LAST Aug. 31 the Provisional Irish Republican Army declared a cease-fire - a complete cessation of all military operations for the indefinite future - halting their campaign to remove the British from Northern Ireland. After 25 years of sectarian brutality in and around Northern Ireland, the headlines in Belfast read, ''It is over!'' A year later the question still looms: Is it over? The IRA declaration of last August brought a similar pronouncement from the unionist paramilitaries (who favor continued ties to Britain) in October. Since that time a relative calm has reigned. While the ''peace-fires'' brought the kind of quiet that exists in the absence of shelling, they have not brought peace. No political settlement has been achieved, no structures or institutions developed, no agreements reached. Despite these setbacks, the rewards of delivering the conflict into the political arena in lieu of the military one have been felt in areas that may make irrelevant continued political conflicts. Economic developments such as investment and tourism have dramatically outpaced political gains of the last year, making the politics and posturing of the current negotiations appear hollow and disconnected from the real world. It is in this disjunction that the most promising opportunities for Northern Ireland reside. In political terms the peace process in Northern Ireland is not going well. The cease-fires have not remedied the deep ideological divides between unionists and republicans. Progress toward the first all-party talks in 25 years of conflict has been stymied by the unionists' insistence that the IRA lay down its weapons (or decommission them) before unionists will even meet with Sinn Fein, the IRA's political wing. Sinn Fein in contrast argues that decommissioning could never be a precondition to negotiations, that unilateral decommissioning (i.e., by the IRA but not the Protestant paramilitaries or for that matter the British government) is tantamount to suicide, and that its cease-fire is a sufficient goodwill gesture to warrant its participation in all-party discussions. There are hints that the cease-fires will end if progress is not soon evident. Beyond these immediate problems lie others far more daunting. The biggest threat to any kind of peace resides in the fear of the unionists and their leaders that peace will force upon them compromises of their identity, status, and ambitions. Maintaining the union with Britain is their primary political goal; changes in the status quo offer them little obvious benefit and many risks. Conservative unionist forces are wary of the concessions made by the British government to the Irish one, of the detente between Sinn Fein and the British government, and of Sinn Fein's increased international acceptance, particularly in the US. Some people in Northern Ireland have a vested interest in seeing the peace talks collapse and the process dissolve. The Rev. Ian Paisley, head of the Democratic Unionist Party, in keeping his party out of the present talks about talks, has staked his entire 30-plus-year political career on their failure. This must be kept in mind as the Clinton administration attempts to assist the peace process. Yet, outside the political arena, dramatic progress has been made in this year of eerie calm. While the cease-fires have not quite brought peace to Northern Ireland, they have quite strangely brought a measure of prosperity. The Northern Ireland Tourist Board reports a 20 percent increase in the number of visitors to Ulster since the cease-fire. They estimate 8,000 tourism-related jobs will be created in the next three years. Belfast International Airport has experienced record-breaking business with 20 percent more international passengers and 30 percent more domestic (i.e., within the United Kingdom). Investors ranging from Fujitsu to J. Sainsbury have visited, investigated, and committed themselves to the future Northern Irish economy. Unemployment, while approximately 12 percent, has reached a 13-year low. These developments are significant in that the current round of troubles in Northern Ireland arose in part as a result of desperate inequities between Catholics and Protestants in social and economic terms in the 1960s. Since then, public investments have partially remedied the situation, but the violent conflict stagnated the Ulster economy. This year of relative peace, combined with Ulster's natural appeal to private investors, may create an economic momentum for both republicans and unionists, Catholics and Protestants, which will eventually outpace and potentially render irrelevant the political differences of their leadership. The more the Ulster people feel the cease-fires mean day-to-day improvements in their lives, the more difficult it will be for the paramilitaries to return to terrorist campaigns, and the more incentive their political leaders will have to continue to negotiate. Pressuring the political leadership may result in a conservative backlash that could cripple the peace process, but encouraging investment and economic growth is likely to facilitate the development of a healthy society and a more permanent peace. This is where the US should focus its efforts rather than in the unstable political realm. The conflict in Northern Ireland is far from over. James Molyneaux, leader of the official Ulster Unionist Party and the main unionist negotiator, recently resigned, causing a leadership struggle that may change the variables of the peace process. Despite the uncertainty, however, a year-long cease-fire is a tremendous accomplishment for a society deeply divided, painfully scarred, and heavily armed. It is the first indication that peace may be possible.