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The socio-economic impact of Brexit on India, Pakistan and Sri Lanka in times of Corona

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  • Kohnert, Dirk

Abstract

ABSTRACT & RÉSUMÉ & ZUSAMMENFASSUNG : Following the Brexit, London endorsed a CANZUK union with its former white settler colonies, Canada, Australia and New Zealand. This was meant as valuable alternative to lost EU-market access. In contrast, non-white former British dominions – whether big (like India, Pakistan) or small (like Sri Lanka) were left on their own. The Indian Government perceived the Brexit vote initially as rather unfortunate because it would increase global instability and a weakening of the West. Indian multinationals like ‘Tata’, however, which had invested heavily in Britain as their gateway to Europe, saw Brexit as economic risk. Later-on, New Delhi realised also eventual policy advantages in Britain leaving the EU. The Brexit impact on Pakistan’s economy remained low so far. However, Islamabad would be well adviced to formulate separate policies for post Brexit Britain and the remaining EU-27. Sri Lanka’s economic and political ties with the UK, on the other hand, are considerably stronger than with any EU country. Annual trade with the UK amounted to over 10 %. Therefore, Brexit impacted negatively on the Sri Lankan economy. Changes to strengthen economic relations with the UK to overcome post Brexit challenges were imperative. As for the COVID-19 pandemic, it soon became in all three countries not just a health emergency but also a social and economic crisis. --------------------------------------------------------------------------------------------------------------------------------------- RÉSUMÉ : À la suite du Brexit, Londres a approuvé une union CANZUK avec ses anciennes colonies de colons blancs, le Canada, l'Australie et la Nouvelle-Zélande. Cela se voulait une alternative valable à la perte d'accès au marché de l'UE. En revanche, les anciens dominions britanniques non blancs – qu'ils soient grands (comme l'Inde et le Pakistan) ou petits (comme le Sri Lanka) ont été laissés à eux-mêmes. Le gouvernement indien a d'abord perçu le vote sur le Brexit comme plutôt malheureux car il augmenterait l'instabilité mondiale et un affaiblissement de l'Occident. Cependant, des multinationales indiennes comme « Tata », qui avaient massivement investi en Grande-Bretagne comme porte d'entrée vers l'Europe, ont vu dans le Brexit un risque économique. Plus tard, New Delhi a également réalisé des avantages politiques éventuels en Grande-Bretagne quittant l'UE. L'impact du Brexit sur l'économie pakistanaise est resté faible jusqu'à présent. Cependant, Islamabad serait bien avisé de formuler des politiques distinctes pour la Grande-Bretagne post Brexit et le reste de l'UE-27. Les liens économiques et politiques du Sri Lanka avec le Royaume-Uni, en revanche, sont considérablement plus forts qu'avec n'importe quel pays de l'UE. Le commerce annuel avec le Royaume-Uni s'élevait à plus de 10 %. Par conséquent, le Brexit a eu un impact négatif sur l'économie Sri Lankaise. Des changements visant à renforcer les relations économiques avec le Royaume-Uni pour surmonter les défis post-Brexit étaient impératifs. Quant à la pandémie de COVID-19, elle est rapidement devenue dans les trois pays non seulement une urgence sanitaire mais aussi une crise sociale et économique. ---------------------------------------------------------------------------------------------------------------------------------------- ZUSAMMENFASSUNG : Neben dem Brexit befürwortet London eine CANZUK-Partnerschaft mit seinen ehemaligen weißen Siedlerkolonien Kanada, Australien und Neuseeland. Dies sah London als wertvolle Alternative zum verlorenen EU-Marktzugang. Im Gegensatz dazu wurden nicht-weiße ehemalige britische Herrschaftsgebiete – ob groß (wie Indien und Pakistan) oder klein (wie Sri Lanka) – sich selbst überlassen. Die indische Regierung empfand das Brexit-Votum zunächst als eher unglücklich, weil es die globale Instabilität und eine Schwächung des Westens erhöhen würde. Indische multinationale Konzerne wie „Tata“, die stark in Großbritannien als Tor nach Europa investiert hatten, sahen den Brexit jedoch als wirtschaftliches Risiko. Später erkannte Neu-Delhi auch eventuelle politische Vorteile beim Austritt Großbritanniens aus der EU. Die Auswirkungen des Brexit auf die pakistanische Wirtschaft blieben bisher gering. Islamabad wäre jedoch gut beraten, eine separate Politik für Großbritannien und die verbleibenden EU-27 nach dem Brexit zu formulieren. Die wirtschaftlichen und politischen Beziehungen Sri Lankas zum Vereinigten Königreich sind dagegen deutlich stärker als zu jedem anderen EU-Land. Der jährliche Außenandel mit Großbritannien betrug über 10 %. Daher wirkte sich der Brexit negativ auf die srilankische Wirtschaft aus. Veränderungen zur Stärkung der Wirtschaftsbeziehungen mit dem Vereinigten Königreich zur Bewältigung der Herausforderungen nach dem Brexit waren zwingend erforderlich. Die COVID-19-Pandemie entwickelte sich in allen drei Ländern schnell von einem Gesundheitsnotstand zu einer sozialen und wirtschaftlichen Krise.

Suggested Citation

  • Kohnert, Dirk, 2012. "The socio-economic impact of Brexit on India, Pakistan and Sri Lanka in times of Corona," MPRA Paper 108804, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:108804
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    References listed on IDEAS

    as
    1. Kohnert, Dirk, 2020. "The impact of Brexit on Africa in times of the Corona Crisis," MPRA Paper 107700, University Library of Munich, Germany, revised 19 Jun 2020.
    2. Dhananjay Tripathi, 2021. "Evaluating Brexit Implications for India’s Relations with the EU and the UK," International Studies, , vol. 58(2), pages 234-247, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Brexit; COVID-19-pandemic; Corona; economic growth; India; Pakistan; Sri Lanka; United Kingdom; international trade; free trade area; customs union; Anglosphere;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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