I’ve always said Ritchie doesn’t understand economics

But the Isle of Man has been placed in the top 10 by the World Bank out of 214 international economies in terms of Gross National Income (GNI) per head of population.

Interesting. GNI is of course a cousin of the GDP we’re more used to. National Income rather than Domestic Product. A useful number to think about in places like Ireland where the two diverge quite considerably.

Ritchie then complains:

But the sting is in the tail of the local newspaper story on the issue:

However, the World Bank statistics are not a ranking of personal income, ie the wages in our pockets. And while the economy as a whole is showing strong growth, the domestic economy is struggling.

The strong economic performance has been underpinned by continued growth in a number of business sectors, including e-gaming and engineering.

But while e-gaming showed strong growth of 16.6 per cent in real terms, and engineering up 10.9 per cent, other sectors have fared far less well, with construction down 5 per cent and retailing down nearly 20 per cent.

So in the make believe offshore world the Isle of Man is doing well and the real world down in Douglas things are not looking so good, which does again, of course, fit perfectly with the notion of the secrecy jurisdiction.

It’s time for the Isle of Man to face reality: for all the hype it is a little island captured and abused by the finance industry for its own ends and they do not care in the slightest about the place or the consequences of their use of its ability to legislate in ways that abuse world economic stability that result in hot money flowing through its coffers. That’s what this story relates, as it does for so many of the other tax havens on this list.

Well of course GNI is not the same as wages or personal consumption. The latter is a component of the former:

The Gross national income (GNI) consists of: the personal consumption expenditure, the gross private investment, the government consumption expenditures, the net income from assets abroad (net income receipts), and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the indirect business taxes.

And given the rather larger government we “enjoy” in the UK I would hazard a guess that the difference between our GNI and our personal income is rather larger than it is in the IoM.

Leave a Reply

Your email address will not be published. Required fields are marked *