Cameron fell on his own sword – That’s how CNN described it soon after the resignation announcement of David Cameron . It’s a kind of harsh saying on a man who gave a chance for the public opinion and decided to leave once his ideology defeated. It may seems like a perfect democratic political scenario, but when considering the facts like people googling EU after the poll results and age statistics of the vote distribution I think Brexit wasn’t an ideal thing to put on line for direct democracy. Things like Brexit could have an impact for generations where an ill informed decision by general public potentially could make it worse . It’s more like having a referendum for declaring war on a country / entity . So the statement of CNN is logical even thought it’s not the nicest thing to say. Well politics isn’t a nice thing at all. Regardless of how it’s already happened, below is a brief analysis on the potential impact of Brexit .
The long term impact is an unknown to all. Even the top economist only could speculate. But short term impact already visible. Things could turn around in future but for the moment all I can see is a negative impact on Britain and world
The supporters of Remain campaign mainly argued on the impact of the economic aspects which proven to be valid by the things happening(as per media reports ) at the moment. I ll summarize few of them below
- Pound plunged to lowest since 1985: Not an unexpected thing, more import question is will it recover and when
- Stock markets are shocked and some reports speculate a $2 trillion loss overall: Uncertainties are not market friendly at all, the scale of the Brexit its really hard to see the future.
- British companies look for huge losses – ex Land Rover could face $1.5 B losses
- Multinational companies planning to leave or downsize : Companies that operated in Britain as the center of entire Europe need to reorganize. So it’s fair to assume a smaller operations in UK while opening new venue at another country for European Union
- Economists predicts that UK might push to recession: For UK a recession might be inevitable at least short term, but as per reports it could be a huge setback for world economy which just reviving
Britain is the most important ally of United States, which practically defined the course of human race in last century . Even though US not happy with Brexit they will have to work out the relationship for their own good . But however this will create additional overhead for US having to deal with two entities on various global issues including Russia
Things could get worse with the possibility of total EU breakdown which now is a great possibility. As soon as the Brexit concluded calles for similar referendums were seen in other countries as well. If those calls comes in to the reality, it could have an impact on political balance of world and west might have hard time handling issues in their favor
Unlike the economy where things need to be shaped b y market forces, negative impact on politics might be mitigated by other already established mechanisms like UN security council , NATO in case of an emergency
What’s in it for us
Sri Lankan government officially supported remain capaning stating that tax benefits we could get from EU not being applied to exports for UK . In addition to that concern a potential recession in UK will hit hard our exports market specially in garment and tea sectors .
Some argues that Brexist would open the labor market for people from outside world as Europeans will no longer enjoy special benefits. This is a valid argument in theory but I seriously doubt the practicality.
As said earlier most of things are uncertain at the moment , yet a big impact on UK economy is a real possibility . I think political impact would be lesser than anticipated as everyone got more to loose being completely isolated. Sri Lanka will have to face trouble in exports and for other speculations we need to wait and see