The future is near, it is often said. Next week the people of Scotland will be able to vote on the future of their country, an important consequences for the long run. If the Scots decide to leave the UK, I have three points of advice for them:
- Quit the Sterling
- Stay outside the European Union
- Base your economy not on North Sea oil and gas
Regardless of the difficulties the UK might pose for an independent Scotland to maintain the pound, it would be better for Scotland to drop that currency altogether. There is no point in leaving a political union while remaining in a monetary one with the rest of the UK. By keeping the sterling Scotland cannot pursue an independent monetary and economic policy, since any Scottish government has to react on whatever the Bank of England does. With their own currency the Scots have more control on their economy, they can lower/raise interest rates and manipulate exchange rates in line with Scottish needs.
The European Union is a sinking ship. With 28 member countries it is hardly a surprise that the EU is divided on almost every issue of importance. As long as any member state continues to pursue their own interest rather a common European interest, thing will not improve. Because its chronic internal disagreement the EU is always lagging behind the facts, which is skilfully exploited by people like Putin. It is in my opinion only a matter of time the EU will collapse under the weight of its own incompetence.
Though North Sea oil reserves might be vast, they are finite. And the Scots have a fair claim to some of the British reserves and it would wise to use oil revenue to create a fund like the Norwegians do, it would be better to create an economy as if there were no oil. With 5.3 million people Scotland has a population similar to Denmark and the people have proven to be ingenious (many important scientists, inventors and entrepreneurs were Scots), hence an independent Scotland has a sound economic potential despite unionist doomsday rhetorics. Unlike oil tourism is something that will not stop anytime soon. And for instance Loch Ness will not go to the UK after independence.
But I will leave it to the people of Scotland to decide upon their future.