The reality of lagging regions

Notes from the Western Periphery

Notes from the Western Periphery
John Bradley

Back in the early years of the new millennium I gave a lecture in Bucharest in advance of Romania joining the EU. During my lecture I compared Romania to the economies of Ireland, Portugal, Spain and Greece, the original group of less-developed EU states. Without much reflection, I described the Romanian economy as ‘peripheral’ to the EU economy and seriously ‘lagging’ the EU in terms of development and income per head. The internal regional disparities in Romania were even more startling.
These terms came naturally to an Irish economist, since we had embraced our national peripherality and underdevelopment in order to attract massive Structural Fund aid from the European Commission (EC). Dare I suggest that we considered that our national underdevelopment was not due to lack of effort on our part, but had deep historical origins in our experience of colonial oppression?
I was shocked when the terms I used to describe Romania were greeted with great hostility. The Romanian audience of senior policymakers was horrified. They saw Romania as being at the very centre of Europe and terms like ‘underdeveloped’ made them very uncomfortable. ‘Lagging’ for them was not a technical description of low GDP per head that could be rectified over time with assistance and improved policies. It was a very visible stigma of national failure and inability to prosper.
As I read the article by Keith Duggan in The Irish Times on November 5 (‘Are our North and West really ‘lagging’?’), I was reminded of my Romanian experience. To citizens of the North and West region (eight counties, including Cavan, curiously omitted from the Irish Times article), the downgrading of the region from ‘Transition’ (ie, GDP per head between 75 and 100 percent of the EU average) to ‘Lagging’ (GDP per head below 75 percent) did not come as any surprise. It was greeted by stoicism by the people and by the usual hollow calls that ‘something should be done about this’ – the default posture of our local politicians.

In denial
The way in which the national media treat regions can be very revealing. In terms of economic structure and performance they make little effort to identify the underlying factors that brought about the descent from ‘transition’ to ‘lagging’ status in the North and West. Indeed, the title of Mr Duggan’s article (posed as a question) might prompt the thought that emphasis on lagging might just be a rural opportunistic ploy (an béal bocht) to extract undeserved funds from Dublin.
How did the Irish Times article demonstrate this? First, it consisted of a series of interviews with creative, entrepreneurial and dynamic people who are running successful small enterprises in the North and West. The subliminal implication, never made explicit, is that the North and West region is doing fine, thank you, if you work hard enough.
But the reality is that the region sustains too few of these enterprises. It could sustain far more if a proper strategic development plan were implemented to address the many factors that make it hard for enterprises to prosper in the part of this island that lies northwest of a line drawn from Dublin to Galway. There, policy degenerates into palliative care and rural community support that hold out little prospect of any radical change because the potential drivers of that change have never been correctly identified.
In the article, the Ballaghaderreen-based Western Development Commission economist Luke McGrath went so far as to suggest that since the North and West region was newly set up, ‘it is the first time this region has been classified. So it is not technically a downgrade’.
Of course, the reality is that the classification of Irish regions has always been treated in a careless and cavalier fashion since the foundation of the State. The latest arrangement, based on a three-way division of Ireland into Northern and Western, Southern, and Eastern and Midlands has no joined-up social or economic logic and no effective regional governance structures. One is driven to the conclusion that regional ambiguity and confusion may suit our national Government since it makes it difficult for the EC to evaluate properly the country’s demands for more national development aid.

Cruel distortion
But what about the Northern and Western Regional Assembly? It would be unfair to blame the NWRA for presiding over a complete shambles of regional development strategy. After all, it was set up as the regional custodian of national policy, given a tiny budget and almost no executive powers. That may be the reason why the Irish Times article failed to mention it at all. In terms of real, effective regional development actions, perhaps the NWRA was considered irrelevant.
The most disturbing contribution to the article was by Paul Hannigan, head of the Letterkenny ATU campus. Mirroring my Romanian experience, Mr Hannigan fretted that the North and West region is ‘stuck with the unwanted stamp of EU lagging region’. He goes on the say that he is annoyed with the EC and that ‘there is a lot more positivity than is recognised in a term like lagging region’. Most extraordinarily, he states that: ‘The county (Donegal?) doesn’t get credit for the people who left and do not come back’.
So what can we conclude? The North and West region is not a prisoner of geography, hidden behind an impassable mountain range. It is a prisoner of history, hidden in plain sight of the prosperous East and South. It is a region that was cruelly distorted by centuries of disruptive history that has left many peripheral communities in its train still locked out of modern development opportunities. So it’s time to drop the denial and to get serious about regional development.

John Bradley was a professor at the ESRI and has published on the island economy of Ireland, EU development policy, industrial strategy and economic modelling.