There are very few events that are historic and once-in-a-life-time
spectacle. They do have extra-ordinary and very profound effect on the world politics
and economy.
The recent event of the UK voting out of the
European Union is one such landmark occasion. It is undoubtedly the biggest
setback to the European integration project necessitated after the second world
war.
Approximately 52 % of the people (17,410,742) in
the UK voted out, compared to 48% (16,141,241) who wanted good-old association
with Europe. The gap is narrow & minor; however, the democratic decision
has to be respected.
Although UK always had this supremacy notion about
itself, all along. It had different currency Pound Sterling than rest of Europe
that had unified Euro. Not to forget, it ruled over almost 60 countries.
David Cameron had declared that Conservative
government would carry out a referendum on the EU membership, if re-elected in
the 2015 general elections. So last week that referendum took place, result shocked
the entire world. Ultimately he has to announce he will step down as PM, by October this
year.
Strangely the entire Remain-Vs.-Leave campaign
turned in to an exercise of fear-inducing, anti-immigrant, nationalistic jingoism.
Emotion of a huge section of people took over the rationality and inclusive nature.
The world’s oldest democracy stunned everyone, including itself.
Some commentators also saw this as uprising of the
common people or working class against the London-elites. Some claimed this is
an assertion of struggling lots against the well-to-do, university-educated superior
folks.
One thing, very definitely, can be deduced – the exit
of UK from EU is irreversible and has long-lasting after-effect.
Now there is time-slot of two years for the actual
procedures. The new UK government will have a lot on their plate to finish:
- Negotiate new deal with the EU. Terms of exit have to be negotiated with 27 EU nations, each of which, will have a veto over the conditions!
- Commence new changes for major bilateral trade deals around the world.
- Revise its own governance and management because the EU laws and regulations withdraw.
- Tackle the heightened separatist tendencies within the UK. Scotland already contemplating a proactive departure with demand to have another plebiscite! Northern Ireland, could very well be the next.
As for India, there are following apparent
implications in the near-term:
- There are 800 Indian companies that have set up operation in the huge Europe market via the UK. Now they have to deal with the uncertainty and find out fresher ways to do job in the continent. The decline in the value of the Pound could impact the decision making.
- The UK and Europe constitute 30 percent of the India IT industry's revenues. There is no clarity as to what may be in store. There might be very significant changes of IT priorities and business opportunities across EU & UK, impacting Indian IT companies directly.
- There are thousands of Goan people on a Portugal passport in the UK, ostensibly procured to chase ‘good UK life’ dreams leaving India. So when there is no free movement now, and UK tells these to leave, they need to go to Portugal or back home. There are question marks on their prospects.
Most certainly the world politics and economy will
not be the same again, as we identified till now.
P. S. – When I had serious discussions on #Brexit
with my friends and colleagues they had varying opinions. Some said it is too
big, let it unfold and then we will see. Others pointed out the momentous turn
of events has far-reaching consequences and the repercussions may not be that
pleasant, overall.
One more knowledgeable friend had an interesting
take – this is the last call to get rid of the British colonial hangover. And this is the virtual end of the
British hegemony of last 300 years.
Now, that is a different topic to ponder on and
write an entirely separate article for this site, some other time.
