An important academic paper has just been released outlining a compelling case for the reunification of this Island from a purely economic perspective.
It is important to emphasise that this is an economic, not a political, study. It envisages the likely outcomes in the event of economic reunion and demonstrates the clear potential benefits to both parts of the Island but particularly the North East.
The Report was commissioned by KRB inc. in California, compiled by Dr Kurt Hübner and Dr Renger van Nieuwkoop and includes an executive summary by Professor Steven Raphael, Professor of Public Policy. UC Berkeley, California. The full report is available Here.
Within the executive Summary the reports findings are condensed as follows:
In the short run, unification would result in the North’s adoption of the euro. At current exchange rates, this would effectively devalue the currency for the North, causing a shift in international terms of trade that would favor Northern Ireland relative to the U.K. and relative to other countries in the Eurozone. The consequent increase in exports is projected to initially increase per-capita gross domestic product in the North by 5 percent, and then fade back to the long-run growth path within seven years.
In the long run, unification would involve the adoption of the Irish tax system, greater openness in the North to Foreign Direct Investment, and diminished trade barriers between Northern Ireland, the ROI, and other countries in the Eurozone. A period of economic catch-up is likely to ensue whereby the Northern Irish economy would shift structurally from low value-added industries to high value-added industries. Additional benefits would derive from lower trade costs across the north-south border. These changes are projected to increase GDP per capita in the long run by 4 to 7.5 percent in Northern Ireland and by 0.7 to 1.2 percent in the Republic of Ireland.
Interestingly both parts of the Island would derive clear economic benefits but by far the greatest impact would be North of the current border:
“Irish unification would be economically beneficial to both parts of the island, and especially for smaller, poorer, Northern Ireland. “
The report goes on to look at detailed scenarios under the following headings (amongst others):
- Tax harmonisation
- Governmental functions
- Trade barriers
- Adoption of the Euro
- Effects on the Balance of Trade
- Rebalancing the wider economy
Naturally the above is a selective sample of the information contained within the report and I would urge readers to examine the full report as linked above.
Given the barbed comments of Unionist politicians regarding the (now resurgent) southern economy, the uncertainty surrounding the UK position within the EU, the upcoming electoral cycle North and South and the current Nationalist electoral apathy, this is a most welcome report based upon economic facts as opposed to wishful political thinking.
A smart pro-reunification political approach would be to analyse some of the facts contained in this report and develop a coherent, rational (as opposed to emotional) set of policies setting a new agenda designed to emphasise the strong economic benefits that would accrue to all the people of this Island when reunification takes place.