With the Scots voting to stay part of the UK, attention will turn to the next potential referendum: on whether Britain will remain in the EU. There are comparisons and contrasts between the two votes, as well as lessons to be learned.
However the independence referendum turns out, the arguments from both sides reveal some hard truths. Governments are at the centre of modern economies. But their freedom is limited, since no nation is an island. And the toughest challenge is managing the financial system.
Japan wants to invest $34 billion in India. China’s pledge could be several times as large. Realizing these commitments, and digesting up to 12 percent of GDP in foreign capital over five years, will be tricky. The People’s Republic’s own growth strategy offers a useful template.
Breakups and spinoffs generally make public companies run better, become more accountable and deliver greater value to their constituents. As Scotland prepares for a historic vote on independence, it’s worth considering whether the same logic might also be valid for governments.
To deliver the EU’s goal of a single capital market will require new regulation in some cases. But in others, regulation put in place in the wake of the financial crisis will need to be revised, because it is getting in the way.
President Rafael Correa’s experiments in modern socialism helped the country cut poverty, grow and prosper. But his investment-led model has run its course. Now he has to soften his defiance of international norms, from the bond market to the World Bank, to keep progress alive.
A UK report suggests merging medical and other welfare programmes for the critically ill. The lessons are global. Recognising that poor health is often just one part of life’s troubles would bring better care. The greatest challenge is to make that care less bureaucratic.
If the knife-edge referendum on Scottish independence leads to a breakup of the United Kingdom, the rump UK will probably quit the EU. Financial markets are finally waking up to the direct impact of Scoxit. But they are not yet focusing on the knock-on effects.
Europe is conducting simultaneous stress tests on its lenders and energy suppliers. An effective regime for gas security requires many of the same elements as financial stability. The main difference is you can’t print gas if Russia turns off the taps.
Politics is sometimes seen as the branch of something bigger – economics. The conflicts in Ukraine and Iraq show the redundancy of such thinking. In more peaceful countries, economic issues may have greater political weight. But not as much as leaders tend to believe.