Recently I attended the Future Investment Initiative in Riyadh, nicknamed appropriately ‘Davos in the Desert’. This excellent event, typical in the Covid era, was a combination of in-person and virtual attendance of world leaders and 10,000 participants.
The ‘ah ha’ moment for me was understanding one of the key planks of Saudi’s long term, post-oil plan. Their single-minded focus on creating two big cities for the future is already well documented. I had heard it before. Doubling Riyadh from a 7 million city to a 15 million city through investment in six industrial parks and diversification into various non-oil industries including tourism; and their radical investment in a brand new city in the desert, NEOM, through an investment of $500 billion. We knew from plenty of other studies that urbanization explains up to 85% of all wealth created in the world over the last 50 years. On a very small scale, Inverness is a case in point during the 1990s, growing faster than Dublin at one point.
But it’s the second plank that caught my eye. The desert land in the NEOM Region, owned by the Kingdom of Saudi Arabia, is in the asset books essentially at zero value. Who would dare value a piece of empty desert at anything more? Now that the State initiative has been announced, by definition the value of that land will rise and that revaluation can fund the investment required in the first place!
How is that relevant for a mature country such as Scotland which doesn’t have a desert? Well first of all we do have a desert, the so-called ‘wet desert’, that we refer to in our book, Scotland 2070- Healthy Wealthy and Wise. A vast area of land with a mix of subsidized farming and low productivity hunting, fishing and shooting.
Secondly, this land, about half of Scotland’s land mass, is seriously undervalued versus the potential from long term investment in environmentally attractive forestry. The potential is for 5 billion trees, which by most measures would require an investment approaching 50 billion pounds over a long period of time. No one individual or company has so far seen the potential for value enhancement or has the appetite to grasp this opportunity. Politically this is a hot potato that no politician or leader has taken to their heart yet. A chance to revalue the whole of Scotland!
So, we raise this simply as a question for debate. Why does the Scottish Government not seek to raise the seed capital to buy up all the land, trigger a wholesale investment in the forestry and wood based economy that could represent about 3% of the GDP of Scotland (about half of oil’s GDP) funded by the revaluation of its land over 50 years? A massive revaluation of the wet desert. Why not?
Is it political dogma, a fear of state sponsored enterprise, a resistance from vested interests or lack of imagination amongst current politicians? Why is it not even being debated? A post-Covid recovery plan of the first order. Certainly much more significant than some of the trivial suggestions we have seen.
We will leave you to decide on how to answer that question rather than jump into the politics ourselves. After all, our book is entitled Scotland 2070- Healthy Wealthy and Wise. An ambitious vision for Scotland WITHOUT the politics.