A Chance To Diversify Our Economy.

There has been a heated debate over the past few weeks concerning a new report published by the IFS (Institute of Fiscal Studies). Both sides have been claiming to have the upper hand when it comes to what the report says. Overall, for me anyway, the report has not revealed a lot more new information about the economics of the independence debate. The main points I have gathered are that:

•  The GERS report clearly states that Scotland contribute more than it gets back percentage wise, yet due to the fact that the UK is in a recession Scotland get slightly more numerically from Westminster than we pay back in taxes, yet is still in a healthier financial position to the rest of the UK to the tune of £90 billion.
• Following independence, Scotland's fiscal position would be slightly better than that of the UK, due full control over economic resources resulting in higher tax revenues for the Scottish Government.
• We would inherit less debt to GDP per head compared to the rest of the UK.
• A major asset for the Scottish economy would be our oil revenues, which would provide a significant initial boost to our economy, but due to the finite nature of the resource, could be less of an asset to us  in later decades. 

On face value, the report is pretty balanced, both sides can lay claim to have valid points to shout about. Yet, as you might have expected, the same old rhetoric prevails from the unionist side, points which I have most certainly rubbished at an earlier stage. 

One of the arguments presented by the unionist side when referencing the report is that Scotland's economy would be too reliant on North Sea Oil revenues (around 20% of our GDP comes from oil revenues), and due to the volatile nature of the resource, a price fluctuation could be disastrous for the Scottish economy. And that the oil will run out at some point in the next 50 years, so it is not a wise resource to base your economy on. 

First of all concerning the point made about the over-reliance the Scottish economy would have on oil, the very notion that the oil revenues are a bad thing to base our economy on is nonsense. A quick look at how much debt we would inherit from the UK proves just how much of a valuable asset this is to Scotland. We would inherit approximately £80 billion of the UK national debt, 8.4%. We would also inherit 90% of UK oil and gas reserves, which amount to 24 billion barrels and wholesale value of £1.5 trillion.

This would mean our economic assets, just from oil, would outweigh our debt by ten times. This is a safety net every country in the world would want to have right now in this time of economic uncertainty. It is certainly better than having our economy 60% reliant on a banking sector in which the money can stop almost instantaneously, and is precisely the thing which ruined our economy in the first place.

Recent analysis has show that our economy is not as reliant on oil as the most successful nation in Europe per head at the current moment, Norway. The statistics were compiled by the Scottish Parliament's Information Center (SPICe), and they clearly show that, over the past 12 years, the Scottish economy has been 2.2 times less reliant on oil revenues than our Nordic neighbour. The Nordic economy was 30% reliant on oil revenues, whilst Scotland's is 13.6% reliant.  Having control over its own economy, Norway has managed to build up a $600 billion oil fund to ensure that the revenues gained will last far into the future from when the resource runs dry. 

Then there is the question of, what happens when the oil runs out? Well, that will not be as remotely as bad for Scotland as it first sounds. With full control over our economic resources, Scotland can use the extra capital gained from the industries which flow down to Westminster at the current moment, to diversify our economy and make it not reliant on North Sea oil.

The obvious first investment would be in our renewable energy sector. Currently Scotland has 50% of Europe's wind power, 25% tidal, and 10% wave. Any country choosing not to invest in a sector with so much potential would be daft. Independence would give Scotland the chance to re-industrialise our nation again into researching, developing, and producing renewable energy. The Scottish government are preparing to achieve 50% of Scotland's energy from renewable sources by 2015; and 100% by 2020. Recent progress has shown that to be well on track, with 40% already being met from renewable's.

To bring this to a conclusion, it can therefore be seen that the unionist claims that our economy is reliant on, or to put it how they say it 'better together', in the UK are wrong once again. With full control of our economic resources we, the people of Scotland, can reshape our country into a more profitable, equitable, equal, and greener society, that aims to direct its revenues into raising the standard of living, and the general well being of our population. Rather than spending it unnecessarily on nuclear weapons, bloated defence budgets, and illegal foreign wars.