Seven beneficiaries of UK’s Brexit

Following the  proxy class war that was the EU referendum, I was reflecting on who I think will be some of the beneficiaries of UK’s Leave or Brexit result besides the obvious parties like the Leave campaigners and Boris Johnson.

As a slight aside my personal view is that the root cause of this result is inequality which has led to a disenfranchised populace that is reacting against the increasing economic marginalisation an increasing majority of citizenry are facing. Even the issues of migration are being amplified against this backdrop of growing economic inequality. This is one of THE policy challenges of our time. Resolve this huge issue of rising economic inequality and I suspect we will find in it the panacea to a large number of other issues we are facing.

So on to who I suspect will be benefiting from this:

  1. Scottish independence campaigners – The will of the Scottish people is reflected in the results – they want to remain in the EU. During the last independence referendum, there was a clear statement that any exit from the EU by the UK may trigger another call for independence. Whilst 2014’s independence referendum was deemed a once in a generation campaign, I suspect the result of the 24th of June 2016 may bring forward the next independence referendum to as soon as the next two years.
  2. The United Irish brigade / and IrelandSinn Fein have been quick off the mark to argue their case for a union of the Northern Irish with the Republic of Ireland. Similar to the Scots, the Northern Irish were also in favour of remaining with the EU and there is a case for them to argue for independence and fulfil the long-held dreams and aspirations of Irish nationalists.

    Any push towards reunification will also lead to the levels of investment and pump-priming of both Irish economies leading to further growth. Furthermore, in the near term, I suspect some of the investment meant for the UK may be diverted to Ireland, particularly in the financial services and outsourcing sectors.

  3. First time home buyers – With the expected fall in asset prices, it may finally become easier for people trying to get onto the property ladder. Furthermore, a reduction in immigration will also dampen demand for housing and rental yields, leading to more affordable homes. It is also widely expected that the Bank of England will not be hiking rates any time soon to carry on fostering demand as well, making the overall cost of home ownership more affordable.
  4. Lawyers and accountants – Over the next two years, as major UK enterprises and companies seek to understand their legal, tax and financial planning positions vis-à-vis the EU, they will rely on an army of lawyers and accountants to make sense of their obligations and required strategies to maximise profit and minimise liabilities (legal and financial).
  5. Management consultants – I am fairly sure BCG, McKinsey, Booz (PwC), and other management consultants heard a loud ker-ching of cash registers going off collectively as they seek to become the ‘experts’ in EU law and supporting both the public sector (particularly as they become overnight subject matter experts in Article 50 of the Lisbon Treaty that governs EU exit) and private enterprises as they help organisations make sense of what Brexit means for them (by first asking them what it means for them and then re-writing it into 100 PowerPoint slides and charging them a fortune for it…).
  6. Trump’s policy advisors and US isolationist/protectionist campaigners – The Donald will point to UK’s EU referendum results to his domestic base and use it as an argument about why his protectionist and isolationist policies are for the best and will help “Make America Great Again (TM).” It could also be a powerful argument against the likely Democrats’ positions about open economies and trade reforms.
  7. UK exporters – At least in the short to medium term, as there is a downward rebalance of the UK Sterling, I suspect it will help improve UK’s exporters (particularly seeing as 50% of UK’s 15 export partners in volume are outside the EU). However, it has to be also noted that UK’s net deficit is roughly £300 billion and given the higher level of imports, it is also likely there will be a strong inflationary pressure with little monetary tools or options at the Bank of England’s disposal.
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Muzzling a rockstar central banker – the Indian way

This article reflects only my own personal thoughts and do not reflect the official position of any other organisation. Responsibility for the information and views expressed this article lies entirely with me. 

The news of the resignation of India’s central banker Raghuram Rajan has unsettled Indian investors, and rightfully so.

Rajan was one of India’s best central bankers and was a cornerstone in driving the Indian economy over the last three years.

Here is a man who in 2005 at a conference in Jackson Hole made some prescient statements about how financial developments have made the world a riskier place and called out the systemic risks posed by banks to the global economy. (His speech can be found here: https://www.imf.org/external/np/speeches/2005/082705.htm). He was derided as a luddite who was misguided. However, the developments of the 2008 financial crisis proved him right and a number of his proposed safeguards have since been implemented.

Some may question why the current Indian administration has removed a man who is widely recognised as an architect of India’s growth story.

It goes back to 2014, when Rajan questioned Modi’s “Make in India” campaign and cautioned against “against picking a particular sector such as manufacturing for encouragement, simply because it has worked well for China. India is different, and developing at a different time, and we should be agnostic about what will work.”

Last year, Rajan also questioned the rising of sectarian tensions and intolerance propagated by factions associated with the currently ruling government.  In a speech to the Indian Institute of Technology last October, Rajan lambasted the rising intolerance and stated: “India has always protected debate and the right to have different views. Excessive political correctness stifles progress as much as excessive license and disrespect.”

This is consistent with the pattern of behaviour displayed by the current Indian administration .

What have Modi and his administration achieved in the last two years:

 

So what does this administration do in response? Remove one man who can help make a difference and help improve matters.

Another great article here: By getting Raghuram Rajan out, Modi may have won, but India has lost

I am genuinely concerned at the state of affairs in India and despite the sometimes effective PR campaign Modi’s government may run, the cracks are beginning to show.

India’s always been a home to alternative thoughts, ideas, ideologies, religions, faiths, beliefs, ethnicities and ways of life. We have been a beacon of hope and democracy for all and it is very sad to see the very edifices of inclusivity and secularism crumbling.