Darjeeling Worries over Scotland Vote

Scotland is readying itself for a historic vote on independence. Financial concerns are high on the list as questions about currency, the future homes of Lloyd’s and Bank of Scotland and other economic concerns are at the forefront.

Scotland Independence VoteWith Europe and the UK as significant export markets, tea growers in Darjeeling are feeling the uncertainty of the situation.

On Thursday, Scottish voters will decide on a referendum that could separate Scotland from the rest of the United Kingdom. Originally seen as an unlikely prospect by many, nationalists have pulled the vote to a differential of only 4%. Concern is high enough that George Osborne, Britain’s finance minister, is sitting out next weekend’s G20 summit to stay in England.

As the election nears, the British pound and euro have both lost value. Reuters reports that more than $27 billion in investments were taken from the UK last month alone, numbers not seen since the 2008 Lehman crisis. The currency changes impact Darjeeling and other exporters in two ways. First, demand for product drops as economies become more uncertain. This has been seen with lower than usual trading at auction. Second, exporters are now being hit with a second loss as they convert their Euro and British pounds to rupees. Concerns are particularly high since production volume in the region was already hurt by the low rainfall in the spring.

Source: The Economic Times