Northern Ireland's economy has been doing relatively well compared to other regions of the United Kingdom in the four years since the Belfast Agreement. Peace has brought its own dividend, which has gradually restored confidence and stimulated growth. But the North has a substantial deficit of physical and social infrastructure, built up during the Troubles. Its roads, water facilities, railways, health and education systems all require investment. As a result of the major initiative announced in Belfast yesterday by the British prime minister, Mr Blair and the chancellor, Mr Brown, the Executive now has the opportunity to tackle it.
Capital investment will be funded by a system of Treasury loans drawn down at low rates of interest. The Executive will have discretion over how much to borrow and invest, based on their willingness to raise requisite funds for repayments by such means as increasing water charges or rates on property. The money will be channelled through a Strategic Investment Body with a mandate to implement the programme. In addition to these funds it has been decided to make land held by the British armed forces available for economic development, including several notorious army bases and prison camps which will be demolished for this purpose.
This is a real vote of confidence in the peace process, which the First Minister, Mr Trimble, aptly described as beating swords into ploughshares. Mr Blair said "resources that were once tied up in guns and barbed wire can now help create social and economic wealth". He was quite right to insist that paramilitary activity must come completely to an end if the opportunities so created are to be fully availed of. The political timing of this announcement is calculated to bolster the Executive at a time of renewed uncertainty about paramilitary intentions.
Mr Brown pointed out that these decisions devolve more power to the North. For the first time the Executive will have real discretion over raising revenue and real room for manoeuvre on investment. It will also be free to decide on how public-private partnerships will operate. This is a flexible arrangement, which will be kick-started by the pledge of £200 million sterling announced yesterday for more immediate projects. Together with the recently announced tranche of European Union funds for cross-border schemes this package should boost confidence in the Northern Ireland economy and open up longer term perspectives for peaceful progress.