In terms of Scotland’s economy the number 1 most important natural resource is oil.
Additionally, oil is the world economy’s most important source of energy and is critical to the economic performance of all nations.
In a democratic country, having significant oil resources is a major economic blessing.
The gross domestic product (GDP per capita) of a nation is very closely correlated with how much oil a nation consumes per person. For example:
Vietnam: GDP per person: $6000. Oil consumption per person per day: 0.8 litres
South Africa: GDP per person: $13,200. Oil consumption per person per day: 1.8 litres (i.e. both approximately twice that of Vietnam)
Japan: GDP per person: $38,100. Oil consumption per person per day: 5.4 litres (i.e. both approximately 6.5 times that of Vietnam)
Hong Kong: GDP per person: $56,700. Oil consumption per person per day: 8.0 litres (i.e. both approximately ten times that of Vietnam)
Luxembourg: GDP per person: $99,000. Oil consumption per person per day: 15.6 litres. (i.e. GDP per person approximately 17 times that of Vietnam and oil consumption approximately 20 times).
The above figures and the data for other countries can be obtained from the CIA world fact book page.
This link between oil consumption and GDP is because almost all economic activity uses oil. Almost all physical objects that can be bought or sold require oil and a significant part of the value of these objects depends on how much oil is required to manufacture and transport them.
This link between oil and GDP also relates to:
Food and drink. (petrol and diesel are required to run tractors, combines, other farm vehicles and equipment that plant, spray the herbicides and pesticides, and harvest/transport food and seed)
Manufacturing. (Almost all products either use oil directly (e.g. contain plastics or chemicals from oil or require oil for the mining and transport of the materials used in their construction. Even entirely natural products such as those made from wood use a lot of oil in the harvesting of timber and transportation)
Construction. (The construction industry is heavily reliant on oil, the manufacture and running of all construction machinery utilises oil (e.g. diesel fuel). Bitumen is required for roads and paving. Solvents are required for paints and coatings. Lubricants for machinery. Plastics for window frames, pipelines, etc)
Chemical production. (Solvents, polymers, almost all industrial chemicals, cleaning products etc)
Financial services, banking and insurance. (rely on oil indirectly, if you reduce oil consumption in a country then theoretically all of these sectors will shrink as GDP falls)
Tourism. (Infrastructure and transport requires oil for construction, maintenance and transport)
Trade (shipping products requires petrol and diesel (for land based transport), fuel oil (for ships) and jet fuel.
Transport (Petroleum products power virtually all motor vehicles, aircraft, marine vessels, and trains around the globe. Electric vehicles are in a very distant second)
Communications and media (Oil required for equipment, transport and power)
Energy. “In total, products derived from oil, such as motor gasoline, jet fuel, diesel fuel, and heating oil, supply 33% of all the energy consumed by households, businesses, and manufacturers worldwide. By way of comparison, natural gas and coal supply 22% and 28%, respectively, of the world’s energy needs.” Oil is also required to develop other types of energy supplies, e.g. renewables.
Government
Education
Health
It can be seen that if a nation doesn’t have access to oil and the things derived from oil then it will have a very low GDP.
The “true” value of oil to most governments doesn’t mainly lie in the relatively small amount of tax that can be derived from the sale of crude oil in the international markets but rather it lies in the GDP that can be produced for the country from using the oil in each sector of the economy that requires it.
However, tax on the sale of refined oil products, (petrol and diesel) currently generates a significant amount of revenue for most industrial nations. For example, yearly, the UK generates approximately £30 billion in tax from the sale of petrol and diesel. This quantity of petrol and diesel (and hence fuel tax) is a similar amount to that is produced yearly from the oil from Scottish waters. This gives a small glimpse of the “true” value of the oil that Scotland has. (keep in mind that total Scottish public expenditure is approximately £54 billion)
If Scotland were to increase its oil consumption then its GDP would increase. For example if Scotland were to increase its oil consumption by 80% to a similar level as Norway’s consumption, then based on the correlation between oil consumption and GDP, Scotland could expect its GDP to also increase by around 80%, perhaps to around $70,000 (similar to Norway’s)
Scotland uses approximately 1/8th of this amount. I.e. Scotland currently produces approximately 8 times more oil than it uses. This fact is very important for Scotland’s economic future.
There are not many countries in the world that produce more oil than they use.
There are 7 countries in the world that produce more oil per person than Scotland. These are (in order from highest production per person):
Kuwait (GDP per capita, $70,200)
Qatar (GDP per capita, $132,000)
United Arab Emirates (GDP per capita, $67,600)
Saudi Arabia (GDP per capita, $53,600)
Norway (GDP per capita, $68,400)
Brunei (GDP per capita, $79,700)
Oman (GDP per capita, $44,600)
It should also be noted that countries that financially benefit most from their oil resources have a significant portion of the oil owned by the state (i.e. all of the 7 countries mentioned above have significant state ownership). The Norwegian government own 67% of the shares in Norway’s largest oil company Statoil and the largest company in the world (Saudi Aramco) is completely state owned. In an independent Scotland bringing some oil in to state ownership might make sense if the opportunity arises in future.
If Scotland continues to use up its oil resources at 1 million barrels per day then the oil would run out in approximately 55 years (based on Scotland’s estimated oil reserves of 20 billion barrels and no further oil discoveries)
The world’s oil output is likely to mostly run out over a similar timeframe and significant changes to the world economy will happen.
If Scotland decided to produce oil at a rate to only cover its own requirements then its oil resources would last over 400 years. (Note that reducing oil output to this level is not a realistic option, at least not in the short term as commercial oil companies have licenses to produce oil)
Oil will almost certainly cost more in the coming decades as supply drops.
Scotland having full control over its oil resources would have a major impact on the possibilities for Scotland’s future energy policy. (e.g. one option would be if Scotland wants to dramatically increase the amount of renewable energy used for electricity generation, industry and transport. The infrastructure and construction required for this would require an increase in oil consumption in the short term (having the side effect of increasing GDP) to create a more sustainable long term energy sector. Scotland has the potential to produce all of its required electricity from renewable sources.
Scotland's Other Natural Resources:
Water. Scotland has a plentiful supply of water.
Land. Scotland has plenty of land for agriculture, rough grazing and forestry and also has land for future urban development when required.
Renewable energy. It is possible for all of Scotland’s energy in future to come from renewable sources.
Food and drink. Scotland produces more food and drink than it consumes and has the capacity to increase production further.
Minerals (zinc, iron, coal)
Scottish Democracy
Scotland is relatively democratic compared to many countries in the world. However it has a long way to go until it is one of the most democratic countries in the world.
The main sources of anti-democracy in Scotland are:
Westminster:
The UK government at Westminster poorly reflects the political views and wishes of the Scottish people
There is a low level of democratic accountability of the government to the Scottish people. The outcome of UK elections hasn’t in recent times been influenced by Scottish voters and there is little prospect of this changing if Scotland remains in the UK. The Scottish electorate has little influence on UK government policies.
Westminster has control over Scotland’s natural resources, as well as control of most of the important economic and other political policies and control over the majority of taxes.
First past the post voting system: this system is designed to give one of two main parties the opportunity to form a majority government with an overall vote share of around 25% of the electorate. (For example 40% of votes cast on a turnout of 63% would be a typical result that would result in a majority government).
Media and news:
Newspapers (the vast majority of newspapers sold in Scotland are owned by companies outside of Scotland. Therefor there is an over representation of non-Scottish political viewpoints)
TV (most news and current affairs TV programmes watched in Scotland are produced outside of Scotland)
Internet (the BBC news website is the number one news website in Scotland, with most articles being produced in England).
Relative to older people younger people tend to rely more on alternative national and international news websites. Older people tend to rely more on traditional news outlets: newspapers and TV. This could be one factor which influences the different voting behaviour of these age groups.
University research done during the last referendum showed that voters were more likely to be swayed towards “yes” when provided with larger quantities of information on the arguments for and against independence.
Poor “Education”:
There is relatively poor understanding in society of the causes of problems in society. (Particular sections of the population are often blamed for problems rather than the real causes identified, such as; incorrect political systems (lack of democracy), inequality, under funding, poverty, poor education, economic policies (both UK and global)…)
People are “educated” to support (or at least not to threaten) the status quo. Interest in systems (political or otherwise) for improving society are not a focus of most education.
Fear is used as major tactic in influencing people’s political choices, rather than rational thinking and education.
UK and Global Economic Policy:
In my opinion a “perfect” democracy doesn’t involve a person voting based on how their choice will marginally affect their own personal finances but rather democracy should be about voting on issues to improve their country and also improve the world.
Ultimately governments should exist to help improve the lives of all citizens. I believe that governments in wealthy countries should not aim to distribute wealth and income in a very unequal way with the aim of gaining power and votes mainly from those that benefit from this system.
Globalisation can be an anti-democratic force in many countries around the world. A system where wealth is so unevenly distributed within countries and between countries can lead to a very uneven distribution of power within countries and also between countries.
Personal View on Scottish Independence
There are obviously also arguments against independence but I find none of these arguments convincing compared with the arguments that support independence. The two arguments that could possibly have influenced me towards a “No” vote are:
That independence would make Scotland poorer and reduce the money available for public services etc. The only point in time at which I believe this argument could make sense would be for the few years after independence. Setting up new Scottish institutions (e.g. government and civil service etc.) will cost money but the amount of money would be low compared to overall public spending and any potential shortfall could easily be met by a relatively small amount of government borrowing. In the medium to long term (e.g. from approximately 5 years onwards) I don’t find the economic argument against independence in the least bit convincing, as all evidence and reasoning that I can find says that an independent Scotland should be in the top 10 richest countries in the world.
This argument against independence is somewhat similar to arguing that it is a bad idea to start up a new company that you know is going to be one of the most profitable companies in the world but you are not going to start the company because you may need (or rather may want) to borrow a small amount of money during the initial years.
Scotland’s assets (particularly oil and energy) and the fact that it is a stable democracy would mean that it should receive the most favourable terms for borrowing if it is needed in the short term (e.g. it would have a AA or AAA credit rating)
2. That independence would have a negative economic impact on the rest of the UK (rUK). If Scotland leaving the UK had a significant negative impact on the rUK then that would be a reason against independence. However on the balance of probability I think it is unlikely that rUK will be negatively impacted over the medium and long term and high levels of trade will continue. If Scotland becomes a successful independent country with increased levels of equality and social justice, then I think that is likely to have a positive effect on rUK. I don’t believe it’s a coincidence that many of the world’s wealthiest countries with the highest levels of economic equality and social justice are grouped geographically together. (Norway, Finland, Sweden, Denmark, Germany and the Netherlands). These countries also unsurprisingly have high levels of trade between them.
I do feel that many people that would currently vote “No” in a second referendum have to some extent been “tricked”. I believe that someone that has fully researched the arguments for and against independence and approaches the subject with an open mind and still votes “No” is likely to have a significantly different view of people and the world in general and have a different view of the purpose of politics to myself.
It is my firm and honest belief that Scotland becoming an independent nation is the most important political decision that we will make in my lifetime and if it happens it will have the largest positive change on the people of Scotland in our history. This opinion isn’t based on party politics or a belief in Nationalism or the superiority of Scottish people, if anything it is based on the opposite of these things. I consider Scottish and UK politics to be not properly fit for a modern, wealthy democracy. The difference between some of the main political parties (e.g. SNP, Labour and Liberal democrats) is smaller than they would like you to think, and it seems that some (many?) party members appear to significantly define themselves by their dislike (or even hatred) of other parties or party members. (This may be “human nature” to some extent but is not a good thing)
Also I think that the Scottish National Party (SNP) is actually a bit of an unfortunate name, as traditional nationalism is a negative thing. However I think it is quite clear that the SNP aren’t a nationalist party in the traditional sense (their policies towards people from other countries and other countries themselves is not what you’d call nationalist) and the SNP are considerably less nationalist than the current Westminster government. The Scottish Independence Party might have been a better and more accurate name. Regardless, independence in the broad sense isn’t about the SNP. It is about Scotland becoming an independent nation and being able to choose its government and political structures. Would the SNP be the first governing party of an independent Scotland? Possibly. Would it be a coalition government? Quite possibly. Personally I don’t particularly care about which party/parties would form the government, as for me it’s not about that.
I am a firm believer in “nurture not nature” as the major influence on peoples world views, political views and overall behaviour and I think scientific research strongly backs this up. If Scotland becomes a more prosperous, healthy and happy nation it won’t be because Scottish people are in some way inherently better than people from other countries, it will be because we will live in a better environment (by environment I mean; housing, health care, education, political representation, culture, quality of food, etc.). If Scotland becomes an independent nation then the people of Scotland will be freer to choose a better environment to live in…. and based on the way people have traditionally voted in Scotland I imagine this will be a fairer and more equal society and with full control over Scotland’s resources it will almost certainly be a richer society. It is my hope that party politics will have less of an influence over peoples life’s in future and a wealthier, more educated and confident population will be more in control of political institutions, processes and decisions. With more political decisions in future based on logic, reason, evidence, sustainability, empathy and compassion (factors that don’t come from politics but rather are just behaviours of average well looked after human beings).