Sarath Wijesinghe former Ambassador to U A E and Europe

Shock Wave of Brixith Battering the Economy

World history has shown leaders taking the Nations to disasters or/and prosperity and rarely country as a unit takes such decisions democratically changing the destiny of the country forward or backward. United Kingdom has taken a bold but a decisive uncertain step to exit from the 28 member European Union reducing the membership to 27 and encouraging others to follow suit for the destruction or diluting the strength of the European Union, with the potential of 500 million on the doorstep for trade, economy and industries. This decision has given shock wave to many including the Prime minister of Britain who took another bold decision to resign leaving space to a successor to manage the Independent United Kingdom without the clutches and regulatory powers of the European Union. Many countries and leaders such as President Obama, many Western and EU members including the Prime Minister of Sri Lanka urged and canvassed UK to remain in the Union. United Kingdom joined 1985 as a reluctant member to and maintained prestigious identity as a great and traditional naval, economic and a world power. After setting up the EU as an economic union in 1951/8, United Kingdom patiently and carefully watched the developments of the Union with an open mind with differences of opinions and arguments by political and active groups continued till to date. The decision taken by the people for Britain is clear and firm with 46497537 votes in favour with 52% to 48% margin with the biggest blow to David Cameron forcing him to quit with pound falling, and wiping away $120 million overnight battering the British Economy and leaving a black hole in the economy industries and entire governance including trade and foreign policy.

Impact of Brixith on Asia and other Ramifications

London may no longer be the Global Capital and major power as a member of the UN Security Council and in the forefront of the world economic forums will depend on how successfully this world power will survive and succeed the challenges to go alone severing bonds of 40 years with the European Union bonded on regulations, Courts, Parliament, Commission and many other ways. Britain may prosper as an independent nation and as a historic traditional power controlling a major portion of the world with the naval power then. Even though the decisions taken by the British Population is sudden with a clear mandate  the transitional period may take long expecting to last over 2-3 years or more with re negotiations  and adjustments. Impact of this decision on the world economy, in Britain, EU, Asia and Sri Lanka will have a direct ramifications and ripple effects for good or worse depending on the circumstances and the environments on trade, economy and political trends. Sri Lanka was expecting GSP +, preferential trade, direct export, trade, tourism, movements of goods and services in a strong Europe with Britain. This sudden decision has definitely weakened UK and EU simultaneously with hopes for both to emerge victorious with hard work. Sri Lanka may be a casualty in the process. The period of transition may be long and impact is uncertain and long term. Unfortunately Sri Lanka has to watch patiently until the dust settles for few years. Relationship with European Union may not be pleasant as the EU itself will be in danger of losing membership of many member states who will follow suit changing the chemistry of the trade and commerce with the rest of the world. There is a possibility of breaking into pieces due to the large number of votes in Scotland  and Ireland with close affiliations with the EU with heavily funded projects attracting the good will of the residents who will be a decisive factor in future referendums contemplated by some politicians with strong views on uniting  with Europe. There was two years divorce proceedings taken place regarding access to European Union for a single market and greater cooperation decreed for separation by the referendum. Uncertainty to UK and EU runs length and breadth of the entire globe bonded with trade, industries and commerce. Sri Lanka can no longer depend on West, UK and Europe now as they themselves are in trouble. Like other world powers she will have to seek the help from mighty China by mending bridges and fences broken with no vision and strategy. It is time for Sri Lanka too to mend fences with Great China an emerging world power for survival. It is time for the UK to manage them without interfering in other parts of the world realising that it will no longer be the main partner of the world policeman.

EU REGULATIONS AND TRADE AGREEMENTS

European Union regulations have entangled with all the member countries on environment, developments, law and order, foreign policy, immigration and many areas with power to monitor local laws with the help of the statutory bodies such as Commission, Courts, and Parliament which are powerful and effective diluting the local laws courts and institutions supervised by the EU regulations. Boris Jonson the former Mayer was in the forefront in the Exit Campaign who will be a likely candidate to replace David Cameron who has resigned to be effective in October this year as leader of the world’s fifth largest economy.  despite requests and advice from Barak Obama, Chinese President, commonwealth Leaders, Meekel and many other to remain in the EU for a strong union, David Cameron acted alone promising a referendum in 2013 resulted on an explosive shock to all including Labour Leader Jeremy Corbin who is now accused of conducting a weak and ineffective campaign to remain in the European Union . Now both Tory and Labour are in trouble on the EU issue. Chinese President, Commonwealth Leaders, President Meekel and many world leaders wanted UK to remain in the Union. Sri Lankan President and Prime Minister spoke in favour remaining in the Union and sent envoys to UK for the yes campaign. E U regulations are many and complicated but organized and structured legally in a codified form with easily refereed to with legal structure with power to implement. Now all this will be replaced by Trade Agreements Understandings. Sri Lanka is contemplating ECTA and other agreements with other countries and the ramifications and ripple effect will lead to complications on the formation and applicability. It is time Sri Lanka to be cautious in the midst of controversy.

SAARC /EU – bilateral and multilateral Agreements

EU is the most developed regional organisation of 28 members with powerful economies and two world powers and economic giants with powerful bodies and statutory instruments for the implementation of the complex and developed mechanism. SAARC is more an economic cooperation than political due to complicated political differences among the member states of Afghanistan, Bangladesh, Pakistan, India, Nepal, Maldives Islands and Sri Lanka. Established in 1985 it has a slow progress mainly on economic cooperation, with number of multinational agreements and individual bilateral agreements among the member states individually with states. SAARC was looking forward to follow EU following the procedure, programs, concepts with a view to have a single currency and common policies as EU. This sudden and uncertain decision of the people of Britain has given a shock wave to SAARC seriously effecting and slowing down the development process.

IMPACT ON SRI LANKA AND WAY FORWARD

Impact of the episode is far wide and deep rooted for Sri Lanka. Trade between Sri Lanka and EU/UK is substantial and complicated. 28.8 Exports to EU amounts to 3 billion, with 56% total to USA and EU with 10% with UK of one billion.  9% of the total 1.8 million tourists are from UK. Individual  countries of EU and UK has convincingly invested and has plans to invest in Sri Lanka with the new found friendship as a gift for defeating Rajapaksa Regime” the  UK and David Cameron was against. Now EU, UK and Sri Lanka are all in trouble with the sudden down fall. UK and Europe is on a volcano of immigrants with uncontrolled and continuous flow from Sea and land with the help of the EU treaty and free movements rights. One of the main reasons for the downfall is the issue of immigrants the British was heavily against. UK was helping Sri Lanka on advice and guidance on human rights and good governance more than economic packages and Sri Lanka was compelled to seek assistance from China again. When UK is in trouble there is a ripple effect on Sri Lanka being a closely knot connections traditionally, economically and many other areas. 1.2 million British live outside Britain mainly on EU and the possibilities of breaking up of UK to three pieces will have adverse effects on Sri Lanka indirectly. There is two years grace period to renegotiate the break up and UK will not be settled for few years. Economically Strong UK is of help to Sri Lanka though politically powerful UK was not sympatric towards us. Professor Camball Harvy” of the Duke University said that this is a sell out has brought uncertainty and not a disaster and we genuinely hope so. It is time for Sri Lanka and the governance to act swiftly and in moderation with reconciliation with all the political parties and the organizations for a joint programme based on conscientious shedding the political differences for the development and prosperity of the country with the assistance of the intellectuals professionals and the people who currently undergoing hardship due to mismanagement of the governance and the economy to be taken to the correct path with s vision and a  strategy for the  nation.

Writer could be reached on sarath7@hotmail.co.uk

and Sri Lanka is a major trade partner and EU an export and import unions and inter dependable. Sri Lanka is a major beneficiary on trade with UK and EU. E U is the largest destination of expoerts being 36% entire export basket which includes clothing and other irtems of around ½ of the expors out of sri Lanka. It is the forth largest importer beng 2.5 billion mainly of garments from SL and 60% trade exports. EU fuds various projects and maintains a Desk to help and advice esport and helps sri lanka on SMEs and trade methods thre billon are exported to United Kingdom amoutnnting to 3 billion  28.8% and any uncetainalty and distabialiaty will affect the trade for few years until dust settels and stabilizes. There for it is inevitable for Sri Lamka to go through a difficult period and the membes of governance MUST divert attentionon reconcillatin among the politicians and political parties to emerge from the difficult period witha visio and a strategy of recovery, with innovative programms and new ideas for collective approach on economy,agritcultue,industrial developmens and international andeconmic relationswith the member countries nd the Internatinal rganisations