Scottish Futures Trust

To avoid having to pay usurious rates of interest to private lenders, in order to fund public sector expenditure on infrastructure projects, it is reported that Alex Salmond is looking to borrow from a Sovereign wealth fund to bridge the gap.

So why should borrowing from the Qataris be better than borrowing in the marker?

Well, the interest rate would normally be expected to be slightly lower, which is normally attractive.

The difference is that in this case the loans (oops we can't call them that) have to be Islamic compliant and will actually charge no interest. Instead, there is a non-interest return on the investment. The difference between the Western and Eastern banking systems appears to be largely semantics, and the necessary forms to prove that the appropriate systems are being applied.

All this does is underline the shortcomings of devolution and the problems that will face Alex Salmond as he tries to square the election promises with the absence of money to deliver. Much the same difficulties as is facing Labour in Westminster, only on a much smaller scale.

Is it all a good idea? In my opinion it is not, as it leaves Scotland more exposed to the vagaries of the global marketplace, and risks control of key assets being lost to Scotland. And who is to say that the Qataris will not sell the debt to a third party?

It is just another flavour of PPP/PFI, and as such is nothing more than HP on an enormous scale.

But, the devil will be in the detail, and it might just be the only game in town.

As Burns might have said:

We were bought and sold for Qatari gold!
Sic a parcel of rogues in a nation!