We could be a Third World nation by 2030, says expert

A SENIOR economist has warned Scotland is in danger of becoming a third world economy by 2030 because of spending mistakes and ”over-government”.

Douglas McWilliams, chief executive of the Centre for Economics and Business Research, blamed a catalogue of money-managing mistakes including the ill-fated Edinburgh tram project for Scotland’s economic woes in a damning new report.

He also claimed many of Scotland’s economic problems stem from lack of entrepreneurship and over-government.

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Mr McWilliams has revisited a similar highly-controversial forecast he made in 2001.

Then, he claimed Scotland would slip to Third World status by 2050. Now he has revised that time-line to 2030.

His most recent report has attracted strong criticism from the Scottish finance secretary John Swinney who dismissed it as “a deeply-flawed report which contains a series of basic mistakes”.

In his study Mr McWilliams said the Edinburgh festivals added between a fifth and a quarter to the population of the city.

He argues that Scotland’s economy has grown very slowly over the last ten years. The economist said, that “over the past ten years living standards in Spain and Greece have largely caught up with Scotland”.

He added: “Korea is set to do so in the next ten years and Poland and Turkey have been catching up very rapidly, though they still have much further to go. At present rates, though, they will catch up by 2030 rather than 2050 as I had predicted ten years ago.”

Backing up his claims that Scotland’s economic problem remained lack of entrepreneurship and over-government he highlighted that in Scotland in 2009 there were only 2.6 new businesses started per thousand of population whereas for the UK as a whole the figure was 3.9.

Mr McWilliams added that the identifiable public expenditure in Scotland was 54.8 per cent of gross domestic product (GDP) in 2009/10 compared with 47 per cent in England.

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Comparing the spiralling costs of building the Scottish Parliament with the more recent Edinburgh trams, he said: “Now the equivalent scandal is the Edinburgh tram system. The system has cost £525 million so far and caused untold traffic jams.

“The current projected cost is £750m for just one line from Edinburgh airport to Waverley Station.”