Regions cannot be left behind in drive for growth

In last year’s general election much was made of the disparities in regional economic activity, writes Jim Power.
Regions cannot be left behind in drive for growth

Many argued that the recovery story was a story for the Greater Dublin Area and bore little relationship to what was going on in the rest of the county. I remember less than three years ago, being verbally savaged at a conference in Cavan when I suggested that Ireland was starting to experience an economic recovery.

My attacker argued that the story I was telling was a Dublin-centric story and did not reflect what was going on in the rural parts of the country. He was correct, but on the other hand what did he expect?

The nature of economic activity and growth is that it tends to be concentrated in the centres of population and it was inevitable that when the Irish recovery started to kick in, particularly after such a spectacular crash, it would be driven by the Greater Dublin Area and that over time it would spread to the regions in some fashion.

Reflecting the view of the regions, the programme for government that formed the basis for our current administration contained a lot of policy initiatives aimed at spreading the fruits of the recovery around the country.

Late last year, the Government published a report titled ‘Realising our Rural Potential – Action Plan for Rural Development’. This plan sought to address the challenges posed by “the decline of rural industries and associated job losses, emigration of many of our young people, and poor connectivity in terms of transport and telecommunications infrastructure.”

The aim of the plan is to focus on the positive attributes that rural Ireland has to offer and “unlock the potential of rural Ireland through a framework of supports at national and local level”.

The definition of success would be to ensure that “people who live in rural areas have increased opportunities for employment locally, and access to public services and social networks that support a high quality of life”.

The plan contained five pillars - Supporting Sustainable Communities; Supporting Enterprise and Employment; Maximising the Rural Tourism and Recreational Potential; Fostering Culture and Creativity in rural communities; and Improving Rural Infrastructure and Connectivity.

Some argue that the focus should be on the Greater Dublin area and that people from the rural areas should just move to where the action is. I disagree on a number of fronts. Socially and economically it is not acceptable that rural Ireland should be allowed become denuded of young people and economic vibrancy.

Furthermore, if economic activity continues to be concentrated in certain areas, then inevitably those areas will become congested and the cost of living and the costs of doing business will rise in a damaging way.

Having said all of that, there are strong indications that the recovery is gaining momentum around the country, but there are still imbalances. The CSO released data this week showing regional incomes and regional economic activity. Although the data refer to 2014, they continue to show disparities but they are showing signs of narrowing.

Figures for Gross Value Added (GVA) which is a measure of economic activity, show that Dublin accounts for 45% of Irish economic activity. Clearly, the strong multinational presence in Dublin and the south-west distorts the measure.

If we look at disposable incomes per head of population the gap is narrower, with Dublin 14.6% above the national average and the border region 13.7% below.

More up-to-date data on labour market performance shows that at the end of last year, the national unemployment rate averaged 6.7%, but the mid-east was the lowest at 5.3% and the south-east was highest at 9.4%. The bottom line is that policymakers need to deliver on regional development policies.

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