By a Newsnet reporter
The Scottish Government has presented an informed and detailed prospectus for the future economy of an independent Scotland.
Meanwhile, research by the SNP shows that if recently independent countries are anything to go by, we can also expect in a surge of foreign direct investment (FDI) for Scotland following a Yes vote in September 2014.
There is evidence that some of the most recently independent small countries in Europe experienced a surge in overseas investment in the immediate aftermath of independence, which experts and business people believe could easily be mirrored in Scotland – particularly given that many of those countries in the nineties did not have as developed a market economy as Scotland does.
Latvia, Estonia, Lithuania, the Czech Republic and Slovakia all experienced a massive increase in inward investment following independence. In all five, inward investment increased by a factor of three or four in the years following independence.
Estonia enjoyed inward investment totalling some US$82 million in 1991, the year the Baltic states declared independence, by 1997 this had increased to US$266 million. Latvia experienced the largest increase of all, foreign investment rose from US$29.4 million in 1991 to US$521 million in 1997.
Scotland is far better placed than former Communist states to attract foreign investment. Scotland already possesses a fully developed market economy, and the country enjoys massive natural resources in the form of oil, gas, and renewable energy which the Eastern European nations lack.
In addition Scotland already has a vital and productive export sector, with Scotch whisky alone contributing £4.27bn annually, or £135 per second – representing about a quarter of Britain’s food and drink exports.
The SNP argue that an independent Scotland would be able to implement economic and fiscal policies which would optimise the conditions for foreign investment in the country. In the rapidly developing renewable energy sector, companies complain that UK government energy policy, which is focussed on the renovation of nuclear power generation, is hampering the development of the renewables industry. The SNP say that in an independent Scotland, obstacles imposed on Scotland by Westminster policies would be removed.
Angus MacNeil MP, SNP Westminster Transport Spokesperson commented:
“What this research shows is that newly independent countries have a great opportunity to build new business as the economy flourishes and self confidence grows. In my portfolio area I am constantly being alerted about huge concerns over Air Passenger Duty (APD), most recently with the auctioning of slots for flights from Inverness to Gatwick.
“With policies appropriate for Scotland, the growth in direct flights with independence is just one of these opportunities. It has been supported by European Transport expert Professor Germa Bel, who as well as being an adviser to the Spanish government has been a visiting scholar at Harvard in the United States. He commented:
‘Becoming an independent country implies higher demand in aviation. International organisations, Embassies and increased demand from business travellers has potential for increased connectivity particularly in intercontinental flights, this would certainly be the case for Scotland and would make overseas investment more likely’.”
Gordon MacIntyre-Kemp Director of the business network, ‘Business for Scotland’ commented on the findings:
“We know that independence can benefit economies in several ways and that a growth in foreign direct investment (FDI) is certainly one of them. The internationalism of trade and even the confidence that comes from self determination can lead to an increase in entrepreneurial activity.
“I was involved in FDI in Scottish Enterprise in the 1990s. FDI is like a sales process and as with all sale processes getting your foot in the door as a national brand and with a cultural standing in the world helps you build relationships and the support package combined with new connections to world markets and a confident economic outlook can close the deal. If Scotland is a confident self governing economy we would have an advantage in attracting overseas investment, as opposed to our current status as a far-flung undervalued economic region of London and the South East.”
Stewart Hosie, the SNP’s Westminster Treasury Spokesperson, added:
“This research is a positive and sensible assessment of the potential for an independent Scotland. What is clear is that countries emerging into the global marketplace as newly independent places to do business have attracted surges of investment, and there is every reason to believe that the same will apply in Scotland – particularly as we are a developed market economy in a way that these new countries in the 1990s were not. In our case a lot of that FDI would be in added value investments such as international organisations wanting a Scottish base, support businesses, and growth in demand for new air-links.”