Prime Minister Lloyd George and Colonial Secretary Winston Churchill retained Northern Ireland for all kinds of reasons, not least because the British Empire was disgusted by the idea of full capitulation to the likes of Michael Collins and other Irish nationalists, whatever the Americans said. But economics also played a key part.
Back then, Belfast was the ship-building capital of the world and manufactured goods accounted for two-thirds of Northern Ireland’s exports. The South was an agricultural backwater.
Shipbuilding has since declined, of course, and what is now the Republic of Ireland has forged ahead, building an economy boasting a far higher per capita income than its Northern neighbour.
The Republic’s GDP per head is famously skewed upwards by the relocation of numerous multinationals, attracted by low rates of corporation tax. But even allowing for that, the south is now very significantly wealthier per head than both Northern Ireland and the UK as a whole.
Having said that, spending much of last week in Northern Ireland reminded me how much commercial progress has been made, particularly since the 1998 Belfast-Good Friday Agreement.
That landmark power-sharing accord didn’t end paramilitary violence, of course. Just four months after it was signed, dissident republicans killed 29 people in Omagh – the worst single death toll of any bombing since the “Troubles” began in the late 1960s.
Yet it was still a game-changer and since 1998, Northern Ireland has attracted investment from over 1,100 global corporations, drawn by lower rents and operating costs than the rest of the UK and a relatively young and skilled workforce.
Today, North Ireland’s commerce is focused on financial services, and relatively high-tech manufacturing, as well as construction, agriculture and hospitality. Driven by the research prowess of Queen’s Belfast and Ulster University, there are thriving life and medical science sectors, as well as valuable IT niches, not least cyber-security.