When Britain left European Union in 2021, she was not departing from a single market with a custom union but from a landmass of great business opportunity. Post mortem of Brexit in terms of geoeconomics indicates it was a colossal mistake. Details follow:
The pro-Brexit campaign was anchored on nothing other than sovereignty factor and harping upon the past glory of a nation that ruled the waves and that too in her realm the Sun never set. Hence, the British arrogance of second to none along with never to be dictated by outsiders, in this case the Brussels Bureaucracy. I do reminisce how Lord Canning played an outstanding role in shaping British policy towards Europe in general and with the Concert of Europe in particular.
But Brexit was a false construct based more upon the past glory bereft with any understanding of the way geoeconomics affects the island nation. Here is the rubbing: once as member of EU, England was paying a net £ 13 Billion as her contribution to the EU Secretariat. After Brexit, net loss encountered as non-EU nation is estimated as £ 27 Billion. Going alone, Britain lost a large chunk of £ 32 Billion in her GDP since 2021. In current terms GDP of £ 2.56 Trillion lends to GDP Per Capita of £ 37,371/-
Even though England negotiated a watered down free trade with EU, non-trade barriers had a big toll due mainly to cumbersome procedures applied by Brussels. This was too much for small & medium firms that exported their goods across the English Channel. There is silver lining, of course. While exports of goods moved in the southerly direction England had its handful in services sector such as insurance specifically marine, advertisement, and advisories, not to forget intermediation in arranging financial and other capital market deals.
Trade loss both ways i.e. import & export went down 15% in value terms that cannot be offset by actual and potential income generated by the services sector as a whole. This factor alone threw England off its balance when it comes to wielding geoeconomics power outside her shores. The sad part is, diversion of trading relationship with major economies outside Europe did not help much in uplifting the loss of status-ante. Australia and New Zealand were two key nations that were identified in the British Commonwealth. There again these two countries have brim-full of beneficial trading relationships in North & South Asian Region.
A large immigrant population on one hand and the rapidly aging white majority on the other robbed the productivity factor in a big way. In the absence of strict supervisory surveillance of Brussels Bureaucracy, British productivity overall nosedived in comparison with Germany for example. A safe estimate is about 3% drop from pre Brexit days to post Brexit period.
The good part possibly is that Britain is now more sovereign than under the EU Supervision. The riveting part is people in England are not happy with the state of affairs. Geoeconomics compulsions underpin England to be part of an extended family of nations. A recent survey found that if an option is given to Britain to re-enter EU more than 55/% of the Britons would vote aye!
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
