Republican News · Thursday 11 October 2001

All island response needed to economic crisis

BY ROBBIE MacGABHANN

As jobs seep out of the two Irish economies, what is the most pressing issue in the minds of the 26-County government? Could it be getting publicity from having the chair of the UN Security Council? Maybe it's working on the upcoming budget and planning a sleight of hand that will please voters with another short-term give away that covers up the long term vacuum in investment and planning. Maybe it is the next Leinster House election that has the Fianna F·il/Progressive Democrat coalition's attention. One thing is clear - the coalition don't have their eye on the ball where the economy is concerned.

Over 2,000 redundancies are to be announced at Aer Lingus this week. This figure, which amounts to over 40% of the workforce at the state-owned company, will have serious consequences for not just the airline but also the local economy of North Dublin, where many Aer Lingus workers and their families live. Coming on top of other closures such as 900 jobs at Gateway, it is another serious job blow to this area.

Public Enterprise minister Mary O'Rourke has been dealing with the Aer Lingus crisis, but it still unclear, despite her reassurances, just what is the plan to rescue the airline and ensure that an island economy has a national airline. If you think it is implausible that we wouldn't cast you mind back to the slow death presided over by successive governments of Irish Shipping.

Ireland is one of the most export and import orientated economies in the world, yet there is no Irish shipping company. Someone is making profits from shipping goods in and out of Ireland but not an Irish company. There is nothing to reassure us that Aer Lingus is not heading down the same route.

71,000 JOBLESS INCREASE

It is clear that the economy is heading into recession. The questions we need answered are how long is it going to last and what impact will it have, not just on the international situation but on the Irish economy also.

The Economic and Social Research Institute (ESRI) published an economic review recently that provides economic forecasts for the years 2001 to 2007. The ESRI believes that growth will fall significantly in the next year but will recover by 2003. House prices could fall by 15%, which will be welcome news for some. However unemployment is set to rise to 6.3%. That means that another 71,000 people could be claiming unemployment benefit over the next two years. The Dublin government needs to be taking this information on board and explaining what it is they plan to do.

International Monetary Fund (IMF) report also published in late September does not offer much comfort either. The IMF's chief economist, Kenneth Rogoff, believes that the global economy is on the brink of recession and that the economic effects of the World Trade Centre tragedy are only worsening an already difficult situation. When you add in the effects of another 190,000 people being made unemployed in the US in the month of September, coming after a loss of 130,000 in August, you have clear signs of real economic crisis.

2,000 SIX-COUNTY REDUNDANCIES

In the Six Counties, economic prospects are also bleak. A forecast from business consultancy firm Price Waterhouse Coopers (PWC) is also forecasting an economic slowdown. In the last two weeks over 2,000 redundancy notices have been registered with the Department of Enterprise Trade and Investment.

The negative effects of the economic down turn do not end there. As we move towards another budget the need to redress economic and social inequalities is still as great as ever. However the decrease in tax revenue and extra costs from Foot and Mouth and Aer Lingus seriously constricts government's ability to tackle problems they have left on the long finger such as an inequitable and underfunded health and education services.

RICH FIVE TIMES BETTER OFF

other ESRI report released this week has shown that the richest one-third of 26-County families have benefited more than five times the poorest one-third over the last 14 budgets.

A National Economic and Social Forum (NESF) released this week also highlights another aspect of the level of inequality in Irish society today. The NESF study into lone parents has found that the number of single parents claiming social welfare benefits has risen sixfold over the past 20 years. Lone parents are at particular risk of experiencing poverty. Their educational achievements and labour force participation rates are also low.

Clearly, there is a lot of work to be done by any government and they need to take account of the fact that the whole of society is being negatively effected by the downturn and those with low incomes or dependent on welfare will suffer most.

A good first step would be to recognise that the Six-County economy is clearly experiencing the same difficulties as the 26. Why is there no joint plan between the two? The Employment ministers Reg Empey and Mary Harney meet regularly through the North South Ministerial Council. Surely they should be meeting now to discuss an effective and equitable joint response to the economic difficulties or is a job lost on one side of the border not the same as one lost on the other?