Britain will find the world economy a competitive place post-Brexit. Its empire may be gone, but its old friends in the Commonwealth may be able to help it out
Right now, the UK needs both friends and friends of friends. Post-Brexit, the UK Government aims to rebuild and make the most of the many long relationships its country has around the world – best represented by the Commonwealth of 52 nations.
The world is a complex jungle of competing interests and issues. Winning advantage is, for now at least, an economic battleground more than the exercise of military might that helped build the British Empire. The game is now all about trade and investment alliances, and here the Commonwealth undoubtedly offers much: shared language, similar legal systems, long established ties of families and businesses. It all makes even far flung Fiji seem oddly like home.
The world, however, has got very complicated. Just a glance at the immense landscape of Asia (which includes valuable Commonwealth friends) shows a constant tension between the US, China and Russia as each seeks to protect its interests or extend its reach.
The New Silk Road
One specific development that shows how the future of Asia may unfold is the New Silk Road; the “One Belt, One Road” strategy of China. The economic battleground I mentioned is being shaped by the capacity of China to fund and build the infrastructure badly needed across much of Central and South East Asia. Perhaps this embodies a modern interpretation of the ancient and wise Chinese military strategy (as per Sun Tzu’s The Art of War) that it is supreme excellence to break the enemy’s resistance without fighting.
The capacity of the UK for successful international trade is undoubted, though the challenge is far greater for SMEs seeking new markets
The transport links (rail, road and sea) China is developing should improve the growth prospects of many countries touched by the country’s engine of economic success; an engine running on infrastructure development, and the resultant resource and trade advantages.
While the EU fights its own internal battles and addresses Brexit, and the US appears largely preoccupied with the issues created by its own president, China pushes hard for strategic business linkage with the resource-rich Asian nations that need infrastructure for economic growth. In Central Asia even Russia finds it hard to compete with the Chinese, who have an extraordinary pace of investment for development and economic collaboration.
Making the most of British know-how
As the UK faces a future outside the EU – a future focused more on its historic role in world trade – it also has to face up to the fast reshaping of international relations, which is changing the opportunities in the years ahead. Gunboat diplomacy is not today an option for the UK, but that does not rule out global trading success.
The capacity of the UK for successful international trade is undoubted, though the challenge is far greater for small and medium sized businesses seeking new markets than for the multinationals that are already well positioned for international business. A vital step for the UK Government will be to create an ecosystem that will help British SMEs enter markets new to them most effectively; SMEs are, across the world, the main future source of innovation, growth and job creation.
Right now, the message from the UK to its subjects and businesses is “Britain needs you!”. It is aimed in particular at its multinationals with global trading know how, and at the many experienced and perhaps retired British corporate executives and public servants who have worked across the world in their careers; they will have gained valuable insights that could now help UK SMEs build their businesses across the world and achieve growth. Can the UK mobilise all this expertise to help its SMEs?
Trading potential in ASEAN
Decades of looking so much to the EU as the easiest and nearest market may have stunted the UK’s development in trade with many of the fastest growing economies on the planet, but the old Commonwealth ties still hold good across many countries who may be very important to the UK’s future.
One region in particular where the UK has huge potential is the ASEAN countries of South East Asia. The opportunity is there for the UK and other Commonwealth countries in the region (Malaysia, Brunei and Singapore) to collaborate in trade across the whole ASEAN region (with its 650 million people) for mutual benefit.
British SMEs can, in the 21st century, still find many friends in the Commonwealth who welcome UK trade with and through them
Britain needs its friends in the region to show it the way and help open doors. But Britain also needs to be humble. It is no longer empire building but goodwill and mutual interest that create prosperity. The good news is British SMEs can, in the 21st century, still find many friends in the Commonwealth who welcome UK trade with and through them. Singapore is famously a place where it is easy to establish a business: it advocates strong principles of the rule of law and business integrity, and is a sophisticated city-state serving ASEAN while also well connected with the Commonwealth. The future success of the UK in global trade depends on business collaboration with friends like Singapore, Malaysia and Brunei.
Building trading networks
The UK opportunity is not just business within the Commonwealth itself (as massive a market as it is, with 2.4 billion people, 60 percent of whom are under 30), but also the extensive wider networks of Commonwealth nations, with whom the UK has immense scope to do business through the gateways of its Commonwealth friendships. It is a win win scenario for Commonwealth member nations who can increase their own economic firepower with UK involvement, knowhow, innovative technologies and finance.
The Commonwealth is both a market and a window on a wider world that awaits the UK: the 93 percent of the world population not in the EU.
Nonetheless, it is a world of challenging and competitive markets that will require all the accumulated expertise the UK can throw at it. This is no longer empire building or anything like it; it is planned and purposeful collaboration for mutual benefit. The UK must get its house in order very swiftly to maximise the opportunities for its many ambitious SME businesses.