The UK Exit: The consequences

By Dr. Ahmed Adamu

Picture sourced from masterinvestor.co.uk

The UK were in some ramifications out of Europe already, different currency, different visa, and different people and culture. Immigration policy is the major UK compliance to the union policies, which allowed citizens of poor European countries to overflow the UK seeking for better economic life. Some British would not want too much flow of people into their country, especially of those they consider poor people. The British rather prefer to relate with people from developed countries even within the Europe. So with the exit of UK from Europe, UK will now marginalise the poor European countries in its diplomatic and economic engagement. They will now relate with the developed European countries like France, Germany, Switzerland, Netherlands, Spain etc in a relax manner.

The UK exit from Europe will send large number of the cheap labour forces out of the country, as so many will not fulfill the new UK immigration policy. This will create scarcity of labour in some sectors, especially small skilled labour sectors. Other legal immigrants from other parts of the world will now have to choose among jobs. This will push the labour cost high, which will cause inflation.

Many people who would have freely fly in to UK to spend their money will not be able to do so. This will reduce the demand of the Pounds Sterling, causing it to depreciate relative to Euro and US dollar. Many business will collapse do to the resultant reduction in aggregate demand. The economy will then shrink.

Many of the UK businesses in other European countries will no longer be profitable, or will have to be repatriated. Many of the British air transport businesses will incur losses or may have to close down. The supply of commodities and products from the Europe will reduce as suppliers will find alternative destination of their raw materials. The alternative destination of European commodities will likely be the Paris. So businesses will migrate to France, making the French economy more competitive than the UK's. The UK will face huge reduction in food supply leading to food inflation.

The football stadium may not be that filled again, as the cost and hurdles of coming to UK will increase for the Europeans, so people will rather stay at home and watch matches even with slow motion pictures. The revenue and taxes from sport clubs will reduce. The overall revenue of the government from transportation, education, tourism, VAT, and Taxes will reduce.

With the ongoing European football tournament, one will wonder if England, Wales, Northern Ireland and Scotland will ever play in European tournament again. Or if Leicester City and Arsenal will play the European champions league this year. Anyway, they will, as the UK will not change its geographical locations yet.

The UK has send message to the world that you are better alone. The regional unities that have been promoted across continents are discouraged by this move. Bigger and influential countries in other unions may start thinking the same. This exit is a move to marginalise developing countries. Even though the votes were not inclusive as majority of Scottish and Welsh would have prefer to remain. The English will always have their say and their way.

The UK will survive of course, but difficult survival. However, the referendum has once again showed the strength of the constitutional democracy of the UK, and that the people's voice matters more than anything in governance. The unnecessary Cameron's decision to resign was not a surprise, because he will not be responsible for the aftermath of the decision he was not responsible for and didn't advocate for. He will allow those that promote the agenda to handle the ramification.

Still on UK exit: The Scottish tend to be more accomodating and willing to integrate, but their voices did'nt matter in the referendum. That is why Scotland will repursue their independence so that their voices can matter. This hold same for Northern Ireland. When you go for simple majority, you are bound to be exclusive. The best way is to take the regional voting average. And when 28% of the British didnt vote, the 3% difference is marginal. A sensitive once in a generation voting like this require more than 70% majority. Many British were taken by surprise and some regreted voting to leave. So, they must be given the second chance if they demand for it. If UK eventually divorced EU, then the UK must divorce Scotland at least. So, UK will be disintegrated if it disintegrate from EU. The myth that UK being dragged behind by the slow growth pace of poor European country cannot be true. The UK financial contribution to EU is lower than the benefit it drives from the union. The perceived security vulnerability can be addressed without the need to disintegrate. Already, the UK's allies are shocked and not happy with the leave outcome. The Russia will now have more influence in the EU, as its major competitor exited. The US has lost its puppet in the EU. The trillion dollars lost in financial market has already outweight the financial saving for not contributing to the EU. Dr. Ahmed Adamu,

Petroleum Economist and Development Expert,

Pioneer Global Chairperson of Commonwealth Youth Council,

University Lecturer (Economics) at Umaru Musa Yar'adua University Katsina.