Scotland must drop unhealthy addiction to foreign investment
IAN Mcconnell’s highlighting of Scotland’s continued dependency on “foreign direct investment” (FDI) offers a welcome opportunity to once again explain why the policy – supported by multiple Scottish Governments – is acting to the detriment of the Scottish economy (“Scotland wins record overseas investment in 2023, trumping UK”, The Herald, July 11). All investment demands an expectation of a return on that investment and the fact that the investment is coming from outwith Scotland obviously means that those returns must leave via the same route.
Scottish Government figures show that since the start of devolution, more than a quarter of a trillion pounds has been net extracted from Scotland and that around £10 billion was extracted from Scotland in the most recent year we have data for. Further analysis by Common Weal shows that as a proportion of our economy, this is the highest rate of profit extraction of any of our peer nations with the exception of a handful of micro-states and tax havens as well as higher than any of the World Bank’s income groups, including the poorest and most indebted nations. Scotland, in that sense, runs an economy with European levels of economic development but with West African levels of foreign exploitation and profit extraction.
This isn’t just an issue of money. Companies that are mobile enough to invest in Scotland are mobile enough to remove that investment unless they get the political kickbacks they want (see the discussions around Scotland’s Green Freeports, for example. Or Grangemouth) and thus present a direct intervention against our democracy. They also tend to more weakly embed jobs and skills in the economy and are more willing to leave workers on the scrapheap if some other nation decides to attract their “investments” instead of us.
The Scottish Government should drop its addiction to FDI and should concentrate on building up domestic sources of investment (starting with reforms to the Scottish National Investment Bank) and should focus not on quick “GDP growth” and accelerations of shareholder profits but on sustainable development not just of companies but of their workforces and the wellbeing of the communities in which they live. Dr Craig Dalzell, Head of Policy & Research, Common Weal, Glasgow.
THANKS to Ian Mcconnell for highlighting our country’s business achievements when so much of the media seems determined to ignore them.
Instead of championing our successes they search out negatives. Time and again depressing headlines are made about NHS waiting lists, education standards, and housebuilding. Often they are wrong.
Sometimes, figures are related to England and Wales only, with no attempt made to compare them with Scotland, which are often better by the way, leaving Scots readers/ viewers confused. But as Mark Twain popularised: “There are lies, damned lies and statistics.”
You have to read to the end of a report to discover the headline doesn’t actually tell the full story. And broadcasters often don’t even bother going that far.
We should be proud of our record in Scotland despite facing persistent obstacles from Westminster.
To cover many of the shortages in the NHS, the care service, construction, agriculture and tourism industries, Scotland needs refugees and asylum seekers. The Tories were determined to deny us that, with hugely expensive nonsensical schemes like Rwanda.
Labour’s already rightly ruled that out but how much further will it go in welcoming people to this country fleeing violence, war and persecution?
Andy Stenton, Glasgow.