Breaking the border

Northern Ireland has always been distinctly different to its southern neighbour. Unlike the republic, its unstable political climate has inhibited growth by discouraging international investment.

However, things may be set to change. With a local government now in power, there has been a renewed interest in public-private partnership (PPP) work in the province. Up to now, these moves towards private investment in public schemes has been limited to areas such as education, but perhaps there is an opportunity now in the North to move beyond this to more central infrastructure projects.

Harry Coll, managing partner at Belfast firm Elliott Duffy Garrett, says: "We've seen virtually nothing in PPP - there's been little enthusiasm for it. A few education projects have gone on, but in terms of major infrastructure like the roads or water, neither have got off the ground. Contractors in the province are very uneasy about the whole thing. They're not anxious to charge into schemes if the government isn't committed."

Coll believes that much is dependent on the power-sharing government in Stormont remaining in control of the province. "At the moment, the public sector isn't very enthusiastic about PPPs, and ministers haven't found their feet enough to drive anything forward," he says. "But there's a severe risk that if local devolved institutions are suspended there'll be no one there in the future, once they find their feet, to speed up or force anything through."

The ripple effect that a downturn in the US economy would have on Ireland is the same in the north as in the south. Again, the IT sector is likely to feel it first.

Jeremy Hill, a partner at Carson McDowell, warns: "We're alright at the moment, but a serious downturn would have an effect. A good thing for Northern Ireland is that we're normally a little bit behind trends and have a longer gestation period for whatever the trend happens to be."

However, David Jameson, also a partner at the Belfast firm, believes the relatively cheap production costs of Northern Ireland continue to attract outside investment to the local IT sector. "The IT sector has been one of the most vibrant areas in the last couple of years," he says. "Belfast has been beating its drum - we have lots of new graduates, an availability of good staff and there's an increasing awareness in Northern Ireland that we're producing good IT products ourselves."

Perhaps one of the biggest disappointments is that cross-border activity and joint ventures between organisations on either side of the border have, so far at least, failed to materialise, three years after the Good Friday Agreement was signed in 1998.

The tourist industry is the one exception. Ireland is now essentially marketed as a single entity in an attempt to put the troubles of the past behind it. But the island now has the unenviable task of dealing with the recent outbreak of Foot-and-Mouth and the virtual closing down of the countryside, particularly in the Republic, which relies heavily on its agriculture industry.

The government has also expressed concern at the lack of contact between the north and south. Coll says: "There's been almost five years of peace, a booming economy in the south took off very quickly and still there are a lot of areas of both economies with no contact. There's no reason why, maybe just habit and history. The two parts of the country built a wall around each other for years."

But the habits of the past are slowly being broken down, and must continue to be so if cross-border activity, inward investment and the development of the Irish economy as a whole is to become manifest. Unfortunately, the recent bombing campaign by the Real IRA will have done nothing to encourage such growth. n