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Politicians Need to Face Up to Harsh Economic Realities

11 January 2011

A leading economist has claimed that Northern Ireland politicians are more interested in pleasing the electorate than facing up to harsh economic realities.

Mr Michael Smyth, who is head of the University of Ulster’s School of Economics, says that although the NI economy is lagging behind the rest of the UK, politicians here are reluctant to make decisions that will cost them votes.

Mr Smyth has just been appointed a member of the Advisory Board of Eurostat – the statistical office of the European Union whose task is to provide the EU with statistics to enable comparisons between countries and regions. The statistical data is used to help define EU policy, but Mr Smyth says, it is important that good use is made of all the available information.

“Decisions makers at all levels – from EU commission to local government - need reliable and objective statistics to make informed decisions but sometimes, particularly in the run up to elections, the heart is allowed to rule the head and decisions are taken for the wrong reasons.

“For example the Westminster Coalition government is making unpopular decisions about university funding but our MLAs are so desperately trying to appease the electorate that they are not ready yet to debate the real issues such as education, immigration, emigration, inward investment, better hospitals.

“Politicians here backed down from the introduction of water charges but if water charges had been introduced in Northern Ireland, some of the public spending cuts now having to be proposed could have been avoided. The sooner Northern Ireland politicians move on to debate real issues, the better.”

Mr Smyth’s appointment to Eurostat is for a period of five years.

Eurostat made the headlines last year when Greece’s economy was thrown into crises. At the time Eurostat highlighted concerns about quality of the data coming from the Greek government and the country’s budget deficit subsequently had to be revised upwards.

Looking ahead, Mr Smyth expects Northern Ireland’s GDP to drop by between 0.5 to 1% but he adds a note of caution for anyone interpreting statistical data: “GDP on its own is a fairly crude quantitative measure of how well a country is doing. To get a better  picture of a a true reflection of the country’s true state of health, the GDP figure needs to be balanced with qualitative data about happiness and well being.”

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