SCENESETTER FOR ST PATRICK'S DAY VISIT BY NORTHERN IRELAND'S

C O N F I D E N T I A L BELFAST 000021 NOFORN EUR FOR WE; NSC FOR SHERWOOD-RANDALL E.O. 12958: DECL: 3/12/2019 TAGS: PREL PGOV PTER ECON EINV UK EI SUBJECT: SCENESETTER FOR ST PATRICK'S DAY VISIT BY NORTHERN IRELAND'S FIRST MINISTER AND DEPUTY FIRST MINISTER CLASSIFIED BY: Henry Bisharat, Acting Consul General , US Consulate Belfast. REASON: 1.4 (b),(d) ¶1. (C/NF) The visit to Washington by First Minister Peter Robinson and Deputy First Minister Martin McGuinness comes on the heels of recent attacks by dissident republicans which have left two soldiers and one police officer dead. This visit will allow senior U.S. officials to express their sympathy and solidarity with Robinson and McGuinness and to publicly praise the people of Northern Ireland for the cross-community rejection of this recent violence. It will also provide an opportunity to praise Robinson and McGuinnes for their work together in a power-sharing government and progress in moving towards devolution of policing and justice. Both the Democratic Unionist Party (DUP) and Sinn Fein, as well as all the other main political parties, have appreciated the work of the several Special Envoys during the past decade and their help in moving the peace process forward. We expect both the First Minister and Deputy First Minister to press for the naming of a new envoy to assist with remaining political issues, particularly devolution of policing, as well as to help promote U.S. investment. Robinson and McGuinness planned to focus their visit to the U.S. on promoting investment. However, the recent attacks have overshadowed their plans, and their departure for the U.S. was twice delayed due to the attacks. Despite the global economic downtown, Northern Ireland officials believe their region remains an attractive base for U.S. investors due in part to its skilled workforce. Northern Ireland's economy should fare better than the rest of the UK during the economic downturn. The weak British pound has helped increase tourism and retail shopping, especially in border areas. Dissident Republic Activity -------------- ¶2. (C/NF) Northern Ireland's threat level was increased to "severe" from "substantial" in early March, just days before two soldiers and one police officer were killed by dissident republicans. In the days before the attack, Chief Constable of Northern Ireland Sir Hugh Orde termed the threat posed by dissident republicans as the highest in his seven years on the job. During the past year, dissident republicans primarily targeted police officers, in part because the new Police Service of Northern Ireland (PSNI) has been successful in attracting candidates from the nationalist community and become the public face of post-Good Friday Northern Ireland. The discovery of a 300-pound car bomb in January increased concerns and led directly to the increased threat level. In order to enhance the police's ability to monitor dissident activities, Orde announced March 6 that he had requested the assistance of a small number of military intelligence specialists. Due to inaccurate media reports of what this meant, Sinn Fein leaders protested strongly. Sinn Fein does not like the publicity given to dissident threats and activities, as it implies they are unable to control their community. That said, dissident groups are very small in number (probably no more than a few hundred, of which 60-80 are prepared to carry out attacks according to security sources in the UK media),have no significant political support, and are viewed as criminals within the Republican community. On March 11, throughout Northern Ireland, thousands participated in silent protests against the killing of security personnel. ¶3. (C/NF) First Minister Robinson has received praise for his handling of the dissident attacks, particularly for his statesmanlike calls for loyalist paramilitaries not to commit retaliatory attacks. While Sinn Fein was initially criticized for its delay in condemning the attack on soldiers (its first statement was not released until 14 hours the attacks),Deputy First Minister McGuinness drew universal praise for his actions in the aftermath of the policeman's shooting. McGuinness, a former IRA leader, joined Robinson on March 10 in visiting the murdered policeman's widow and made a statement -- while standing alongside Robinson and Chief Constable Orde -- that those involved in the killing were "traitors to the Republican cause," a characterization which was unprecedented. McGuinness's statement also reflects the progress made by the Sinn Fein leadership in its commitment to support the PSNI. Sinn Fein only recognized the authority of the PSNI in January 2007. Policing and Justice Devolution -------------- ¶4. (C/NF) All governmental powers were devolved to Northern Ireland's power-sharing government on May 8, 2007, with the exception of powers related to policing and the administration of justice, which, under the St. Andrews Agreement, were to devolve to the Belfast government by May 2008. When this date passed and little progress had been made on devolution, Sinn Fein became disillusioned because it felt that the DUP was not taking the necessary steps toward devolution of police and justice. Starting in June 2008, Sinn Fein began to block meetings of the Northern Ireland Executive (cabinet) until it could reach an agreement with the DUP on steps allowing for devolution. In November 2008, with support from the British, Irish and U.S. governments, the DUP and Sinn Fein agreed to complete the legislative steps necessary for devolution of policing and justice to take place in 2009. PSNI Chief Constable Sir Hugh Orde has repeatedly stated the delay in devolution has created a vacuum that dissident republican groups have used to criticize Sinn Fein's leadership. The British government and the PSNI have been concerned that this vacuum would lead to violence against police officers and other government targets. The USG has been clear in its support for devolution and the need for all parties to carry out their commitments under the St. Andrews Agreement. U.S. Special Envoys have played a crucial role in assisting with this process, and Robinson and McGuinness will seek assurances a new Special Envoy will be named. The British and Irish governments will seek a commitment from the new U.S. administration of its continued support on this issue and will be keen to learn who the new Special Envoy will be. ¶5. (C/NF) Funding for policing and justice has been a key concern by both the DUP and Sinn Fein. The view in Belfast is that recent dissident republican attacks will help move the process forward, especially if the British increase funding for security in Northern Ireland. The British government has allocated funds to cover policing and justice functions in Northern Ireland through 2011, so it will be important for the British government to satisfy Northern Ireland's politicians that sufficient funds will be available after that. The British Government and Sinn Fein are committed to ensuring devolution of policing and justice happens in 2009. The DUP will be nervous about devolution being completed before the June EU elections (DUP is worried about how devolution will play with Unionist critics of power-sharing),so most observers believe devolution will happen sometime in the fall, possibly September. ¶6. (C/NF) Both the DUP and Sinn Fein are confident that the pending legislation concerning devolution will pass in the UK Parliament despite Alliance Party objections that the legislation allows the devolved Justice Minister to lose his position should he lose cross-community support (a Sinn Fein demand). The Alliance Party, which is the main non-sectarian party in Northern Ireland, is likely to take the Justice portfolio once devolution occurs, and would like complete autonomy, something Sinn Fein is reluctant to allow. The Alliance Party has no seats in the UK Parliament, but hopes its Liberal Democratic allies will help them get the legislation changed. Neither the British government nor the DUP, which are sympathetic to Alliance concerns, are willing to delay or change the legislation to accommodate it, since doing so would upset Sinn Fein. Northern Ireland's Economy -------------- ¶7. (C/NF) The Northern Ireland economy should fare better than the rest of the UK during the economic downturn, according to a recent study. According to the latest PricewaterhouseCoopers UK (PwC) and Northern Ireland Economic Outlook report, the Northern Ireland economy should decline by three percent compared to four percent in the rest of the UK. PwC expects recovery to begin around the third quarter of 2010, with average growth for 2010 slightly above zero. At 5 percent, the level of unemployment in Northern Ireland is also the lowest of any region in the UK, which averages 6.3 percent. Housing prices in Northern Ireland fell by 28 percent in 2008, but economists believe the fall in prices is about to end. Northern Ireland's economy has also been helped by the weak British pound, which has boosted tourism and retail shopping, especially in border areas, by those from Ireland and other Eurozone economies. U.S. Economic Investment in Northern Ireland -------------- ¶8. (C/NF) Despite the economic downturn, Northern Ireland's leaders are still looking for outside investment as a peace dividend. In addition to Washington, Robinson and McGuinness will visit California and New York as part of an effort to attract badly needed investment. The May 2008 Investment Conference is still seen as a success for bringing over 80 U.S. businesses to Northern Ireland. While no direct investments have yet resulted from the investmeQ conference, Invest NI had always said it would take time before outside investment was finalized. Northern Ireland's leaders are still optimistic that outside investors will see the wisdom of placing operations in Northern Ireland, particularly due to its skilled workforce, common culture and proximity to the U.S. relative to other regions. BISHARAT