O NLY LAST autumn, Northern Ireland’s second city was eagerly awaiting the opening of a graduate medical school. It was billed as the centrepiece of an urban renewal plan, which over time would improve health care as more doctors stayed in the region. Then came the bad news: the startup was to be postponed until at least the end of 2020. Because of a political impasse that has seen Northern Ireland’s government suspended for more than two years, there was no local minister to sign off the new faculty. It was “bitterly disappointing”, says Paddy Nixon, vice-chancellor of Ulster University ( UU ), who had masterminded the plan.

To grasp the anger in Derry, recall that a lack of higher education has been a festering grievance in this mainly Catholic city for over 50 years. In a land of long memories, people still fume over the decision by Northern Ireland’s unionist masters in 1965 to launch the region’s second university not in Derry but in Protestant Coleraine.

The recent medical snarl-up is one of many bad effects of the collapse of Northern Ireland’s power-sharing administration in January 2017. The damage, in stalled projects and investments, could reach £1bn ($1.2bn) by the end of this year, according to the Confederation of British Industry, a business lobby. Across the region, decisions over schools, health care and waste-water treatment have been postponed.

Now Brexit, particularly of the no-deal variety, threatens to make matters worse. Households, businesses and students in Derry rely on seamless transport over the adjacent border with the Irish county of Donegal. About 15,000 people in the vicinity cross every day to work or study. The civil service has warned that a no-deal Brexit could cost 40,000 jobs in Northern Ireland. With about 5% of Derry’s population drawing the dole, its unemployment rate is already twice the regional average. Ire over Brexit has helped to fuel a local resurgence of dissident nationalist violence, of which the nastiest sign was the killing of a young journalist, Lyra McKee, in April.

Yet the mood among the city’s movers and shakers is not uniformly gloomy. On the contrary, people say they want to build on the gains of the past decade. First among those is the habit of seeing Derry not as a remote extremity of Northern Ireland, but as a hub of the whole island’s north-west. “You can either see us a town of 110,000 on the edge of the United Kingdom, or as the linchpin of a region of Ireland that already has 350,000 people and is likely to grow,” says Philip Gilliland, a former president of the Londonderry Chamber of Commerce.

In many ways, all-Ireland casts of mind are already established. The county of Donegal and the council encompassing Derry and nearby Strabane work in lockstep in areas ranging from libraries to sport. They go on joint missions to America to tout for investment. For the tourist business, Derry’s historic walls and Donegal’s gorgeous beaches are a single product. John Kelpie, Derry council’s chief executive, has argued that the city straddles the two countries, as its outer edges are in the Republic.

The Irish government thinks in a similar way. Its national development plan, “Project Ireland 2040”, incorporates only one Northern Irish place, Derry. Common sense, rather than nationalist zeal, seems to underlie that decision. Its authors expect Ireland’s population to grow by another million or so and they want the northwest, including Derry, to absorb much of this expansion.

Some recent initiatives give a hint of what could be possible if the logic of geography were followed through. Altnagelvin, Derry’s main hospital, has a newish radiotherapy unit that treats people from either side of the border. That saves Northern Irish patients a two-hour ride to Belfast, and those in Donegal a much longer hike to Galway or Dublin.

Improvements to UU ’s Derry campus, known as Magee, have been helped along by cross-border ties with the Letterkenny Institute of Technology, which is growing and hopes to morph into a university. Despite the dashing of its medical hopes, Magee has set up research centres in robotics and cognitive data analysis. These outfits will hardly stop talking to their Irish counterparts after Brexit, says Mr Nixon.

Businesses will draw on the ingenuity which even the existing situation has forced them to hone. Companies already cope with two currencies, two tax regimes and two sets of laws, says Andrew Fleming, managing director of a group of small engineering firms that sell mainly to farmers. His group keeps manufacturing units on both sides of the border, serving clients in each jurisdiction. “We locals are used to working around the border,” he says. “Though for an outside investor, extra hassle could be a huge deterrent.” His firm started in a Donegal village, just south-west of Derry, five generations ago when Ireland was a single political unit under the crown. It has proved resilient through many vicissitudes.