Scotland is very dependent on exports and inward investment to create and safeguard jobs. We export more per head than the rest of the UK, and even more than Japan, however, the export base has narrowed dangerously.
Three industries now dominate, with electronics, whisky and chemicals accounting for 77% of all Scottish exports.
Around 80 000 people are employed in inward investment manufacturing, and over 17 000 people are employed in call centres which serve the UK and Europe.
In addition, Scotland's population has changed little over the last 50 years, compared to a 20% growth in England. A small domestic market, and therefore limited demand, means that Scotland is obliged to export goods and services and is therefore especially vulnerable to changes in global economic trends.


The spate of job losses in the Borders, Ayrshire and Fife in 1999/2000 all stemmed from global economic developments. 500 jobs were lost at Wrangler plant in Ayrshire when production was switched to Eastern Europe; the financial crisis in Asian economies saw both the mothballing of a Hyundai plant in Fife and the closure of the Lite-On factory in Lanarkshire. Over one thousand textiles jobs have been lost in the Borders due to international restructuring of that industry; a further thousand electronics jobs were lost as part of the printed circuit board industry's restructuring to adapt to international competition.
Large scale job losses such as these have severe coonsequenses for local economies.

The international relocation of industry, especially shipbuilding and other heavy engineering, has meant unemployment for many semi-skilled and unskilled workers.
Many of the jobs replacing those lost have been service sector jobs characterised by low pay, part-time and insecure work. Forms of monetarist and related policies, persued by UK governments over the last 20 years were combined with privatisation strategies and industrial relations legislation to favour the employer in the labour contract.
The resulting job losses, cuts in public and welfare spending, and cuts in benefits have all reinforced the pre-existing problems of deprivation and poverty.

In global terms, Scotland is not a poor country and at a global level Northern poverty is not on the agenda mainly because the scale of poverty in the South is so much greater and so much more visible.
However, poverty here is very real for the people who experience it and we need to learn to make more of an issue of it - in public terms, internationally.
There is a lot of shame attached to poverty in this country but we can't afford to let that, or anything else for that matter, stand in the way of getting our voices heard.

There is a view that people, even governments, are powerless in the face of globalisation. While it is true that governments' controls over economicpolicy has been weakened, there is a lot that can still be done.
Although taxation or staff costs, for example, are important, they are not the only considerations for firms. Firms need access to reliable suppliers, trained labour, reliable utilities, and an efficient transport infrastructure. They also need political stability. Firms can then be heavily dependent on governments to provide their necessary infrastructure, regulatory frame works and communications networks and maintain the flow of utilities.
This gives governments a certain amount of leverage.

Swedish policy provides an example of what can be done. Like Scotland, Sweden is a smallish economy on the physical perimeter of Europe. Sweden is also an open, internationally orientated economy with limited domestic demand. Yet it has been able to attain more generous welfare provisionsand lower levels of poverty than Scotland. It should be borne in mind that the welfare model adopted in Sweden and other Scandinanvian countries was born not out of altruism (unselfish concern) but to ensure and maintain their internationally competitive edge.
These countries recognised that cheap labour/low public spending strategies only lead to increasing poverty, and modern developped economies cannot compete on such terms.
In economic terms, policy responses for tackling poverty and social exclusion do not lie in the free market model and the "race to the bottom".

"There is little reason to believe that integration in the international economy per se would force national welfare states down to their lowest common denominator... The assumption that market integration will necessary exert a strong downward pressure on social provision is based on assumption that the competitive advantage of low wages will be more important than the advantage of capital intensity and highly qualified labour."

The Scandinavian route requires strong political commitments. The pressure to reduce wages and social costs will be high but governements should see poverty reduction and inclusion measures as central to development policy and not something that should be cut in time of crisis.
However, the British government and Scottish Executive seem to be pursuing a contradictory policy - wanting the benefits of poverty reduction, while being unwilling to take the step of building up the full infrastructure necessary to support this option.

Globalisation is now an inevitable feature of our lives. Countries like Scotland should invest in the infrastructure, services and social capital needed to support those adversely affected by globalisation. So, what policies are needed to achieve this?
Reducing poverty will not be cheap, and significant resources must be provided if it is to be tackled effectively.