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Independent Wales could be 39% richer

02/08/2022

New report by Harvard researchers outlines potential economic benefits of independence for Wales.

Had Wales become an independent small nation within the EU in 1990, and performed on a par with other small nations, people in Wales could today be an average of 39% richer and Wales’ GVA per capita would now be greater than that of the UK.

These were some of the key conclusions form a new report produced by Harvard researchers Adam Price and Ben Levinger and commissioned by Plaid Cymru president Jill Evans MEP, a member of the Green-EFA group in the European Parliament.

The report - 'The Flotilla Effect - Europe's small economies through the eye of the storm' - looks at what has been achieved by small independent EU nations and what an independent Walescould achieve.
The publication contributes to Plaid’s ongoing work in the field of economic development and present some key findings on the potential economic benefits of being a small independent nation. Amongst some of the key findings of the report are:

  • Had Wales become an independent small nation within the EU in 1990, and performed on a par with other small nations, people in Wales could today be an average of 39% richer.

  • Small is richer: being small doesn't hamper a country's prosperity - in fact some of Europe's smallest countries are amongst its most prosperous, by various measures;

  • There is a 'small country bonus' amongst the EU's member states, with smaller countries growing at a more rapid pace;

  • In Western Europe, 50% of the differences in growth between the nations over the last 30 years can be explained by the differences in country size;

  • Smaller countries are frequently the fastest to recover from recession;

  • Four key factors make small nations economically successful - openness to trade, social cohesion, adaptability, 'the macro-politics of micro scale' - big government in a small country.

Launching the report, Plaid Cymru’s Jill Evans MEP said:

"Plaid has a vision for a wealthier, more prosperous Wales. This exciting report reinforces Plaid’s ongoing work in the field of economic development. Plaid’s work in government has already show that the party can take bold steps to ensure that our nation has the right economic conditions to succeed in the coming years. This work will continue as we make the case for greater economic responsibility for our nation in order make our people richer.

"The increasing progress towards independence of many small nations in the European Union, such as Catalonia, Flanders and Scotland, has put this issue firmly on the political agenda. The debate on Scottish independence, in particular, has huge implications for Wales. So it is essential that we have a real debate on how we build a successful and sustainable economy. I commissioned this work as a factual contribution to that debate.

"The report shows quite clearly that the size of a state is no barrier to economic success and sets out the potential of an independent Wales. It provides further evidence that we have nothing to fear from independence. Rather than being a hindrance to success, independence can be its catalyst."

Author of the report, research fellow at the Center for International Development at Harvard, Adam Price added:

"We've looked in detail at what has been achieved by small independent EU nations, and what an independent Wales could achieve and the results are far-reaching.

"People in Wales could be around 39% richer, and the Welsh economy could have grown by 2.5% a year had Wales achieved independence around the time of the fall of the Berlin Wall and followed a similar patter to other similar small nations. In contrast, regions or countries which have rejected independence have performed poorly.

"This report shows quite clearly that size is no barrier to economic success, and in fact, that a small nations like Wales could benefit greatly from independence as many other small nations have done over the past decades.

“We discovered that there is a considerable 'small country bonus' amongst many of the countries we studies, with smaller countries growing at a more rapid pace and recovering quicker from recession.

"Opponents of independence and further devolution have often misused the current economic problems to suggest that small countries would struggle for survival in tough economic times. Many conclusions of this report blow these assumptions out of the water.

“Far from hampering a country's prosperity –being small can actually lead to greater economic success and greater prosperity. When it comes to charting the best economic course, small countries are the most adept and that is reflected in their wealth and well being. "