Exclusive: research shows Scotland would have benefitted more from independence than devolution

Since 1990, 34 territories have become independent countries. Many of these new countries were formed as a result of the dissolution of the USSR and Yugoslavia during the 1990s. Others formed as a result of independence and anticolonial movements.

The 1990s was also a significant period for Scotland, with the reconvening of the Scottish parliament and the transfer of devolved powers. This article sets out to compare the different experiences of these newly independent countries and Scotland as a devolved nation, analysing the various currencies that have been adopted, their GDP growth rates and their successes as independent countries.

This will allow us to determine whether Scotland would have benefitted more from independence in the 1990s than from the limited powers obtained through devolution. We will also be able to offer a hypothetical picture of what an independent Scotland may have looked like, including its potential currency and the country’s probable financial situation.

EU members

First, let’s look at the countries that have joined the EU since declaring independence, and examine the currencies that have been adopted and the impact independence has had on their GDP. Of the countries formed since 1990, eight have become members of the EU, including Estonia, Latvia, Lithuania, Croatia, Slovenia, Germany, Czech Republic and Slovakia.

However, not all of these countries have chosen to employ the Euro. For example, Croatia and the Czech Republic introduced their own currency after independence. In fact, in Croatia the National Bank was formed in 1990, before the country was actually independent, and the new Croatian Dinar followed in December 1991. In May 1994 the Croatian Kuna replaced the Dinar, as part of the government’s stabilisation programme that followed Croatia’s involvement in the Bosnia-Herzegovina war. This stabilisation programme and the introduction of the Kuna brought inflation down from the 1993 rates of 1616% to 1.0% in 1994 and 3.7% in 1995. Since the introduction of the Croatian Kuna, it has remained stable and has effectively countered inflationary expectations.

Employing the Euro after independence is not a necessity and countries can join the EU without doing so

Some of the other newly independent countries adopted the Euro further down the line after independence and several years after joining the EU. For example, Estonia gained independence in 1991 and established its own currency  - the Estonian Kroon - just 10 months later. Estonia joined the EU in 2004 but did not adopt the Euro until 2011. This highlights that employing the Euro after independence is not a necessity and countries can join the EU without doing so.

Let’s look at the average GDP growth of these EU members since declaring independence.

Country Currency Average GDP growth since independence (earliest data available)
Estonia Euro 3.7%
Latvia Euro 3%
Lithuania Euro 4.1%
Croatia Croatian Kuna 1.9%
Slovenia Euro 2.7%
Germany Euro 1.2%
Czech Republic Czech Koruna 2.4%
Slovakia Euro 3.7%

These figures show that on average the newly independent countries that have joined the EU have a GDP growth rate of 2.84%. Those that have joined the EU and adopted the Euro have an average of 3.07%. Those countries that are members of the EU but have their own currency averaged at 2.15%.

Non-EU members

So, what is the currency situation and average GDP rate in newly independent countries that are not members of the EU?

Country Currency Average GDP growth since independence (earliest data available)
Armenia Armenian dram 5%
Azerbaijan Azerbaijani manat 4.7%
Belarus Belarusian ruble 2.4%
Georgia Georgian Iari 0.9%
Kazakhstan Kazakhstani tenge 3.6%
Kyrgyzstan Kyrgyzstani som 2.4%
Moldova Moldovan leu -0.3%
Russia Russian ruble 1%
Tajikistan Tajikistani somoni 4.2%
Turkmenistan Turkmenistani manat 7.1%
Ukraine Ukranian hryvnia -0.7%
Uzbekistan Uzbekistani so'm 5.1%
Macedonia Macedonian denar N/A
Bosnia and Herzegovina Bosnia-Herzegovina Convertible Marka 7.1%
Namibia South African rand or Namibian dollar 2.9%
Yemen Yemeni rial 1.2%
Eritrea Eritrean nakfa 3.6%
The Marshall Islands U.S Dollar 1.2%
Micronesia U.S Dollar 0.1%
Palau U.S Dollar 0.1%
East Timor U.S Dollar 2.4%
Montenegro Euro 2.5%
Serbia Serbian Dinar 2.4%
Kosovo Euro N/A

This data suggests that across most of these independent countries, a new currency has been formed. The average GDP growth since independence across all of these countries is 2.68%. Among those countries that have created their own currency, it is 3.09%. This suggests that the introduction of a new currency after independence may  benefit GDP growth rates.


Since the 1990s Scotland has held certain devolved powers. However, unlike the countries that we have examined throughout this article Scotland has not obtained full independence. As a result, it  continues to use the British Pound as its currency. So, how does Scotland’s annual GDP growth compare to the newly independent countries that we have looked at? Since devolution was introduced until the  present day, Scotland’s GDP growth rate averages at 1.4%. This is considerably lower than the averages we have seen across the many newly formed countries, both within and outside of the EU.


Ultimately, this article has highlighted that different routes and options exist for newly independent counties with regards to currency and EU membership. Many of the countries that have been analysed in this article have shown great success after independence, particularly in terms of GDP growth and developing their own currency. Overall, it can be suggested that full independence would have contributed to greater GDP growth for Scotland than devolution.

By Richard Walker