

If there was any one act which could most contribute to the development of enhanced economic activity, both within Northern Ireland and between the two parts of the island it is that.

With all due respect to my British counterparts - all of them fine men and women! - I greatly look forward to the day when my colleagues at the other end of the discussion table on all of this are Northern Ireland politicians such as those on your Panel this morning - Jeffrey Donaldson, Mitchel McLaughlin, Sir Reg Empey and Alasdair McDonnell.

In my humble opinion, the process of public policy works best when those overseeing it are directly accountable to the people that they govern. It is out of that tight and immediate engagement - with ultimate judgement passed by the public so governed in a ballot box every four or five years - that we are most likely to get public policies that work and are sustainable. With the process of Direct Rule for the last three years, that vital check-and-balance has been missing in Northern Ireland. My fervent hope is that the conditions will soon exist when the Executive and Assembly will be fully restored and directly elected politicans can resume responsibility for Northern affairs, as willed by the people in the Good Friday Agreement.

That in turn will enable the resumption of the work of the North/South Ministerial Council, a process of engagement that I greatly enjoyed between 1999 and 2002.

When the Council resumes its work, it is clear that its agenda will be a full one, including the taking forward of all-island economic co-operation.

It is not for me to comment on detail on the Northern Ireland economy - there are other speakers at this Conference more eminently qualified to do that. But I am on record as arguing that some of the underlying macro features of the economy here are clearly troubling notwithstanding the success of certain sectors of the economy here. A number of expert surveys have put forward the view that the economy, while doing well, suffers from serious structural weaknesses, which if not tackled will create economic and social difficulties down the line.

The Secretary of State himself, Peter Hain, pointed out in a recent speech that public spending in Northern Ireland accounts for over 60% of GDP and that is, per head, nearly a third higher than the UK average and far higher than equivalent advanced economies across the world. For the record, the equivalent figure in the South is almost 34%.

That statistic alone, I feel, underlines the scale of the challenge facing Northern politicians when they return to Stormont over the next while.

I know that organisations such as the Northern Ireland Business Alliance have been engaged for some time helping to put together an economic agenda for Northern Ireland in conjunction with the major political parties here.

The structural weaknesses I have referred to include a major decline in employment in manufacturing, a contraction in employment in the agricultural sector and a comparatively low rate of new business formation and a relatively small average size of enterprise. There is also a need for higher levels of R&D investment and of course the infrastructure deficit requires significant investment.

Our island location on the edge of Europe makes the task of attracting foreign direct investment and promoting access to markets difficult.

Many of these challenges are common to both parts of the island.

Our strategic objectives are therefore very similar. I am very impressed with the determination of business leaders to address these strategic objectives here.

It makes sense to tackle the economic opportunities and competitiveness challenges on an all-island basis where such collaboration is of benefit to all.

No doubt there are some who might argue that the fact that the huge strides forward by the Southern economy over the last decade or so took place at the same time as major progress in the Peace Process was simply a matter of coincidence.

I just do not accept that as being the case. This was no coincidence. Yes, it will be for the economic experts, working with the historians, to work out exactly the scale of the inter-connection. And undoubtedly there were several other factors involved in the rapid rise of the Southern economy.

But peace and prosperity have been, to coin a phrase, inextricably linked, over the last ten years. And they will continue to be so going forward.

That is why it is essential for the best and selfish interests of the South that peace is further bedded down, that the Good Friday Agreement is fully implemented. Of course, my Government want to see those things happen for their own sake - because it is the right thing for our country. But it is also in our economic interests.

And wearing my hat as Minister for Finance, I want to see every advantage gained and nailed down. As I have sought to make clear in my remarks today, I have no doubt that deepening all-island economic co-operation has a major part to play in that regard.

If the South is to get to the next level economically, an island approach will have to be a central plank in the exercise.

By the same token, I am convinced that in developing such an island approach to economic co-operation we will be further consolidating not just prosperity but peace as well.

John Hume's oft quoted dictum that it is in working together in the everyday issues of our common interest that the real process of healing will take place is as true today as when he first coined it.

Mr Chairman, I believe that we are at very exciting juncture in the life, economically and politically, of our great island. I wish the two Governments and the Northern parties well as they take forward their critical tasks over the next few months and seek to turn potential into reality.

The benefits of North South co-operation are very real. They are mutual and will lead to significant synergies. If we fail to co-operate, the negative consequences are inescapable.

My message today is let us be bold.

Let us put all our cards on the table.

Let us face all of our challenges in a hard-headed, professional manner.

Above all, let’s be ambitious for the future. And then let us deliver.

And Owen McQuade, I look forward to the 11th Annual Northern Ireland Economic Conference debating the economic priorities facing the newly-resumed North/South Ministerial Council!"