May 2 (Bloomberg) -- Robert Ireland and John Bryars are from opposite sides of the 40-foot concrete walls that still embody the sectarian divide in Belfast. Fifteen years after a peace agreement was supposed to replace violence with prosperity, they are united only by unemployment.
“This is the toughest time I can remember for work,” said Ireland, 30, browsing job postings at a center in Whiterock, a predominantly Catholic district of west Belfast where one in five men of working age has no employment. “Things haven’t changed. It’s still hard for people, maybe harder.”
While the swelling ranks of jobless Spaniards and Greeks have become an emblem of Europe’s economic crisis, few cities are struggling more than Belfast after a post-conflict revival was snuffed out as quickly as it came.
The Good Friday Agreement in April 1998 ended three decades of bombs and shootings between mainly Catholic republicans seeking a united Ireland and Protestant unionists loyal to the U.K. As well as leaving 3,500 people dead, the “Troubles” made Northern Ireland more dependent on public spending, both for jobs and welfare, than any U.K. region. As money dried up, so did the employment prospects for people like Ireland and Bryars.
“People wanted peace but they didn’t realize it would take more than that to deliver jobs,” Bryars, 47, whose friend’s parents were killed by a republican bomb in the 1970s, said in a center for the jobless in Sandy Row, a loyalist area. “Nobody expected the big recession to happen. Nobody was prepared.”
Return to 1990s
After falling to a 30-year low following the accord, the unemployment rate is now back where it was and as high as 27 percent for males in some Belfast neighborhoods, levels last seen before the peace process began.
Northern Ireland’s economy grew by almost 70 percent in the decade after the Irish Republican Army declared a cease-fire in 1997, according to figures compiled by the region’s government. The boom, like in Ireland to the south, was driven by the building of houses, apartments and offices, services such as retailers and call centers that arrived in the late 1990s.
Since then, companies including Seagate Technology Inc., the world’s largest disk-drive maker, scaled back operations in Northern Ireland. The company shut a components plant in September 2008, resulting in the loss of more than 900 jobs. It added 85 research jobs elsewhere in the province in 2010.
FG Wilson, a unit of Caterpillar Inc., announced plans last year to eliminate 800 jobs at its engineering plant outside Belfast. As the housing bubble burst, construction companies such as Belfast-based Taggart Holdings, which employed more than 150 people during the boom, went out of business.
Between 2005 and 2008, home prices almost doubled. Then they dropped by about 50 percent.
The region has a higher proportion of empty stores than anywhere in the U.K., with a 21 percent vacancy rate, or twice the national average, according to Glyn Roberts, who heads the Northern Ireland Independent Retail Traders Association. In Belfast, one in four retail units is empty, Roberts said.
“There doesn’t seem to be any light at the end of the tunnel,” said Sinton McKeown, 50, who runs a newspaper store down the road from Belfast City Hall. “The office block beside me closed. People don’t have the money to spend and so many have lost their jobs that during the week it is much quieter.”
McKeown said he employed 22 people in his two stores before the economy took a dive again and he reduced staff by 10.
Belfast was a “buzzing” place from the late 1990s until the financial crisis of 2008, McKeown said. “There were shoppers, tourists, construction workers. In the morning, there was a queue outside the shop.”
About 27 percent of the population is defined as economically inactive, or without a job and not looking for one, labor statistics show. Although still officially at 8.4 percent, joblessness is increasing at the fastest pace in the U.K.
“While the local labor market has been particularly impacted by the downturn, there are some signs of stability,” said Arlene Foster, Northern Ireland’s minister for enterprise, who this week announced 55 new jobs at a marketing company. “Our aim must be to build a business environment that is attractive to both local and inward investors.”
Among people with jobs, more of them depend on the government for a paycheck than anywhere else just as Prime Minister David Cameron implements some of Europe’s toughest austerity. There will be 130 billion pounds ($202 billion) of spending cuts and tax increases by the 2015-2016 financial year, based on estimates from the Treasury in London.
“We have always been the U.K.’s Achilles’ heel,” said Angela McGowan, an economist in Belfast at Danske Bank A/S, which bought a lender based in the city in 2004. “There are no big solutions coming through, no silver bullets.”
That’s evident in Belfast. A two-hour drive north from where the Group of Eight industrialized countries will have their annual meeting in June, the city’s population of 280,000 remains divided and tit-for-tat violence among dissident groups has returned over the past two years.
So-called peace walls made from concrete topped with corrugated iron remain in areas of the city where Catholics and Protestants live side by side. Irish tricolor flags fly on the Catholic side with the red, white and blue Union Jacks fluttering on the other.
In west Belfast, where support for the IRA was staunchest during the Troubles, murals of armed fighters still adorn gable walls. In Protestant east Belfast, depictions of masked and armed men sit beside slogans saying “Ulster is British.”
Robert Ireland has lived in Turf Lodge, a republican housing estate in west Belfast, all his life, and previously worked as an orderly in a hospital. He remembers watching the Good Friday Agreement on television when he was about 14.
“I’ve never hung around with Protestants much,” he said last week at the center for the area’s unemployed. “It’s just the way it was growing up. I was used to seeing British soldiers walking around the place and now you don’t see that. In terms of people having money and work, things haven’t changed much.”
Ireland said he has sent dozens of job applications and heard nothing back.
Belfast used to be an industrial hub. Harland & Wolff, which built the Titanic liner, was supplemented by employers such as Shorts, now a unit of Bombardier Inc. At its peak in the 1950s, the shipyard employed 35,000 people, more than a 10th of the city, before orders dried up. It finally closed in 2000, with Harland & Wolff now repairing vessels in Belfast and making equipment for the offshore energy industry.
Then, as the U.K.’s industrial decline deepened in the 1960s, Northern Ireland entered an even greater crisis for its economy. In 1969, the “Troubles” began as joblessness, particularly in the Catholic community, proliferated.
As part of its “commercial war” against Britain, the IRA bombed Belfast city center, which by the 1970s had become accustomed to explosions and sniper gunfire as republicans and loyalists fought turf battles over the increasingly black economy as well as the future of Ulster.
The conflict helped push the unemployment rate to almost 18 percent by the early 1980s, according to statistics from the Department of Enterprise Trade and Investment. The Good Friday Agreement aimed to reverse that with “policies for sustained economic growth and stability in Northern Ireland.”
For a time, it worked and things picked up. Further efforts were made to rejuvenate the city’s landscape and revive the economy as the semi-autonomous government reconvened in May 2007, when unionist leader Ian Paisley agreed to share power with Martin McGuinness, a former IRA leader.
The Titanic Quarter, a 650,000 square-feet dockside development, opened a visitor center last year dedicated to the ill-fated ocean liner built in Belfast. It attracted 800,000 visitors in its first year. Plans to develop the quarter as a European financial hub have been less successful, with New York-based Citigroup Inc. as the only banking tenant.
Belfast has been affected by the economic collapse to the south. The Republic of Ireland, which gained independence from the U.K. in 1922 as Ulster remained under the British government, was forced to seek an international bailout in 2010 as a property bubble burst and crippled its banks.
John Bryars said he’s been jobless for 18 months after the funding ran out at the local community project where he worked.
“The politicians don’t understand that it’s the people at the bottom that are suffering,” he said. “I’m glad peace is here, I had friends killed in the Troubles, but the agreement hasn’t delivered for people on the ground with prosperity.”
Marion Beattie, 51, a Protestant from Shankill Road, a street that became synonymous with the Troubles in the 1970s, volunteers at a church-run café on one of Belfast’s peace lines simply to avoid the boredom of being at home, she said.
Out of work for two years after losing her position as an auxiliary nurse, Beattie partly blames the influx of foreign workers as the economy temporarily picked up.
“During the troubles, there were no foreign workers here so it was easier in some ways,” she said. “I’m fed up with how things have been for me and for a lot of other people, but I’m still confident I’ll get a job.”
The economic malaise is raising sectarian tensions. A decision in December by Belfast city hall to stop flying the Union flag everyday sparked three months of protests, which saw loyalists blocking roads and rioting with police.
For some, violence was all they ever knew and jobs are key to ensuring the province doesn’t return to the Troubles.
Paul Hamilton, an ex-IRA prisoner, was working at the community center frequented by Robert Ireland. He had joined the republican paramilitary group before he left school and was convicted by the time he was 18 years old.
“When the IRA announced their campaign was over, it felt like my life was over,” Hamilton said in a room in the center. “The Good Friday Agreement has been really positive, but of course the recession has taken the gloss off some things. It’s made life tougher for everybody.”
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