Posted on Tuesday 13 December 2011 by Ulster Business
She is talking about the Economic Strategy for Northern Ireland, published by the Executive alongside its Programme for Government to set out its priorities for getting the economy back on track – and then primed for growth.
In light of past criticism about a silo mentality among local Government departments the economic blueprint has been drawn up with input from the departments of Employment, Regional Development, Finance, Enterprise and the Office of the First and Deputy First Minister.
Minister Foster told Ulster Business that because it is an Executive document, it should mean things get done quicker.
“It is very much a living document, the proof of which is that we have an action plan that sits alongside it,” she said.
“It was recognised by Richard Barnett in the IREP report that there was a silo approach to economic development and I agree with him that there is a need to involve all of the departments in Northern Ireland in economic development. That’s why the economy is front and centre of the Programme for Government.”
The strategy’s twin themes are rebuilding and rebalancing – looking at both short term measures to prop up the economy as well as long term goals to make the region more internationally competitive in future.
“Since IREP our focus has been on the need to rebalance the Northern Ireland economy, but there is a huge recognition that the rebuilding piece has to come first. It is about getting people into jobs. While we have over the past couple of years been looking at high value jobs, there’s a piece of work to be done on the lower value jobs because we recognise that not everybody has a PhD or third level education. That’s what the (Invest NI) Jobs Fund is about,” the Minister said.
While Foster is concerned about the significant problem Northern Ireland currently faces with youth and long-term unemployment, she stresses that the unemployment rate of 7.3% should be looked at in the context of far higher rates across Europe.
“What we cover in the strategy is how we deal with the unemployment that we face currently because we’ve gone from 4% in 2008 to 7.3%, which is around the 61,000 mark. It is a significant unemployment statistic and it’s one I wish we didn’t have but it is one that needs to be put in the context that Spain has 21% and ROI has 14%. It is bad but it could be a lot worse,” she said.
With ambitious targets to promote jobs, attract foreign direct investment, encourage more exports and increase R&D activity, the strategy also looks to the future.
The Minister is concerned that not enough local firms are considering exports but she believes the successes of those who are exporting to international markets will show it is the best way forward and will reduce traditional reliance on the public sector.
“I think because we’ve been through 40 years of the troubles and because government had to step into areas maybe they shouldn’t have been in, there is a mindset that if anything happens, go to Government. We have to move away from that mindset and see Government as a facilitator of the private sector. Government facilitates, academia inspires and the private sector essentially delivers for the economy,” she explains.
“We cannot subsidise companies to do work. That is a mindset that Europe is stepping away from with the reduction in Selective Financial Assistance. Therefore our ability to do that is going to be heavily curtailed in future anyway, which is why corporation tax is such an important issue.”
With discussions this month set to tackle the tricky matter of exactly how much the potential devolution of corporation tax would cost Northern Ireland, the Minister is firmly of the view that it would make a huge difference to the economy and lead to a lot of reinvestment by indigenous firms in particular.
“It is amazing what we’ve been able to do in terms of FDI without corporation tax. After London, Belfast is the next biggest city in terms of FDI, which I don’t think people realise. We have 3.8% of the population and 7% of the FDI,” she notes.
“But if my team in the US, for instance, were able to go in and say we have (low corporation tax) as well as the skills, young people, low attrition rate, etc, I think it would really push them through doors they are not getting into at the moment. It would be a great door opener.”