Peace proves profitable for N. Ireland

For years, Northern Ireland was a byword for brutality and fear. But now, the tiny province is selling itself as a central, low-cost land of business opportunity, and investors are buying.

A year after Catholic and Protestant political foes put aside decades of hostility and agreed to share power in a regional government, attention is focused on opening the public sector-heavy economy and attracting investment.

"There is no doubt that Northern Ireland is now seen as being open for business," Economy Minister Nigel Dodds said. "People now see a major opportunity."

Northern Ireland's proximity to Europe, its English speaking population and still relatively lower cost base than centers such as London are helping to lure foreign money.

US investors lead the pack and accounted for at least half the 1.1 billion pounds invested in the past five years especially in financial services, technology and pharmaceuticals. Asian and European firms are also arriving.

"Increased political stability has improved Northern Ireland's brand image in the eyes of the world," said Ulster Bank economist Richard Ramsey.

The government plans to pump almost 20 billion pounds into the economy over 10 years to develop tourism, repair infrastructure and regenerate neighborhoods that were violent flashpoints and scenes of clashes with British soldiers.

But there are hurdles. The corporate tax rate stands at 28 percent compared with just 12.5 percent in the Republic of Ireland, which boasts many of the same logistical and geographical advantages as its northern neighbor. Belfast is lobbying London to cut the rate, so far to no avail.

The global credit crunch, combined with a local housing market slowdown, could also put the brakes on growth in a region that was once a textiles hub and world leader in building ships, including the Titanic.

Success wins admirers

The province's success has won admirers especially among those seeking to rebuild their economies after violence or war.

Last month, a delegation from Iraq's southern province of Basra toured Northern Ireland to learn how inward investment helped transform the economy since violence abated.

A 1998 peace deal largely ended three decades of violence between majority Protestants, who favor British sovereignty in the province, and Catholics who mostly want a united Ireland.

Northern Ireland's authorities hope that era, which claimed over 3,600 lives and was known as The Troubles, is now closed, and they say they are already reaping a peace dividend.

In the past 10 years, over 100,000 jobs have been created, and the unemployment rate now stands at around 4.2 percent, below the UK average of about 5.2 percent.

Economic growth in Northern Ireland averaged around 2.9 to 3 percent from 1996 to 2007, which was above the United Kingdom's average of around 2.8 percent.

Aiming to build on this, Northern Ireland will host an investment conference this week, hoping to woo foreign firms to set up operations, especially in financial services.

US firms are among the most active, building on historical links between Belfast and the huge Irish diaspora in the United States.

Clinton's role

Former US President Bill Clinton was credited with playing a major role in securing the 1998 peace deal, and his efforts were backed up by solid US private investment.

In April, four New York City pension funds pledged to invest $150 million in a private equity fund that will target infrastructure projects.

"I think ... we have a great window of opportunity as far as the States is concerned," said Dodds.

Indian banking software provider Polaris said Citigroup's move to create a Belfast back office had been a key factor in its decision to set up its European operations there, especially since the US investment group was a major client.

"When we actually got there, we realized that we had an opportunity to create a financial and technology hub in the city starting with a few projects that we got from Citibank," said Bikash Mathur, Polaris's managing director, EMEA.

Others, including Japanese electronics conglomerate Fujitsu, have expanded their operations and some, like US technology company 3PAR, have set up research and development centers.

Agencies

(China Daily 05/07/2008 page16)