In the current world, there is hardly a country that comes close to the cultural and political significance that Britain manifests. Britain has been at the core of every major world event. From the Medieval ages, the Kingdom was an if not influential power in its European backyard. This influence spread out into the days of the Renaissance and up to the Industrial Revolution. As Colonialism began to take root in the days of Industrial growth, Britain saw a chance to take advantage of its Naval prowess and use it to gain access to resources it otherwise didn’t have. The British Isles are quite resource-deprived and the massive industries could not do without access to these resources, which much of the then “uncivilized” world happened to have in superfluous supply. Consequently, Britain ended up invading many of the countries in the regions of the world, and to date 9 out of every 10 countries in the world today have been invaded by Britain.
Britain emerged at the victorious end of both World Wars. However, by the end of the Second World War, her influence was waning, for several reasons. Firstly, the emergence of the East-West divide between communism and capitalism was shifting all the focus away from Britain. Furthermore, decolonization efforts were causing Britain massive losses of access to the resource-rich ends of her empire. However, Britain took advantage of the diverted attention and managed to diversify her economy from being Agrarian and Manufacturing based to becoming a service-based economy that adopted mechanization; hence improving industry efficiency. Part of this shift in perspective can be attributed to Margaret Thatcher and her pursuit of privatization, particularly in the 1980s.
Britain’s history with the European Union stems from her integration into the Common Agricultural Policy of the European Union in the 1960s. This arrangement with Europe worked since the demand, especially for agricultural goods, was met with supply from elsewhere in the union. Therefore, Britain could focus on developing other sections of its economy like its aforementioned service-based economy. London is today the prime location for financial services from the rest of the world. Most if not all major foreign banks have their services based in London. The International Stock Market is also centered between London and New York putting London at the core of the International Securities Market. This is also helped by the fact the Pound Sterling is a major international currency.
By becoming a member of the European Union, Britain opened up her boundaries to people of all walks of life from Europe and by extension much of the world. Britain has better standards of living in comparison to many countries, especially in Eastern Europe and the job quantities available within her borders are immense. In addition, Britain also needs the cheap labor that comes with immigrant employees, and her economy continually grew ever more dependent on it. therefore, when Brexit came in 2016, it was the culmination of a national movement, especially from the right to British Nationalism; for her to free herself from the shackles of European dependence. According to Donald Cummings, a chief pro-Brexit campaigner, Brexit was fueled by three main agendas: The Immigration issues from Europe and beyond, the European bailout of Greece, and The Global Financial Crash of 2008 which had led to a lack of confidence in banks and the governments. The lack of confidence in the European Union was particularly due to reduced confidence in the European 4nion as a regulatory authority, sovereignty as well as trade policy issues. Nonetheless, Brexit managed to drive over the left-right divide pitting two factions who “hated each other” against each other.
in the wake of Brexit, there have been several takehomes for everyone involved. Firstly, the service industry is bound to take a massive hit, especially in the private sector. the hotels and catering, air travel, distribution, software, consultancy as well as advertising are all bound to record losses. furthermore, the cultural significance associated with tourism i.e. the museums, castles, and theaters is bound as Britain’s influence in Europe continues to fade away. trade volumes are also bound to reduce especially as a result of the reorientation of the trade trajectory of the country. Britain is also expected to face increased tariffs because of its separation from the rest of Europe and this may force her to enter into individual trade agreements with specific European nations. Reduced foreign direct investment is also to be expected. Britain has been continually been the biggest recipient among developed states, with close to half of this investment coming from Europe. however, with the appeal of being an ‘EU state” gone, the attractiveness of Britain to investors is expected to go away with it. Economic productivity will also take a downturn as a result of reduced foreign direct investment as well as increased trade barriers. The loss of migrant workers especially given how dependent Britain had become on them is expected to cause massive supply chain issues as was witnessed towards the end of 2021 in the trucking sector. Britain had to keep her army on standby as truck drivers to help in availing important goods to the shelves of many stores. Finally, the value of the Pound Sterling will also deteriorate due to an increase in imports, hence an increase in the cost of living. However, the reduced value of exported goods due to the reduced value of the currency could also be used to stimulate economic growth.
All in all, Britain’s economy is an interesting situation. it has been in a similar position before, particularly in the 1960s when it seemed undecided on whether to be part of the European Economic Community (EEC), the predecessor to the EU. the economic instabilities of the time, as was the Oil Crisis, was what pushed Britain to pursue Economic Cooperation to secure her economy. Nevertheless, Britain abandoned the EU in the midst of a world economic crisis, the COVID-19 pandemic, and this leaves her exposed as many other countries are pursuing interconnectedness as a means to recover from the Economic crisis brought about by COVID-19. it remains to be seen what the future holds for Britain as she seeks to reorient herself to becoming the world superpower she once was, vis-a-vis finding a foothold to secure her shrinking economy.
Leave a Reply