This paradox lies at the heart of Scottish economic strategy

WHILE the SNP gear up for another change of leadership, the signals coming from the front and backbenches make it clear that the political orthodoxy that has prevailed since before it took power in 2007 will continue under the next leader.

Under this economic programme, successive Scottish governments (both Labour and SNP) have aimed to create “net flows” of investment into Scotland. However, our latest policy paper on profit extraction has found that this policy actually increases greater flows of profit extraction out of the Scottish economy. As a result, Scotland has one of the most foreign-owned economies in the world.

What our research found, is that Scotland has recorded a net outflow of wealth every year since 1998, accumulating to a staggering £277.4 billion extracted from the Scottish economy by 2021. The only comparable polities in the World Bank database for profit extraction are San Marino, Singapore, Ireland, Luxembourg and the Cayman Islands.

In other words, for the relatively high net flow into Scotland, we should not be leaking upwards of £5.1bn in 2017, or £10.1bn in 2021 (the equivalent of 5.59% of Scotland’s GDP), out of our economy as a “first world economy”.

What’s important about this vast level of profit extraction is that the leaking of wealth inevitably leaks power.

If, therefore, we are faced with a new first minister who will continue to push a neoliberal FDI model, which includes the Green Freeports programme, and the selling o‰ of Scotland’s natural resources, then we will see no change in whose interests the economy is being run.

Our over-reliance on foreign capital has and will only lead to the capture of Scotland’s democracy in the hands of a small group serving the interests of financial capital. Why else would tax breaks, erosion of workers’ rights, or the capture of environmental standards be highlighted as a fair trade o‰ for “investment” while sadly the ordinary Scot will have to cope with a Council Tax freeze that will result in key local services being closed down.

We should hear the alarm bells ringing when the Scottish Government ministers cheer the “success” of attracting foreign investment – don’t read it as investment, read it as extraction.

Perhaps, under the SNP the signalling made to business through FDI rhetoric is somewhat a ploy to win over the views of global capital to the idea of Scottish