One of the leave campaigns leading arguments for the UK to separate from the EU was that it was a major world leader and the world’s 5th largest economy. They argued that the UK would be robust enough to survive and even to thrive without being part of Europe.
But, is this actually the case. We know that the value of the sterling dropped after Brexit, which affects the influence of the UK economy on the world market. But how did Brexit affect the position of the UK as a world leader? Cashfloat, a payday loans direct lender, looks at the position of the UK as a world leader after Brexit?
The size of a country’s economy is usually based upon its GDP, that is, Gross Domestic Product. In plain language, this means the overall value of the services and goods produced by a country. Comparison with other countries is always decided using a common currency, and this is always the US dollar.
In 2015 the GDP of the UK was calculated as £1,865 billion which equates to $2,849 billion using the market currency exchange rates. These figures put the UK as 5th in the world ahead of the emerging countries like Brazil and India. The country was also ahead of France but behind the biggest European country which was Germany and China, which was second after the USA.
Almost as soon as the referendum results were in, the UK dropped down a place in the standings of world economies and landed in behind France to become 6th. The impact on sterling was immediate, meaning that the UK’s goods and services were suddenly worth a whole lot less. While not tremendously harmful, this is the first time this has happened since 2014.
The standing of the UK as a world leader is not just about GDP. As a member of the UN Security Council, NATO and the G7, the UK still has a significant influence in the world community.
A Permanent Member Of The UN Security Council
The UK is one of only five permanent members of the UN Security Council. Even if there is a break-up of the Union, with Scotland deciding on independence, this situation is unlikely to change.
Remaining Part Of The G7 Council
The G7 is a council of countries that represents another exclusive club. Member countries include Canada, France, Germany, Italy, Japan and the US as well as the UK. The G7 is a representation of at least 64% of net global wealth.
If Scotland departs from the United Kingdom, then the UK would become more of a junior partner than a section head of the council. Furthermore, if the UK were to be removed and replaced by another country as a result of losing its triple AAA credit rating, a significant part of the UK economy, around 10%, could disappear with it.
NATO And The Special Relationship With The US
Being part of NATO and as one of the US’s closest allies since World War 2, has been vital to the place of the UK in world affairs. Furthermore, Donald Trump is in favour of Brexit. This is likely to enhance relations between the UK and the USA.
There is no question that the UK will remain in NATO but while in the past the country has been seen as a way to bridge the gap between Europe and NATO this will no longer be the case.
Confident Brexiteers expect the loosening of ties with Europe to create a situation where the UK is free from the influence of a major power. However, this also means losing the power that was inherent from being a part of a source of great power and influence in the world i.e. the EU.
While part of the European project the UK was very influential. They were often in the driving seat when it came to decisions, whether those decisions were for economic or political reasons. So, the UK will still lose its formidable position as a significant political power in the EU, although they will still have power as an individual country.
When the UK lost its empire, it was still considered a global force despite the small size of the country. Ties with the US and Commonwealth countries made the UK seem to be a major player in world affairs.
In addition, there is no doubt that another reason for the huge influence that the UK wielded was because it was part of Europe. After Brexit, European matters of foreign policy and economic policy will no longer be a concern for the UK government. The country will have no influence and more importantly no vote.
The UK did have a major influence in European decisions as a world leader, both in areas like the trade markets and in preventing the centralisation of power. In fact, some other participants in the EU often followed the UK which gave a lead against the EU becoming a more governmental organisation.
It may be that the UK thrives outside of the union and this is the outcome that most people are hoping for. However, there is a growing concern that the UK’s position on the global stage has been irrevocably weakened and not only will the US move its focus onto a stronger relationship with the EU but that the UK will become increasingly marginalised.
The failure of the ecstatic Brexit voters to comprehend that the world is now far more interconnected than ever could result in isolation for a country that was once proud to call itself Great.