Derry and Donegal are like conjoined twins, bound together by economic, social and cultural links. Policy-makers seeking to improve the economy and quality of life in one must do so jointly with the other. Derry was, in effect, the capital city of the North West region before partition and it remains so today, despite the border.
The economic statistics tell the story. Workers in Derry have the North’s lowest disposable income. Donegal is the same in the Republic. Derry has the lowest employment rate in the North, Donegal the second lowest in the South. Derry and Donegal each has the highest percentage of residents with no, or low, educational qualifications in their respective jurisdictions. It is a similar story as you go down the economic stats.
There are signs that politicians are recognising the need for this challenging duality in decision-making. The Irish government is providing €44.5m (£37.3m) in capital funding for Ulster University’s new teaching and research facilities in Derry. That was a commitment triggered by the New Decade New Approach agreement that was signed-off jointly by the British and Irish governmentg and the Northern Ireland parties at the beginning of 2020, leading to a (temporary) resumption of Stormont.
And all governments and parties are committed to improving road connections in the West. Ireland’s Shared Island initiative has allocated €600m towards the A5 North-West transport corridor, linking Derry and Strabane to Aughnacloy, but this is allied to improvements to the N2 beyond Aughnacloy into Dublin, and also improvements to the spur roads from Strabane to Lifford and Letterkenny. It illustrates how what is good for Derry is also good for Donegal and vice versa.
This reality can also be seen in the car parks of the big employers. Vertiv (formerly E&I) is a major employer in the small Donegal village of Burnfoot, close to the Derry border from where large numbers of workers travel every day. Going in the other direction are many employees of Seagate, which is just inside Northern Ireland.
Despite this, more could be done – and needs to be done – to provide a functioning cross-border labour market. This applies as much to Newry and Dundalk, as it does to Derry and Donegal. For employers, the biggest grievance is the incompatibility of rules between the two jurisdictions in terms of tax, benefits and pensions. There are also serious difficulties for employees crossing the border for work who are not Irish or British nationals and who do not have post-Brexit UK settled status.
If you look at how cross-border labour markets work elsewhere in the world – as I did last year for a study for the Holywell Trust charity – then you find examples of how others support cross-border linkage. One key element is strong transport connectivity – not just roads, but also bus and rail links.
Another strength can be cross-border skills planning, including developing the right undergraduate and vocational courses that employers in the region need. With the benefit of hindsight, it is surprising that skills development and the planning of higher and further education was not a topic for one of the cross-border agencies established by the Good Friday Agreement.
Skills development needs to be a priority along the border region, on both sides. A recent Irish government report pointed to below average productivity levels along the border within the Republic, which is at similar levels to that of Northern Ireland – substantially lagging average levels in the South.
In terms of the North West, there is far too little partnership between Invest NI and IDA Ireland, despite the reality of a cross-border travel to work area. Incompatible data across the two jurisdictions is one difficulty. But, historically at least, the agencies have also been constrained by the physical border being mirrored by a border psychology.
Internationally, cross-border co-operation often goes much further, including joint environmental management of adjoining areas and even shared physical infrastructure, such as electricity, telecoms, water supplies and sewerage.
These are all challenges that can be overcome with political will. There are already an assessed 10,541 daily journeys North to South for work and 7,777 South to North work journeys. Together with journeys for university, college and school study, there are at least 30,000 people commuting daily across the border, along its entire length.
And the size of the all-island economy has expanded rapidly following Brexit – sales of goods from the North to the South grew by 17.6% in 2023, and those in services by 25.9%. The sale of goods and services to Great Britain remains significantly larger and also rose in 2023, though at a lower rate.
Growth of the cross-border economy need not be seen as significant within the constitutional debate – Ulster Unionist politicians welcomed the Holywell Trust report. Both CBI Northern Ireland and IBEC have stated that economic links both East-West and North-South need to be strengthened for the good of the Northern Irish economy. And in many places along the border, not just in Derry, connections are stronger cross-border than they are with Belfast.
Recognising and strengthening cross-border connectivity is central to the aims of the Good Friday Agreement. Supporting it is a sign of political maturity, putting more of the past behind us. What should be astonishing is, 27 years after the Good Friday Agreement, that our society has not focused a lot more on it.