The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Aimee Donnellan

BELFAST, June 17 (Reuters Breakingviews) - The UK has struggled economically since its 2016 vote to leave the European Union. Yet Northern Ireland, in the twentieth century a byword for sectarian conflict between Catholics and Protestants, has emerged as an unlikely Brexit winner. Now anti-immigration protests may see it squander a golden opportunity to cement this lead.

Since the 1998 Good Friday Agreement ended the so-called Troubles, the region's economy has been one of the UK's weakest. An over-reliance on the public sector — which employs 27% of the workforce compared to 18% across the rest of the UK - has suppressed private sector growth and productivity. Political instability has compounded the problem. The power-sharing arrangement between Sinn Féin, which seeks reunification with the Republic of Ireland, and the Democratic Unionist Party, which wants to remain firmly within the UK, has repeatedly collapsed — leaving Northern Ireland without a functioning government for five of the past ten years.

What has changed is Brexit. The Windsor Framework — created to avoid a hard border on the island of Ireland — gives Northern Ireland access to the EU's single market for goods and farm products, making it an attractive base for companies seeking to sell into both the EU and UK simultaneously. The fact no other UK region enjoys this advantage helps explain why financial services output fell in the wider UK between 2015 and 2023 but rose 50% in Northern Ireland.

The headline figures tell a similar story. Since 2019, the Northern Irish economy has grown faster than the wider UK: last year, output grew 2.1%, much faster than the UK's 1.4% and the EU's 1.5%. Wages rose 7.4% in the year to April 2025 - the second largest annual increase on record and ahead of England, Scotland and Wales. And while total goods exports from Great Britain have fallen 5.1% since the UK rolled out the latest version of its trade and customs agreement with the EU in the third quarter of 2023, Northern Ireland's have risen 2.7%.

A recent spate of anti-immigration riots on the streets of Belfast, following a knife attack by a Sudanese man on June 8, risks reversing those trends. Unrest itself is far from unusual - annual marches in July, which commemorate a Protestant victory over Catholics centuries ago, have historically been accompanied by violent clashes and bonfires. A number of global firms told Breakingviews that these already made it difficult to convince workers to relocate to the region. If anti-immigration riots targeting ethnic minorities were to become an annual fixture as well, Northern Ireland's pitch to global investors would become significantly harder.

Even in calmer times, deep historical divisions continue to frustrate economic development. Belfast has many of the attributes companies look for - relatively cheap housing, an international airport, an English-speaking workforce and large plots of industrial land. But progress is too often stymied by sectarian deadlock. The Maze Prison is a case in point. The 350-acre mostly derelict site — where hunger-striker Bobby Sands was once imprisoned in the 1980s — has been in limbo for 12 years. Planners have floated the idea of transforming it into a tech campus or enterprise zone, a project that could bring thousands of jobs to the region. But while Sinn Féin's Northern Irish leader Michelle O'Neill has said developing the site could be "a huge catalyst for economic development," her party insists any development must include a prominent memorial to Sands and other hunger strikers. The DUP has said there will never be such a memorial. The site remains untouched.

To get the economy moving, one senior politician told Breakingviews that Northern Ireland needs more support from Westminster. To start, the region could cut its own corporate tax rate — currently set at 25% — to align with the Republic of Ireland's 15%, making it more competitive in the eyes of global firms. Over the past five years, the Republic has lured investment from the likes of AstraZeneca AZN.L, Apple AAPL.O and Microsoft MSFT.O, bringing high-paid jobs and economic stability. Northern Ireland already has the power to make such a change.

But there's a catch. Doing so would trigger a reduction in the block grant Northern Ireland receives from Westminster - threatening the public service jobs that a quarter of its workforce depends on. Without more economic growth, the region will remain reliant on the UK, where cuts to public sector funding create fertile conditions for social unrest. The risk for Northern Ireland is that its post-Brexit boost becomes a missed opportunity.

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CONTEXT NEWS

Masked men burned families out of their homes in Belfast in ‌a wave of anti-immigrant violence on June 9, a night after a Sudanese man was charged over a knife attack, Northern Ireland's First Minister Michelle O’Neill said.

Hundreds of protesters, many with their faces covered, attacked police and burned vehicles in a number of locations across Northern Ireland after a video of the knife attack, which ​left one person with serious neck and head wounds, went viral.