HMS Brexit Needs to Sail For Singapore
Updated: Apr 29
The British are brilliant at the insult as term of affection and the term of affection as insult. One of their favorites for their cousins on this side of the ocean is “ungrateful colonists”, and by now most of us have seen the memes wishing us Happy Treason Day on the 4th of July. It’s endearing because there is a grain of truth to it, if only a grain.
So what are we to make of this day, 31 January, in this year of our Lord 2020, the day that Brexit has sailed from the EU trading block of which it’s been a member since 1992? At the time of the original referendum, in 2016, I called a colleague in London to get his sense of thing. He described it as “a loud nothing.” And to some degree, so far, that’s what it’s been. Most instability in the markets have been due to uncertainly of the process itself, rather than Britain actually leaving or staying the EU.
But now it’s go time. Britain sails out of the EU today, although it has until the end of the year to renegotiate trade deals with the EU. This may be harder than Prime Minister Boris Johnson is promising. The man is talented writer, showman and brilliant opportunist, but the upcoming negotiations, with a very cheesed off France, will take more strategic thinking than pizazz.
With tempers running so high within the EU, the chances for a “loud nothing” are slimming. Still, unique among the former colonial powers and empires, Great Britain has the ability to learn from its children, even the ungrateful ones. And there lies the path to not only avoid the suffering from Brexit, but to thrive from it.
Boris Johnson looked at one point to have the honor of being Britain’s shortest serving prime minister, now he looks like one of the strongest in a generation. If he can successfully hitch Britain’s post-Brexit star to liberalism, that is classic liberalism, that green and pleasant land might just outpace the EU in a generation. This assumes – and we know what they say about assumptions – that there will be an EU to outpace in a generation and that Britain can keep its course. Both are filed under a gigantic “If.”
Classic liberalism is not that woke, progressive foolishness, but open markets and free trade. As the largest of Britain’s ungrateful former colonies retreats from global free markets and content ourselves by getting in trade wars with both enemy and ally alike, the motherland should seek to emulate one of its smallest, most successful offspring: Singapore.
Founded by someone named Sir Stamford Raffles (of course he was) as a trading post in 1819, Singapore became a crown colony in 1867. It was affectively a port city with a banking infrastructure. It became a sovereign state in 1965, and without any natural resources to speak of or even a hinterland to exploit, Singapore hitched its wagon to free trade. And that was the right answer.
A little better than 50 years on, it is classified as a Alpha/Global city – meaning it is a primary node in the global economic network – and well as the only state in Asia with a AAA rating from all agencies. According to The Economist, it is the most expensive city in the world in which to live, but, home ownership runs at 90%. Part of the secret sauce lies in the fact that – EU and American trade and immigration barriers aside – Singapore enjoys visa-free or visa-on-arrival access to 190 countries. Sure, it’s rated as a “flawed democracy”, but so is the US.
If Singapore can do it with almost nothing in its back pocket, then Great Britain – with its resources, geography and educated workforce – should seek the same path. It has the infrastructure and deep skill set to leap forward as a global financial center: if it can deregulate some of the EU more cumbersome finance rules, London may well draw investors from Frankfurt and Paris.
Free markets and freely moving capital are a powerful force, and combined with a bit of focus, the sort of thing to make the whole of Great Britain a tech and science innovator. That plays to Britain’s strengths – it’s designed to be a global actor and the services sector already account for 80% of its GDP, and 40% of it’s exports. While it is true that the free markets in services has moved at a snail’s pace compared to that of manufactures, this puts the United States and the UK as the top two exports of services globally. Together the two can push liberalization of global services forward. France and the EU may throw a snit, but it just won’t matter.
That is assuming that the United States doesn’t continue our retreat from free trade. As has been pointed out, we can be pretty damned ungrateful.