The ‘Brexit effect’
This week, I’m focusing on an international topic and its potential impact on Barbados. You may recall that in 2014, Scotland held a referendum on whether to become an independent country from the United Kingdom (UK). Fifty five per cent of Scots voted NO and, as a result, the status quo remains.
It is intriguing that, this month, the entire UK will vote on whether to remain a member of the European Union (EU). Naturally, opinion polls have swung back and forth between the “Vote Leave” and “Stronger in Europe” campaigns. As the June 23, 2016 date draws closer, expectations are that the polls will become tighter and tighter.
Just like the Scottish Independence vote, there is a two year negotiation period between the UK and the EU should Britons support the “Vote Leave” campaign. Nevertheless, despite that negotiation period, the uncertainty that exists surrounding the likely impact of Brexit, the phrase coined if Britain exits the EU, is real. Hence, the next few weeks and days may see some turbulence on financial markets.
This is not dissimilar to the lead-up to the 2015 general election in Britain when, again, there was considerable uncertainty as to whether there would be a definite result. This referendum will be the third vote taking place within Britain in the last three years where the impact will be felt way beyond its borders and ought not to be taken lightly.
In my view, Scots appear to have a preference for Europe despite the NO vote in 2014 while the English do not. I must admit though that I’m not sure how the Welsh feel about being either British or European. History might play a significant role in the psyche of these three countries that make up Great Britain which may very well be playing out for all the world to witness.
I have sought the views of many Barbadians who
either live or have lived in the UK as to which way they will vote on June 23. Views are starkly mixed within this group with the older folks wanting Britain to exit while the younger persons want Britain to stay. I’ve had some rather frank conversations and the perspectives shared were quite surprising.
No one knows at this time what the full impact of Brexit from the EU would unleash. What is real is the uncertainty that the negotiation period might usher in thereafter. Brits might still come and vacation in Barbados. Barbados will still maintain ties with Britain, particularly in the Commonwealth setting. What perhaps is my concern more than anything else is exactly how our government would likely respond.
I would imagine by now that the High Commissioner for Barbados in the UK and our Ambassador in Brussels and their respective staff will be actively engaging the attention of the British Government and the EU as to the potential ramifications of Brexit. Not to mention the local engagement with the British High Commissioner and the EU Ambassador currently in Barbados.
This is the kind of leadership I would expect of the Minister of Foreign Affairs reinforced by the Prime Minister himself. Of course, after all, this consultation between these stakeholders ought to be followed up by clear and decisive communications not only with Barbadians residing in Barbados but also those currently in Britain as well as across the EU.
Perhaps I might be overreacting but the reason that governments are in place is to make certain that, at a minimum, our bases are covered. I digress to come back to my point. I was living in the UK in December 2006 when Gordon Brown announced what turned out to the restructuring of the Air Passenger Duty (APD) which was to come into effect in 2009 and was able to identify that it would significantly impact travel to Barbados in particular.
In November 2009, when the APD was finally implemented, readers may recall that it appeared as if the current administration was hearing about it for the first time. One would then have to conclude that they spent 2007 almost exclusively on the campaign trail and, having assumed office in January 2008, clearly did not effectively engage the British government on this issue for some time, perhaps until the current Minister of Foreign Affairs was appointed.
I do hope that if Britons decide to exit the EU, that the focus of the current government during much of the two year negotiation phase would be to fully engage both Britain and the EU rather than just focus on winning the next general election in Barbados. The potential fall out for Barbados is too great for our elected representatives to only think of themselves and forsake the country.
If what I’ve suggested isn’t already happening diplomatically, then I implore the powers that be to
ensure that Barbados has the best opportunity in the event that Brexit is successful. We must deploy all available resources to ensure that any and all opportunities that may arise is well documented and executed to the benefit of every citizen.
Diplomacy is often understated in its importance to the functioning of an economy. I hope we have learnt the lesson from the APD debacle. The Barbados Labour Party is engaged on these matters in the event that we are called upon to serve the people of Barbados.
Instead of our government blaming international events and circumstances for our current predicament, we must engage and seek out the best in the interest of Barbados.
Ryan Straughn is an UWI Cave Hill and Central Bank of Barbados trained economist and an endorsed BLP candidate to contest the next general election. Email: email@example.com