Every crisis presents an opportunity
I’ ve recently welcomed guests from Newport, Rhode Island to Cork and been welcomed to the Jiangsu Province of the People’s Republic of China — all in efforts to bolster County Cork’s standing internationally. Partnerships with other regions are a great asset to Cork but, sometimes, our presence on the international stage leaves us open to tough situations. The failure to date of the Brexit negotiations, I think, is worrying for Cork.
Cork has long prided itself on its food and tourism offerings, two of the area’s most likely to be affected by a no-deal Brexit. Currently, agricultural products from Cork have a huge market in the UK. If tariffs are imposed on these exports, our goods could be priced out of this crucial market. Cork producers have achieved amazing work in building their market in Britain but, unfortunately, this leaves them particularly vulnerable in the instance of a no-deal Brexit.
In the context of a nodeal Brexit, these products will struggle with no obvious other markets for them. A study carried out between the Department of Finance and the ESRI found a hard Brexit, with tariffs imposed on goods and services going in and out of the UK, would shrink Ireland’s economy by 3.8%, unemployment would rise by 1.9% and average wages would fall by 3.6%. In a soft Brexit scenario, where Britain remains part of the European Economic Area as Norway is now, the economy would contract by 2.3% and unemployment would rise by 1.2%.
Figures from Teagasc show total Irish merchandise exports in 2014 were valued at €92bn, of which almost €13.6bn were exports to the UK. Irish agri-food exports to the UK make up approximately one-third of the country’s total merchandise exports to the UK.
And that’s in the form of beef, dairy products and processed foods. Teagasc has estimated that Brexit could mean a reduction in the value of Irish agri-food exports of anything from €150m (1.5%) to €800m (7.2%) per annum. Much of this loss could be to County Cork.
The Governor of the Central Bank has said that Brexit will be negative for Ireland’s economy; however, Ireland as a global financial centre will grow as a result of Britain leaving the bloc. Fifteen of the world’s top 20 banks now have operations in Ireland as fallout from Brexit continues. More than a dozen London-based firms have already agreed to set up or expand in Ireland due to losing their EU financial services pas sporting rights.
Unfortunately, County Cork has barely benefitted from this. Parts of the IDA seem to favour Dublin and with some good reasons. We need to accelerate office supply in County Cork.
We have so much to offer foreign investors in terms of a strong workforce, quality of life and a low cost of doing business – our challenge is getting this message out to the world. Our food and tourism industry could play a big part in this strategy if we play our cards right.
On the tourism side, we already saw less British tourists this year because of currency and costs here. With the change in Vat in the budget for the hospitality sector, we could see lower numbers yet. Hopefully, initiatives to enhance our tourism offerings and expand our target market to nonnative English speakers will offset some of this loss, but we cannot be complacent.
The National Budget for 2019 was overshadowed by Brexit which has been described as the crisis of this generation. In the budget, measures for Brexit took up a lot of potential spending. Cork needs to be prioritised for the new €300 million Future Growth Loan Scheme for SMEs and the agriculture and food sector, the €110 million for Brexit targeted measures, and the €60 million in current and capital Brexit related supports to improve resilience in the farm sector.
Every crisis presents an opportunity, and we need to take everyone we can – locally, nationally and internationally. I believe if the people of Cork are anything, we are resilient.