By Benito Wheatley (Director of the BVI London Office)
The United Kingdom (UK) vote to leave the European Union (EU) is a game changer in International Relations.
Britain’s withdrawal from the EU will have far-reaching implications for Europe and beyond and create a more uncertain international environment in which the British Virgin Islands (BVI) must operate.
The EU will lose one of its most influential members in world affairs.
The UK is presently the fifth largest economy in the world, a Member of both the G20 and G7, a Permanent Member of the UN Security Council and a leading state in the Commonwealth of Nations.
Britain’s exit will certainly weaken EU influence in the world and make Britain less influential in Europe and globally.
Brexit is another blow to efforts to maintain international stability following the global financial crisis in 2008-09.
Looking ahead, a confluence of international political, economic and social issues and events risks further undermining the stability of the world system.
Britain’s negotiations with the EU on the terms of its exit are expected to drag on at least through 2018 which will weigh heavily on international financial markets and the stability of the euro and pound, and test the coherence of the EU.
Europe also continues to bear the weight of refugees fleeing conflict and turmoil in the Middle East and North Africa.
In the developing world, emerging markets have largely lost their economic lustre.
China’s economy has significantly slowed down, although India’s growth has accelerated.
Tension also continues to build in the South China Sea over the competing maritime claims of China, Vietnam and the Philippines.
Russia remains under United States (US) and EU sanctions over Ukraine, while Brazil, South Africa and Nigeria continue to be plagued by systemic corruption.
Cuba and the US have re-established diplomatic and commercial ties, but Venezuela is on the verge of economic collapse and political upheaval.
Syria, Iraq, Libya and Yemen remain mired in civil strife with limited prospects for peace and stability.
In the environmental arena, global warming will continue to cause stronger and more frequent storms, sea level rise, desertification and other negative impacts of climate change.
The world economy is also projected to continue to slow down through 2017 on a weaker expansion of international trade than initially forecast.
A new international leadership will be tasked with managing these and other issues in the years ahead.
In late 2016, a new Secretary General of the United Nations (UN) will be appointed and the US and Britain will have new political leaders by the end of the year.
In 2017, France and Germany could also have new political leadership depending on the outcome of their national elections.
Small states whose open economies and fragile environments are the most vulnerable to external shocks will have to be even more vigilant than during last year’s international climate change negotiations in order to protect their economic and environmental interests.
In all of this, the BVI must continue to strengthen its global position as an International Finance Centre (IFC) and tourism destination, while developing new industries and sectors, to ensure its economic success through the coming period of uncertainty.
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