Is the RoI's so called "Celtic Tiger" economy model possible in Scotland? - from Scotia 07/09/00
[another Scotia list member stated]Does anyone here have a good source for a detailed appraisal of why Scotland and Ireland aren't that good for socioeconomic comparison? I'd be interested to hear about this.
I've read a couple of very good articles that went through this in detail but unfortunately I can't remember where right now. If I remember over the next few days I'll post urls to the list. Off the top of my head here are a few reasons why a direct comparison is unwise:-
1/ RoI was a net beneficiary of very substantial European subsidies particularly because of its large often small scale agricultural sector through the CAP and its low GDP in EU terms until recently.
Scotland has 98% GDP of UK average and smaller agricultural sector so unlikely to apply to Scotland particularly after EU eastward enlargement in the next decade or so. Scotland likely to be net donor to EU in regional aid terms. RoI likely to also become a net donor soon as well.
2/ RoI has used a very low corporation tax to entice business to locate there and also to boost its GDP in paper terms as it in the interest of corporations to report tax there. Some of the 7% growth rate figures p.a. are therefore highly suspect as they have more to do with accountancy tricks than anything else.
This seriously ticks off the Germans and co and it is debatable how much longer the rest of the EU will put up with it anyway so opportunity for Scotland will probably have passed if independence happens 5-10 years from now (very unlikely IMO anyway). This policy was not really in the spirit of EU cooperation after all.
3/ RoI has cornered about 40% of US investment within EU due in part to the large Irish-American lobby there making it the favoured English language location of choice.
Tartan Day vs St Patrick's Day? No contest. Scotland has a lot of work to do in that department.
4/ RoI has a low wage economy in EU terms and has been able to keep wages low through an employers trade union consensus without much in the way of strikes over the last decade or so.
Much easier to do when politics was traditionally about what side your grandfather fought on in the 20's civil war rather than a class based Labour vs Tory environment. Also unlikely to be such a factor once EU eastward enlargement is factored in.
5/ RoI has the youngest population in western Europe and is about a generation behind in terms of divorce rates and married women participating in the workforce etc.
Scotland has more old people for the working population to support and a higher % of the working age population seeking employment as potential state benefit recipients. This limits the ability to use a low taxation regime compared to other EU states to entice inward investment.
The RoI is still a good example of why some of the scare tactics used against the SNP about breaking up the British internal market are not worth taking seriously IMO now that the European Union is the key factor in that regard but it is a mistake to think that the so called "Celtic Tiger" economic model would automatically apply in Scotland's case and will even necessarily last that much longer in the RoI's. Anybody see any flaws in the above or see any other differences or important similarities that would negate some of these factors?