Will Scotland be able to cope with its own debt if it became an independent country?

Scotland will not be able to pay its own debt. A simple way of looking at this question is to go deep into the Scotland’s debt, deficit, revenue, and in a wider perspective, their economy. Scotland has very poor economy and she has been depending largely on United Kingdom for aids.

Looking at the debt the Scotland owes UK, in January 2012, the arrear was standing at £988.7bn excluding bank bailouts and when the bank bailout is included, the arrear totals to around £2,200bn. This arrear has never been paid to date. Settling this huge arrear is never possible with a young independent country if the referendum of their being independent will be passed in the year 2014.

own debtThe Scotland country’s income is far less than its income, this leaves the country with deficit and for it to meet its expenses, the country has to go for more loans. For example, in 2011-2012, Scotland’s estimated net fiscal balance was a deficit of £18.2 billion (14.6% of GDP) when excluding North Sea revenue, a deficit of £17.2 billion (13.5% of GDP) when including a per capita share of North Sea revenue or a deficit of £7.6 billion (5.0% of GDP) when a geographical share of North Sea revenue is included.

Apart from the North Sea oil which gives the country 90% revenue, the larger percentage of the left 10% comes from the investors from UK. If in any case Scotland becomes independent, the investors from UK may withdraw their investments which may be a set- back to the Scotland’s economy. Bearing in mind that higher market of Scotland’s product and services is in UK, they have been buying and selling in European countries like Belgium and Spain, just to mention a few, their independence will cut the link hence reducing country’s income and this will put the country in a position of not being able to manage its arrears.

The biggest thing for Scotland to have if they are to become independent nation is a debt management plan, which will provide them with some sort of target to aim towards reducing their deficit.

What are the advantages and disadvantages of Scotland becoming an independent country

In 2014 the people of Scotland will decide whether or not to break away from the UK. Any split would see the end of a union that has lasted some 300 years.

Though there will be some who will vote to break away from the rest of the UK simply because they believe the Scottish people should be independent, regardless of advantages or disadvantages, many will adopt a more pragmatic approach. Many will vote the way that will benefit them personally, rather than out of a strong belief in the United Kingdom or an independent Scotland.Scottish People

One major issue that has often irritated Scots is that decisions affecting them are made hundreds of miles away in London. This is not so much of a problem if the government is made up of many Scottish MPs, but that is not the case with the current coalition.

The Scots certainly have assets that they can maximise if they become independent. As an independent nation the Scottish people will be able to take full advantage of their country’s rich natural resources, such as oil and gas. It’s also a country that has perfect conditions for several types of renewable energy in the shape of wind, tidal and wave energy. Other advantages for England’s neighbour are that it is always a magnet for tourists, and, though it is a country with a small population, per capita the Scots compare favourably with any other nation on Earth, in terms of creativity and inventiveness.

One possible disadvantage for Scotland, if it becomes independent, is that it won’t be part of a more powerful nation. This could impact on the Scots in terms of trying to attract big companies to invest in the country, to not being so well protected when relying totally on its own armed forces. It may also face increased challenges regarding fighting crime and terrorism when an independent state.