It was another usual hot summer day in Jaipur. I was sitting before the TV with a cup of my favourite green tea when the news of Brexit- Britain leaving EU –started pouring in. I was not at all amused. It was on predictable lines and I had already spoken about it a few days ago to my audience. But the big question is – Why the English voted for the exit?
Why Britain voted for the exit?
There are basically three reasons that may have forced the Britons to take this decision:
- The anger of the British people against the immigration from Syria
- The economic slowdown in England due to globalization
- Their anger against the loss of control of the British people over their own nation
But it is also important to keep in mind that Scotland and North Ireland have voted for the ‘remain’ which means that sooner or later Britain is destined for a split. I am really amused with this thought because it reminds me of Winston Churchill who tried his level best to divide India but could not. Now Britain is on the same course. History not only repeats itself but sometimes takes revenge also. Really amusing!
Who is the winner?
At this point of time I would not like to speculate whether Britain is winner or not because it will depend on how they negotiate their exit and how they manage their country after the exit. But it would have been better if they stayed with EU because ‘divided we fall, united we stand’. With EU they had lot of clout in trade negotiations. After the exit the small economy of Britain may lose that competitive edge. Today, no one wants to support a weak economy.
Vladimir Putin is a clear winner
After successful Syria mission, where unlike US and its NATO allies he achieved most of his goals and withdrew back within 6 months, he has established himself as a decisive world leader. Obama and his NATO allies are still struggling with IS. If Syria is his reply to NATO then Brexit is his answer to EU. To appreciate my point you will have to dwell deep into history. Remember the Warsaw Pact (9 years after World War II) which was the response to NATO (formed in 1949). It was a defense organization of Soviet Union and 9 other nations of Europe. This organization was disbanded in 1989 (officially in 1991) after which we also saw the disintegration of USSR (in December 1991). The countries like Bulgaria, Czechoslovakia, East Germany, Hungry and Poland all joined NATO leaving Russia alone. When Putin took reins of Russia from Boris Yeltsin he first concentrated on strengthening his country and then at the most suitable opportunity taught lessons to both NATO and the European countries. It is a sweet music to him and to all Russians. The entire ‘split EU operation’ was highly covert. Putin did not speak even a single word about Brexit. Here is a lesson for Indians too- Invest in a decisive and powerful leader.
For some Trump is also a winner. But to me Trump has only proved that he can grasp the pulse of the people pretty well unlike Obama and Clinton who could not anticipate this in spite of being in power. This may prove costly to Clinton in the coming US elections.
Impact of Brexit on India
Like a true Indian my answer is – very little immediate effect. As of now they sell only products worth $460 billion. The top products are machines, precious metals, gems, engines and pumps, Pharma products, aircrafts, organic chemicals and plastic etc. I do not think they have any competitive advantage in these products. The only area in which Britain excels is financial services. Bankers will now move to other European countries, Dubai or Singapore. This will also not have any phenomenon effect on India. The only impact I see is in the long run when the anti immigrants sentiments among Britons will be strong and more stringent laws are likely to be passed. So NRIs beware.