Scotland's International Trade

Exports:
In 2011, the total value of international exports was approximately €23.9 billion, of which €14.7 is from manufacturing and €7.7 is from services and excludes oil and gas. The top export destinations are the USA, Netherlands, France, Germany, and Belgium. The top exporting industries include food & beverages, manufacturing of coke, refined petroleum and chemical products, manufacturing of computer, electronic and optical products, financial and insurance activities and manufacturing of machinery and equipment. In 2012, the total export sales due to manufacturing grew by 0.8 per cent, but the volume fell by 0.8 per cent.

Imports:
         Scotland imports food and live animals, beverages and tobacco, crude materials, mineral fuels, animal and vegetable oils, chemicals,machinery and transports, manufactured goods and other miscellaneous manufactured items and commodities. Scotland imports mostly from the European Union, North America, Asia and Oceania and Western Europe. Approximately the total imported is 2,600. There has been an increase in imports of petroleum and petroleum products.

Exchange rate
  1 British Pound Sterling = 1.54 U.S. dollars
The exchange rate has been fluctuating since 2009. See graph below of the currency rate vs the year. The rate appears to be stabilizing between 1.25 and 2.

Immigration/Emigration
        Based on Scotland's 2001 census, the total immigration was 92,369. Approximately 15% of the total migrated to Glasgow, 12% migrated to Edinburgh and 6% migrated to Aberdeen. Most migrate from Germany, the Middle East, the United States and Australia. The total out migration was 92, 369. Approximately 13% of the total migrated from Glasgow, 11% migrated from Edinburgh and 6% migrated from Aberdeen.

Relations with other countries

       Scotland is a part of the United Kingdom, so they reap the benefits such as diplomacy, culture, trade and defense. Scotland independently handles foreign and diplomatic affairs. Being a part of the U.K., Scotland is also a part of NATO. Overall, Scotland has a good relationship with most countries. They have not been a major player in any war or conflict recently.

News Summary

News Summary

            Article Title: Scots Economy to lose 1.6bn’ through welfare cuts

Article link: http://www.bbc.co.uk/news/uk-scotland-22104469

Issue:  Welfare cuts will have a dramatic impact on Glasgow, Inverclyde, Dundee and West Dunbartonshire.

            “The Welfare cuts will take more than 1.6 billion out of the Scottish economy and hit the poorest parts the hardest, according to the independent research."

             The government approved the cuts because they are trying to make the welfare reform bill sustainable. The cuts will have a prominent effect on the cities, such as Glasgow, Invercylde, Dundee and West Dunbartonshire, with a large amounts of poverty. The welfare reform is meant to have a positive effect on Scotland's economy as a whole, but individual cities will suffer. The impact on poorer cities is generally overlooked because other cities can afford to deal with the cuts. 

Topic relation to class:

The welfare cuts will hurt the poorest parts of Scotland the hardest. Every working adult in Glasgow is going to lose  650 a year. Glasgow has set a tourism strategy that is expected to bring another 9,000 tourism related jobs and generate  1 billion annually.¹ In class, we discussed how tourism could have a negative and positive impact on society; in this situation in Glasgow, tourism can have a very positive impact economically. Tourism could save Glasgow from a downfall due to the welfare cuts. This article is also related to National Income and its components. The government is doing this to decrease government spending and increase the national income.

Cause: 

The welfare cuts are due to the Welfare Reform of 2012, which is meant to save Scotland approximately  18 billion annually.² The only resolution I can see is to increase Scotland’s income by increasing exports and to continue developing the tourism strategy.  The policy related Welfare Reform is meant to improve Scotland’s economy, but they could implement a policy to offset the negative effects on the cities with higher poverty rates.

           

References

1         1. “Glasgow Tourism Strategy.” Accessed April 20, 2013.

        http://www.visitscotland.org/what_we_do/partnership_initiatives/area_tourism_partnerships/glasgow.aspx.

           

           2.  "Welfare Reform Update - Ac_120116_welfare_reform.pdf.” Accessed April 20, 2013. http://www.audit-scotland.gov.uk/docs/local/2013/ac_120116_welfare_reform.pdf.

McMillian Chapter 4

Reinventing the Bazaar by John McMillan

Chapter Four: Information Wants to be Free

I can honesty say I cannot imagine a world without the internet. The internet is a major part of my day to day life, I use it for homework, to buy books and other miscellaneous items and to find the strangest facts. Information has always been free to me because libraries and Wi-Fi are everywhere. It was interesting to read that Trucker Richard Kirschman was the first trucker to carry a laptop and that he helped a fellow trucker find a load to carry back home. The easy access of information helps businesses to grow, I just assumed that everyone, especially truckers, are always able to access information freely.

Apparently, the level of functionality and prosperity of markets depend on the flow of information. In chapter four, McMillan says, "It [information] wants to be expensive because it can be immeasurably valuable to the recipient." The lower the cost of information, the lower the selling prices are, which is good for the consumer, but it decreases the profit for the supplier. Prices can remain high when the consumer is lacking the necessary information. The flow of information greatly impacts search costs and transaction costs. Search costs  refers to "the time, effort, and money spent learning what is available where for how much." Transaction costs refers to "the cost of shopping around," which can prevent competition in the market. McMillan uses the process of buying a brass urn sold by many producers. People will search for a seller that will sell a brass urn at a lower price than everyone else; if the seller does cut the price and information is free, then the seller can receive a boost in sales. Transaction costs also refers to "evaluation costs", which is basically the buyers ability to determine the quality of the product. In the process of selling a brass urn, the quality of urns being sold can vary from seller to seller, but if the buyer can not tell which is the best, all prices can be marked up.

"Information is the lifeblood of markets", when information does not flow markets cannot function properly. If information does not flow properly, sellers can oversell their products and buyers will lose because they are being cheated. If the buyers are fully aware, then the sellers will have to cut prices and will not make a lot of profit. When markets work efficiently, everyone benefits.

A Fez of the Heart

An analysis of

A Fez of the Heart: Travels around Turkey in Search of a Hat

by Jeremy Seal

I found multiple passages interesting in this Prologue by Jeremy Seal. The most interesting, noneconomic part of the Prologue by Seal was that a city on the shores of the Turkish Mediterranean was named Pomegranate, which means Side in Turkish. I always thought the term Pomegranate referred to the fruit from India. The most interesting, economic part of this was that when tourism first arrived in Pomegranate, the Muslim Turks had so much respect for their culture that the villagers who wore a bikini in town were stoned. Later on, it became illegal for a Turk to wear a fez; they only wore one to attract tourist.

Based on this passage, it seems people can easily manipulate their cultural beliefs to make a few bucks. It only took the Pomegranate people twenty years to change. At first, none of them would accept disrespect.

"Some visitors started to wander back from the beach in their bikinis... several of them were stoned by incensed villagers." (6)

 The Turkish, especially the Muslim Turkish, knew what they stood for and forced those who were disrespectful to change or leave. Their desire to grow economically, changed their viewpoints. In regards to nudity, they went from absolutely no tolerance of it, to accepting all of it.

"Images of mosques and markets, fresh vegetables and leather jackets were punctuated by insisten close-ups of naked breasts until it seemed that Turkey's beaches were nothing but a kind of bosomy paradise" (10).

The change to allow nudity and skimpy clothes, was a huge success for Pomegranate's economy, but they lost so much more.

"Pomegranate's twenty-five bed capacity soon doubled, and doubled again, setting a pattern for years to come."(6)

The people of Pomegranate lost all the characteristics that made attractive and now they are just servants of the masses.Clearly, people are willing to alter their culture to attract tourists and make money.

I believe that it was easy for Pomegranate to make the change because it was a farming communing with an extensive beach. They could not attract tourist with their architecture as easily as the beach could. In Scotland, many travel to see the Glasgow Cathedral because of its architecture and history. The Glasgow Cathedral was built before the 12th century and was known as the Roman Catholic mother church.

Scotland's Tourism

Scotland's Tourism

Scotland entertains visitors year round due to its beautiful scenery, history and genealogy. Many people travel to Scotland to understand their family history. The main tourist season is from April to October. Tourism plays a very important role in Scotland's culture. The major cities depend on tourism for jobs and infrastructure. Tourism employs over 200,000 people and generates over $6 billion. Most of the overseas visitors are from the United States (14%). The rest of the overseas tourists include Germany (11%), Irish Republic (8%), France (7%), Spain (6%), Netherlands (6%), Australia (6%), Canada (4%), Norway (4%), Italy (4%) and the rest of the world (5.57%).

Tourist Destinations - Attractions

• Edinburgh - The capital city, which includes the Edinburgh Castle, Edinburgh Zoo, the Palace of Holyroodhouse, Our Dynamic Earth and the Royal Mile. The city also has three universities.

The Palace of Holyroodhouse

• Glasgow - The second largest city, which includes the Burrell Collection, Glasgow Catherdral, the Glasgow Science Centre and the Kelvingrove Museum. It is believed that the Victorian and Gothic architecture, shopping and universities are big attractions. 

Glasgow Cathedral

• Stirling - A historical town nicknamed the "Gateway to the Highlands", which includes Stirling Castle, the Wallace National Monument and the Thieves Pot/Thistles Centre. 

Stirling Castle

• Aberdeen - Also called the "Granite City", includes two universities. Also found to be attractive because of its gothic architecture.
• St Andrews - Centered around golf, Aberdeen is known as the home of the modern game. The University of Aberdeen is the oldest university in Scotland.
• Perth - A very historic city known for its parkland. 
• Inverness - The administrative centre for the Highlands and serves as the transport hub.
• Ayrshire - Has history with Robert Burns, contains beautiful scenery, golf courses and outdoor activities.

National Parks

-The parks are wilderness areas under private ownership.

• Loch Lomond and The Trossachs National Park - created in 2002
• Cairngorms National Park - created in 2003

Museums

 -Like every other country, Scotland has a very long list of museums. The national museums include:

• The National Museum of Scotland - It is composed of two museums, The Museum of Scotland and the Royal Museum.
• The National Museum of Flight - Located in East Lothian
• The National Museum of Rural Life - Located in South Lanarkshire
• The National War Museum - Located at the Edinburgh Castle

Scotland's Economics Part 2

Scotland Economics: Part Two

Scotland's Statistics and Resources

GDP: $139.7 billion

GDP per capita: $43,492

Life Expectancy males: 75.8 years

females: 80.4 years

Poverty rate: 21%

Literacy rate: 99%

Unemployment rate: 7.4%

Inflation: 3.5%

Natural Resources
Climate
   The climate is pretty similar to that of Michigan. The temperature is moderate between summer and winter and changeable, but not extreme. It is much warmer in Scotland than in places with similar latitude, such as Labrador, Canada. January and February are generally the coldest winter months in Scotland. July and August are generally the warmest months. Similarly to the rest of the world, the temperatures have risen every season and the winter (snow season) has shortened. Unfortunately, it is not very sunny in Scotland, but when the sun does shine there is usually a rainbow somewhere.

Growing Season
     The growing season varies from region to region. The growing season begins three weeks earlier in the North and East Scotland, and more than three weeks more in the West region.


Rainfall
  Scotland has become 20% wetter with an increase of 70% in precipitation, since 2004. The overall totals vary with the region. The highlands of scotland is the wettest with rainfall decreasing from west to East. The rainfall varies from less than 600 mm (23.62 inches) and 3000 mm (118.11 inches). On average the rainfall is approximately 1650.3mm/year (64.97 inches/year).

Agricultural Land
     Land exclusively used for agriculture covers about 6.2 million hectares (~15.3 million acres), which is about 80% of the total land area of Scotland. Most of the land is used for livestock, the rest is used for crop production, farm woodlands, roads, yards and buildings.

Major Rivers and waterways
    Scotland has many rivers and waterways, due to its long coastline, which led to Scotland's involvement in the fishing industry. The most notable are the rivers Clyde, Forth, Tay and Caledonian Canal. The most notable lochs are Lomond, Fyne, Ness, Awe/Etive, Maree, Morar.

Significant Mineral Deposits
   Scotland has a wide variety of minerals. Scotland is rich in coal, oil-shale and ion-ores. For natural building, limestone, sandstone, granite and slate are available. Scotland's primary mineral resource is oil (deposits).

Labor
Size of Labor Force
          2.94 million

Educational System
    Since 1998, the Scottish Parliament has had control over all educational matters. Primary education is free and required, students remain in primary for seven years. The students attend secondary second after primary, where they are taught a wide range of subjects. After that students can attend university, Scottish universities are generally 4 year institutions. Most schools are non-denominational, but denominational state schools and independent schools have been established.

Capital
Industry and Technology 
     Scotland is successful in many industries including:

• Chemical sciences - Scotland is one of the biggest exports in chemicals.
• Creative industries- Scotland is greatly involved with digital media, such as computers, gaming, film, arts, animation. The Scots are innovative and creative.
• Energy - Scotland has committed to adopting renewable energy. They are heavily involved with oil, gas, wave, tidal and wind. 
• ICT and electronic industries- Scotland has been an electronic manufacture for 50 years, dur to this involvement they have become successful producers of technologies.
• Life Sciences - Scotland is a leader in research, development and manufacturing. Great breakthroughs include the cloning of Dolly the sheep and the creation of MRI scanners.
• Textiles -Scotland is the front-runner in luxury textiles and technical textiles.

Infrastructure
    The government has developed a multi-billion pound plan. The plan will encompass housing, health, education and transportation. Transport Scotland is a program dedicated to the improvement of rail networks.

News Summary

News Summary 1: Oil Boost due to Decommissioning Tax Relief

Issue

   Tom Greatrex, the Shadow Energy Minister, said: "The fact that oil and gas revenues are expected to fall by 40% this year confirms that although the industry remains an important part of the Scottish economy, it is a declining and volatile resource."

The fact is that oil is key to practically everyone's economy, but it is a limited resource. The Chancellor George Osbourne has been under a lot of pressure to approve the tax relief. This is not just beneficial for the oil and gas industry. This relief is believed to allow more money to flow and be used for re-investment. This relief is expected to lead to an extra 1.7 billion barrels of oil being generated. The OBR expects that 33 billion British Pound Sterling will be generated from oil and gas.

Relation to class
     This is greatly relate to the topic of supply and demand. The demand for oil will not change, we are far too dependent on it. The supply of oil is greatly affected by this tax relief. The cost of production has decreased. The supply has increased leading to an increase in quantity and a decrease in price.

    Overall, the economy has been suffering, the oil industry is a big contributor. The only resolution that really seems to exist is the use of renewable energy. Unfortunately, the Scottish economy is not in the best place to begin that transition. The government can implement new policies that will discourage the use of gas and provide tax reliefs to renewable energy business.

Scotland's Culture

Scotland Culture: Part 1

Popular Sports
     Scotland hosts many sports and the popularity of each vary's with each region. In general, rugby, netball and soccer are the traditional popular sports. All three sports have many leading names. In rugby, Jaime Benn and Chris Birchall are well known for playing in the Rugby League. In netball, Irene van Dyke and Casey Williams are well known for their shooting averages and defense. In soccer, Bobby Johnstone and David Narey are Scottish Football Hall of Fame inductees.


Music
    Scotland's national instrument, the bagpipes, are used throughout the music instrudry in traditional music, rock, and covers of popular songs. Traditional Scottish music can be seen as folk music.
There music is not that different from the U.S. Popular artist such as Annie Lennox (lead singer of the Eurythmics) and The Average White Band (a band from the 70's) topped charts in Scotland and in the US.

Food
  Scottish food seems exotic based on the names of their traditional dishes, but they are fairly similar to the US. They eat cereal, soup, deserts, and meat just like us, but the preparation and types vary. Scotland is next to the Atlantic Ocean, so fish and seafood are essential. Bridie is a meat pastry/pie which originated in the town Forfar. Cullen Skink is a thick soup made from smoked Finnan haddock, potatoes and onions. Fish and Chips are very popular. The Scots have a sweet tooth just like everyone else, they have many deserts.

Major Religions/ Beliefs
   The major largest religion in scotland is Christianity. The national church is The Church of Scotland also called The Kirk (42.4% of the population are firm believers. The major domination is Roman Catholic Church (15.9% of the population). Islam, Buddism, Judaism are also in existence in Scotland. Minor faiths include Baha'i faith and neopagan groups. The beliefs are diverse, but Christianity is the leader.

National Holidays and traditional customs
   The major holidays include:

1. New Years Day (January 1)  - Include Hogmanay customs (the practice of 'First Footing', having a Ceilidh, and the singing of Auld Lang Syne)
2. Burns Night (January 25) - Celebration of the poet Rabbie Burns with a Burns Supper
3. Valentine's Day (February 14) 
4. Mother's Day (On the 4th Sunday of Lent)
5. Good Friday (March 29)
6. Easter - Families have Easter Sunday Diner which generally includes roast lamb
7. Early May Bank Holiday (May 6) -includes crowning of May Queen, dancing around Maypole, and Morris dancing
8. Spring Bank Holiday (March 27)
9. Summer Bank Holiday (August 8)
10. Saint Andrew's Day (November 30) - A day of honor 
11. Christmas Day (December 25) - The birth of Christ
12. Boxing Day (December 26)

-Many of the holidays and customs are similar to the US because the major belief/faith/religion is Christianity.

Popular TV Shows or Movies
All movie genres are popular in Scotland, like the US. The oldies but goodies inclues Whiskey Galore and The 39 Steps. Famous actors include Sean Connery (The original and best James Bond), Ewan McGregor (known for Moulin Rouge), Robbie Coltrane (Hagrid in Harry Potter films), and Alan Cumming (comedian/actor).

Online news sources

• http://www.scotland.gov.uk/Topics/Economy
• http://www.bbc.co.uk/news/
• http://www.thecourier.co.uk/business/news/
• http://newsnetscotland.com/

Online forums for expatriates

• http://www.expatforum.com/expats/tags/scotland.html
• http://www.expat-blog.com/forum/viewforum.php?id=364
• http://www.expatexchange.com/scotland/liveinscotland.html

Type of government
 Scotland is a part of the UK, so it is a constitutional monarchy, under Queen Elizabeth .  Scotland has a parliament  commonly referred to as "Holyrood," which is composed of 129 members and is unicameral. The Presiding Officer is Tricia Marwick (since May 11, 2011). The Minister for Parliamentary is Joe Fitzpatrick ( since September 5, 2012). There are 16 committees.

Within itself, Scotland has a multi-party system.

1. The Scottish National Party (SNP) - currently holds 65 seats in Parliament, led by Alex Salmond
2. The Scottish Labour Party (LAB) - currently holds 37 seats in Parliament, led by Johann Lamont
3. The Scottish Conservative Party (CON) - currently holds 15 seats in Parliament, led by Ruth Davidson
4. The Scottish Liberal Democrats (Lib Dem) - currently holds 5 seats in Parliament, led by Willie Rennie
5. Scottish Green Party (Green) - currently holds 2 seats in Parliament, led by Patrick Harvie
6. Independent politicians - currently holds 4 seats in Parliament

McMillan Chapter 1

Chapter 1 of Reinventing The Bazaar by John McMillan

The Only Natural Economy - A Market!

A market is defined  as "a meeting together of people for the purpose of trade by private purchase and sale" and "a public place where a market is held." There is much more to that. According to McMillan, there are two crucial defining features of a market.

1. Decision-making autonomy

On page 6, McMillian says "If people lack autonomy, then their dealings are not, by definition, market dealings."

The people need to be free to make their own decision. The people need to be free to decide where they shop, what they buy, what they are willing to pay for a product. If the decision come from a higher authority, then it is not a market transaction.

2. The market is decentralized 

On page 7, McMillan sates " No one is in charge of a market - or, rather, everyone is in charge. This decentralization brings dynamism. Markets empower people."

The market is not geared towards one group of people, it is designed to attract anyone and everyone. Collectively, the people run the market because it is their goods being sold and their appetites being satisfied when they purpose others items.


On page 13

McMillan says, "Markets provoke clashing opinions. Some people revile them as the source of exploitation and poverty. Others extol them as the font of liberty and prosperity."

I have observed these opinions, mostly in the news when a large business is in desperate need of a government bailout. This process of bailing out companies would cause some distrust in the market. Some businesses fail and some flourish. If the business is failing, it needs to just crash, no one should help because it disrupts the natural process of the market. If the government is going to offer bailouts, then every business needs to be given a bailout, not just big businesses with greedy CEO's that receive bonuses that could save the company.

I am not for either side because the market is meant to be competitive. I believe that people should be rewarded financially for being innovative and developing a product people can use. No matter what, someone will always be exploited. As long as I have the option to enjoy farmer's markets, such as the Eastern market in Downtown Detroit, and refuse to go to Meijer, it does not matter.

On page 13

McMillan says, "An absolutely free market is like folk football, a free-for-all brawl. A real market is like American football, and ordered brawl."

The market rules that are important for modern markets include:

1. The market should be accessible. There should be an online option for those who do not have the time or the physical capability to go to a store.
2. The market should maintain competition. Big business should not be allowed to overrun small businesses. Big businesses can afford to have lower prices than smaller businesses, so minimum prices should be set. There should not be government bailouts, if a business is going to fail, then it should fail.

Diamond Article

"Why did Human History Unfold Differently on Different Continents For the Last 13,000 Years?" by Jared Diamond

Diamond's lecture "Why Did Human History Unfold Differently on Different Continents for the last 13,000 years?" explains the pattern of human history on all continents. The differences in 1500 A.D. are the initial cause of the differences now. Explains why Eurasians (the peoples of Europe and eastern Asia) have dominated the world's economy.

As an explanation for why there is a major difference between the continents, Diamond presents to following key points:

1. Animal and plant domestication
Eurasia had a greater availability of domestic animals and plants and is the world's largest land mass. The greater availability of domestic animals meant more edible food for humans, where as other locations have wild habitats which contain more inedible food. Also, since most diseases evolved from animals, the Europeans developed immunities and were able to spread the disease (why the Spaniards easily conquered the Aztec and Inca empires).

2. Geographical location and isolation
The location of Eurasia (on an east/west axis) enabled domestic plants and animals to flourish. The species were able to spread because they encountered the same climate, where as in the Americas (on an north/south axis) some species never spread because they were unable to survive new climates.
Eurasia is more accessible and is closer to the neighboring continents. Where as Australia is the most isolated, smallest continent and does not contain native species. While Europeans were traveling across the world, the Tasmanians were basically stuck.

3. Technology
The most essential technology that allowed Eurasia to flourish was the boat. They also were able to write, which allowed them to draw maps and have an economy based more on capital, rather than barter and trade.

The most important determinants to a society's success include the development of technology, densely populated communities, diverse agriculture, interaction with other continents, and the ability to adapt.

Based on Diamond's lecture, today's global economy is a game of the survival of the fittest (Darwinism). The key points that Diamond presents can be used to rationalize why Western/European cultures are dominate economically. The ideas can also be used to succeed in life. For example, in starting a business, the first thing that should be considered is location. Diamond explicitly states that due to Eurasia's location, they succeeded.