It's just a ride - the economic impact of perception
The vast majority of parades from this year’s 12th of July celebrations – moved to the 13th to avoid Sunday – passed off without any trouble.
That’s the reality, but reality isn’t really very important. When it comes to building a functioning Northern Irish economy (not rebuild, because there hasn’t ever been one) it is perception we need to worry about.
And the perception is that this place is crazy.
From an economic point of view, this causes problems both with tourism and potential foreign direct investment (FDI).
We live in a beautiful country traversable with a couple of hours’ driving. There are (not-too-steep) mountains, stunning lakelands, unique geology, more and more and more, while our diaspora is remarkably extensive.
In that context our tourism performance is disappointing. The absolute and relative performances, compared with the rest of the UK and Ireland, are not terrible, but this is an area where we should excel.
The potential impact on FDI is more worrying, because this is supposed to be the backbone of a Northern Irish economic revolution, hence the importance with which each of the five governmental parties view devolution of corporation tax.
Multinationals looking to invest in new territories take many factors into account. Low corporation tax can be an eye-catcher because firstly tax is a business cost and so reduced rates equate to savings, and secondly executives might also feel it indicates that local governance is pro-business.
However, lots of places have low tax rates, and other major factors include productivity and skills bases – areas where Northern Ireland is weak.
Therefore, we do not live in a place that will eclipse all competition for FDI and, when weighing up the options, our violence is an alarming burst of heat and light that will tend to scare off investors.
Of course, for the majority of Northern Ireland 12th of July violence is something they watch on the news, same as everywhere else around the world, and not something on their doorstep.
The fact any of the major multinational companies with an existing presence in Northern Ireland will not have been impacted by the events in Ardoyne are not what counts. The brand – which is just corporate speak for the perceptions of potential customers – has been damaged.
Look at the reasons behind the violence and it can feel like you’ve fallen down the rabbit hole and been snared by some logic trap.
Prosperity tends to bring peace along with it. NI’s lack of prosperity, particularly in working class communities and particularly since the Good Friday Agreement, therefore fosters some of this discontent.
But, as the violence hampers economic growth, this is self-reinforcing.
Then there are the social reasons for trouble, which are legion, but when looking specifically at flashpoints that garner news attention outside Northern Ireland we know that:
- Some people, who might call themselves loyalists, or members of the PUL community, or similar, are concerned that their culture is imperilled, and fear some creeping assault on their basic freedoms
- Residents adjacent to some marching routes believe the Orange Order and the bandsmen are agitators, clinging to a disappearing social superiority through majority rule, determined to keep the old fires burning
The reality is far more complicated – while there is antagonistic and provocative behaviour on what is commonly and dumbly referred to as “both sides”, this is not the whole picture – but that is for another time, because here we are taking about perception.
It’s just a ride
And that’s the problem. The perceptions of foreign people with cash to spend – be they businesspeople or those looking to travel – are shaped by violence which emerges from the perceptions of local people.
Though each of us, as individuals, should try our best to align the two, perception is not reality. Perceptions layered on top of other perceptions? It’s like a fairground ride.
The violence spins in a circle with economic negativity, one propelling the other which propels the first, and at the same time it lends itself to social perceptions which themselves lead to more violence (and less foreign investment, of any kind) which adds another layer onto the perceptions – a dreamlike flailing that peaks with bedlam spread across newspapers, television and the internet.
And, just like a fairground ride, there can be the illusion of progress through rapid, vacillating motion but ultimately all the whirling and twirling occurs on a finite closed loop. You get off where you got on – and you can keep paying up to travel the same route again and again:
There are plenty of other examples, but there’s no need to list them. We all know what the ride is like because we’ve all been on it.
It’s probably about time we got off the rollercaster. And perhaps, for good measure, smashed down the machine.
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