Economics: In the drive to re-establish devolution in Northern Ireland, the goal of solving its economy seems to have only a residual significance. But the North's economy is a proverbial rug that, if removed from the peace process, could bring it crashing down.
In terms of its future, it's a case of "It's the economy, stupid". By restoring the primacy of the private sector there and creating an all-island economy, the North's politicians could create a form of unity that secures peace, threatens no-one and benefits everyone. Three out of every five pounds spent in its economy comes ultimately from government. This has insulated the growth rate from the swings of an economic cycle. The subvention, and the large public sector it supports, is skewing the North's economy.
Well-paid public sector jobs draw talented young people away from private sector work that is productive in the long run.
Generous disability allowances disguise the real level of unemployment and are a disincentive to effort. Government initiatives are stimulating the construction of retail and leisure industries that merely recycle the subvention rather than reduce the dependence on it.
Thankfully, someone is ringing the alarm bell. Last November the Business Group - a group of leading business people and academics in Northern Ireland chaired by former Ulster Bank head Sir George Quigley - came up with a blueprint for the North's development. Like the Whitaker report on the Republic's economy in 1957, it is a clarion call for action.
Unlike the Whitaker report, there is not yet a Seán Lemass to push it through. This is because, due to subvention, things are not desperate enough for people to see the need for action and also because of anachronistic attitudes among some of the North's political leaders.
The Business Group's recommendations, which have been presented to Northern Secretary Peter Hain, call, firstly, for corporation tax to be cut to 12.5 per cent to attract foreign direct investment. Invest Northern Ireland - the North's equivalent of the IDA - has long envied our low system of corporation tax.
Secondly, the group recommends that direct academic research activity be focused firmly on economic regeneration. Thirdly, it calls for the creation of a centre to help companies track worldwide technology developments and, fourthly, it proposes strengthening links between economic development and education policies.
The group's report was presented to Hain and, in theory, political conditions for its acceptance couldn't be better. Not only are preparations to restore the assembly well under way, but British chancellor Gordon Brown has decided that the £5 billion (€7.2 billion) subvention going into the North's economy each year must end. Scots Presbyterian that he is, Brown believes that the people of Northern Ireland must pay their way. He is right.
Unfortunately, Brown's treasury is proving an obstacle. Cut corporation tax to 12.5 per cent, say his mandarins, and before you know it the Welsh and the Scots will want the same. Foreign direct investment will be drawn to Northern Ireland and away from Wales and Scotland whose leaders will then demand the same thing. If it accedes to the Welsh and the Scots, every impoverished region in England will start moaning.
Michael Smyth, professor of economics at the University of Ulster, disputes that such a move would have a significant negative effect on Wales or Scotland.
Compared to its impact on the North's employment situation and future economic prospects, the size of any foreign direct investment diverted towards it would be quite small. But he accepts that the treasury is determined to fight any break-up in the UK's homogeneous system of corporation tax.
While bureaucratically correct, the treasury's position is bad not only for Northern Ireland but also for Britain. It is an irony that Margaret Thatcher - the most unionist prime minister since Balfour - smashed the unity of her country's economy by the regional insensitivity with which she reformed the UK economy. As a result, Scotland and Wales, and probably the north of England, could badly do with a dose of fiscal autonomy to draw economic activity away from an increasingly congested south of England.
The treasury's position is also contradictory. Not since the Battle of the Somme has there been such unity between Irish and British opinion as there is now over the issue of tax harmonisation. So why is the British government wedded to rates of corporation tax that would bring cheer to any French dirigiste?
Although wrong, the Sir Humphreys of Whitehall will prevail over the issue of a low corporation tax for the North.
But Smyth is confident that the same effect can be achieved synthetically, by allowing generous tax credits for research and development and capital spending.
However it's achieved, a friendlier corporation tax regime will complement the relative competitiveness of its cost base to make the North a very attractive place to be. Some foreign direct investment may be diverted north from the Republic. But at least it will stay in Ireland. It won't be enough, of course.
Devolution must bring with it devolved government departments, so that policies in the areas of transport, telecommunications, energy and water can be co-ordinated to create a common low-cost platform for business across the island.
Finally, social partnership may be losing credibility in the Republic, but if it is to deal with its biggest challenge of all - reducing the relative size of its public sector - Northern Ireland will need a strong partnership mechanism, representing private and public sectors, to ensure that the privatisation of its economy has no negative ramifications for the peace process.
If it can be done, the North's lower cost base and good business culture will be a boon to the Republic If it can be done, NCB's 2020 vision may not turn out to be a pipe dream after all.
