The British government tomorrow takes another step towards implementing its economic blueprint for Northern Ireland - Strategy 2010 - when it officially introduces the Economic Development Forum. But leading economists say the strategy lacks detail and direction.
The forum, itself a Strategy 2010 recommendation, will prioritise and implement the document's 10 targets and 62 recommendations. The North's economy minister, Mr John McFall, will chair the 16-member forum which represents government, business, trade union, farming and voluntary sectors.
The strategy was produced by a steering group of 12 leading industrialists in consultation with 300 people from the public and private sectors in March. It concentrates on education and training, research and development, information technology, transportation, energy and inward investment.
While economists have welcomed the strategy's vision, others such as the Northern Ireland Economic Council (NIEC), the Institute of Directors and the Economic and Social Research Institute in Dublin have called for wider consultation before it is implemented.
Ms Janet Trewsdale, NIEC chairwoman, said that while the document focused on the right areas, there were many missing links between its targets and recommendations.
"We recognise the strategy has captured the key drivers of economic growth. But we found very few indications in it on how these targets are going to be met nor on how they will be funded," she told The Irish Times.
The NIEC, an independent advisory body to the Northern Secretary on economic and social matters, published its own response document to Strategy 2010 in September. It singled out several targets which it said were unlikely to be met due to a "lack of clear qualitative and quantitative links".
Strategy 2010 aims to increase the North's per capita GDP from 80 per cent to 90 per cent relative to that of Britain by the year 2010. According to the NIEC, however, the document gives no indication on how this can be achieved.
"To reach the 90 per cent of UK GDP, productivity in Northern Ireland would have to grow 1 per cent to 1 1/2 per cent faster than in the rest of the UK, which presumably will itself be trying to improve its productivity," Ms Trewsdale said.
It was equally unclear how the envisaged reduction of long-term unemployment from 4 per cent to 2 per cent of the workforce and the increase in educational standards to NVQ level 4 (currently 23 per cent of the workforce; Strategy 2010's target is 35 per cent) were to be achieved, she added. "Those targets come from nowhere. They are going to be very expensive and will require ongoing funding. The questions `how' and `how much' keep cropping up."
A major recommendation is the introduction of a new low rate of corporate tax (currently at 30 per cent) to encourage foreign investment and help Northern Ireland compete with the Republic where the manufacturers' and financial services' rate is 10 per cent.
"This will be the most difficult proposal to implement. Not only will there be opposition from other UK regions, but most importantly, it will require a change in legislation," Ms Trewsdale said.
It was also based on the wrong assumption that money was always an investor's principal consideration, she added. "A large grant or even a reduction in corporate tax is no good to any company if it has not got the appropriate labour. One of the Republic's main assets, in my opinion more so than its low tax rate, is its young, highly skilled workforce."
Funding the strategy would require major changes in public expenditure and make conflicting demands on the existing budget, says the NIEC. "While the sale of the Port of Belfast will provide a one-off capital injection, many of the recommendations will require ongoing funding. One worries whether the costing has been done and thought through," Ms Trewsdale said.
Other concerns were the lack of prioritisation of targets and recommendations and the absence of analysis, she added. The envisaged targets had not been compared to what would happen if the situation remained unchanged and the effects of other strategies, such as the Labour government's New Deal policy, had not been taken into account.
According to a recent survey by Grant Thorton, 72 per cent of Northern Ireland companies were unaware of Strategy 2010; little more than 10 per cent have seen a copy of it. When contacted by The Irish Times, the chairman of the Confederation of British Industry, Mr Chris Gibson, who is also a member of the strategy's steering group as well as of the new forum, said: "In terms of promotion, we weren't as quick off the mark as we could have been."
To counter much of the criticism, a day-long roundtable conference, organised by the Northern Ireland Economic Research Centre, takes place in Belfast on November 18th.
