Dr. Tom Healy:

I thank the committee for the invitation. As the committee will be aware, the Nevin Economic Research Institute, NERI, is organised on an all-island basis and reflects the support we receive from trade unions across the island of Ireland and the Irish Congress of Trade Unions. It seems to us that the area of research on the cross-Border or all-island dimension of both economies is a vital area that has perhaps been neglected in the last ten or 20 years.

Paradoxically, it may also be connected to the peace process because aspects of cross-Border co-operation became more normal and the saliency of addressing particular issues on an all-island basis became less evident. At a professional level, it seems that cross-Border exchanges among economists and analysts is not what it could be. There was more professional engagement at various levels 20 years ago. I wished to make this point at the outset because it is also welcome that various bodies, including the Centre for Cross Border Studies, which has existed for many years and, more recently, the management school in Queen's University Belfast, have engaged more with this aspect of the all-island economy. However, much remains to be done. We are joined today by other research colleagues who have been working in this area for many years.

One of the benefits of focusing on the all-island economy is that it identifies how we fit into a global economy as a small, open, regional economy with significant exposure to international events and patterns of trade and investment. However, the extent of exchange trade between the Republic and Northern Ireland is still limited, for example, in manufacturing goods and exports. I am aware that the committee received a presentation from InterTradeIreland. We estimate that the value of merchandise goods exports from South to North does not exceed 2.1% of the total in recent years. This percentage has decreased a little since 1996. There has been a modest upward trend in cross-Border trade since 2009, but it is limited in terms of merchandise goods. Unfortunately, we have less insight into trade in services. Tourism has developed and grown, more so in the direction of North to South. There are still barriers of one sort or another, established paths of dependence and habits of exchange and trade that mean that there are untapped opportunities.

The energy market is more organised as an all-island reality, but there are still major opportunities. I wish to mention the importance of investment in natural resources and renewable energy and the opportunity to develop further critical investment in these areas. As an island and taking both economies together, we are exposed and vulnerable to international shocks in the price of energy and the supply of fossil fuel imports. We need to reduce our dependence over time. This calls for strategic investment in new forms of energy supply. As a country and island, we have considerable resources in our oceans and wind compared with other parts of Europe. These should be developed.

Regarding the possible value of oil and gas explorations off the coast, the collapse in crude oil prices represents a problem. None the less, a suggestion that is worth exploring further in the long term is that we should re-examine the terms and conditions applied to oil and gas exploration. It may be possible to channel some of the economic benefits and tax revenues, if there are commercial finds, into some kind of fund that could be organised on an all-island basis so as to invest in the areas that I mentioned. This would require long-term, courageous, strategic thinking that takes us beyond the limited scale, such as it is, of cross-Border co-operation.