6/29/2016

Post-Brexit UK – A New Dawn for ASEAN

The political and economic fundamentals of the United Kingdom (UK) remain very strong even as madness and mayhem descend upon global financial markets after the Brexit voted 52%-48% in favour of the UK leaving the European Union (EU) in 2 years time.

Global financial markets protested as they are unable to grasp the inevitability of the emergence of an unfamiliar new world order having a independent, politically and economically strong UK unhinged from the EU. That the UK has never been truly and fully an integrated part of the EU seem to be lost on the major market players as they allow their fears and ignorance to fuel massive sell-down of stocks regardless of their materiality and relevance to UK and/or EU economies. 

The UK economy is 4% of the world’s GDP; and at nearly US$3 Trillion is the 9th largest in the world and the 2nd largest in the EU.  With a reducing national budget deficit, the UK has been the fastest growing among the developed nations, being the 9th largest exporter and the 5th largest importer with the world, including the EU. 

In terms of foreign direct investments (FDI), the UK has the 3rd largest stock (behind USA and China) of inward FDI worth US$1.7 Trillion as well as the 2nd largest stock of outward FDI, of which a significant 28% (about US$35Billion) flows into the EU.   

The grandiose EU dream has become nightmarish over the years. The peace and prosperity envisioned at its creation are mired in despair, unemployment, debts and fiscal disarray.   EU’s share of the world GDP has fallen in the past 40 years from 37% in 1973 to less than 23% today, and still declining.  EU unemployment remains high when compared with UK’s 7.5%, with countries like Spain at 23% and Greece above 25%.  The relentless economic EU economic and political crisis has no solution because it is grounded in the very conceptual nature of a “United European” notion that forces a group of 28 nations with very disparate economies and fiscal discipline, resulting thereby in endemic economic paralysis and stunted development.

Post-Brexit UK is finally freed of EU ideological, economic and political shackles to pursue her own destiny and dreams. Brexit opens up tremendous opportunities for the UK to expand its own trade with current trading partners like ASEAN, Commonwealth, Africa and the USA.  And to create alliances with other trading blocs eg the Trans-Pacific Partnership (TPP) around the Pacific Rim, the Regional Comprehensive Economic Partnership (RCEP) and the emergent ASEAN Economic Community (AEC) without having to obtain EU approval.

ASEAN is an economic community of 10 South-East Asian nations with a combined GDP of US$2.4 Trillion and 630 million people.  For ASEAN, the UK is a main export and FDI destination in Europe.  ASEAN also receive significant FDI from the UK. The UK-ASEAN relationship can be expected to deepen and expand in volume and financially post-Brexit. 

As a start, a UK-ASEAN Free Trade Agreement (UKAFTA) would make logical sense and easiest to model after the proposed EU-ASEAN FTA currently under negotiation.  Alternatively, individual ASEAN nations could fashion their own respective FTA with the UK, using the 2015 EU-Singapore FTA (EUSFTA) as a template model.  Individual UK-ASEAN Member FTAs would not jeopardize the eventual conclusion of a EU-ASEAN FTA.  There are multi-billion dollar infrastructural projects in ASEAN awaiting FDI and investments from the UK, EU and the rest of the world.

Post-Brexit UK is a strong competitor of the EU and other developed nations in the global FDI and trade space.  ASEAN sits at the heart of two high-profile mega-FTAs: the TPP and the RCEP between ASEAN and its six FTA partners, including China, Japan and India. These two giant trade initiatives will inevitably draw ever more economic activities and FDI to the region and away from the transatlantic trading area, to the detriment of the EU.

The continuing turmoil in the financial markets post-Brexit ignore the solid inherent strengths of the UK economiy and her financial institutions.  Her political stability is not weakened by the Brexit vote, but is instead strengthened by the boldness and courage of her political leaders from all political persuasions to trust in the judgment of the UK people.  The doomsayers and gloomy outlooks for post-Brexit UK have no objective basis and are grounded in their fears of the unknown dynamics of a EU with the UK. 

The UK is also the peer leader of the Commonwealth, a huge loosely-organised bloc of 53 countries with a combined GDP of over US$9 Trillion.

And when the economic radarscope of the UK scans more wider globally, the Commonwealth and ASEAN will become her new prosperity platforms as the UK re-kindles old legacy relations in the dawn of a new global order now unfolding and unpacking before us in an uncharacteristic and certain manner.     

Michael Heng aka Mikros


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19 comments:

Anonymous said...

"...the UK has been the fastest growing among the developed nations, being the 9th largest exporter..."

What does the UK export? How many type of products and services in Singapore are from the UK? How come so far I never even meet any foreign talents from UK in Singapore?

Anonymous said...

UK sell antiques to silly ex colonial people like the mini car and the London cab. How many silly ex British subjects are still romanticising over the great days of being ruled by the Queen of England? Want to drink tea from England, produced in Ceylon?

Anonymous said...

Do you think it is time for Singaporeans to vote for exit from the Singapore-India CECA Agreement?

Anonymous said...

Are they smart enough to know what is CECA?

Anonymous said...

UK shall fare no better or worse after
Brexit. It is after all behaving quite independent of the Union, especially it's
Currency.
Without it's colonies as well as it's diminished clout in the Commonwealth, the United Kingdom will only be remembered for it's glorious past.

Anonymous said...

Q: How stupid are Singaporeans?
A: Singaporeans are so stupid, 70% of them actually believe PAP is on their side.

ROFL.

Anonymous said...

the United Kingdom will only be remembered for it's glorious past.
June 29, 2016 10:08 am

Just like Singapore and Singaporeans will only be remembered for our glorious past.
That and a once very reliable MRT system.

Anonymous said...

Do you think it's hard to believe?
A clever and capable Singaporean leader can have such a stupid and useless son?

Anonymous said...

Where is my bastard son JayF?
I am warning him. Everytime he comes here I am going to wank his mother real hard, all because of him.

Anonymous said...

"Welcome To Hell" - Angry Unpaid First Responders (Police and Firemen) Warn "Whoever Comes To Rio Will Not Be Safe"

http://www.zerohedge.com/news/2016-06-28/welcome-hell-angry-unpaid-first-responders-warn-whoever-comes-rio-will-not-be-safe
++++++++++++++++++

Let's pray for the safety of our Singapore Olympic team in Rio, Brazil.
- I continue to publicize the dangers
- in the hope that our PAP government will make plans for emergency medical evacuation
- or at the minimum, buy adequate insurance for our athletes

patriot said...


Channel News Asia says Singapore Rio Team will get the Taste of Home.
Supposedly whilst at the Olympics in Rio, l surmise.

patriot

Anonymous said...

Channel News Asia says Singapore Rio Team will get the Taste of Home.
June 29, 2016 11:19 am

Where is the money going to come from?
Is the supplier a $2 company?

Anonymous said...

UK will take year to initiate trade deal with asean. Its present task is to elect a PM to deal with Scotland and EU. Scot s Sturgeon is going to meet EU leaders. She wants to keep Scotland in EU. To her, those voted to Remain, Scotland, London, Ireland must be given chance to stay in EU.
The clash between Scotland and EU and UK will arrive soon probably in September when UK has its new PM.

I guess the first thing UK do is to pass Laws to declare all EU Laws are void in UK territory. Once this natural step is done. Scotland s negotiation with EU and if EU allows Scotland to stay in EU will have direct conflict with UK Laws and Parliament.

So the Scotish PM is doing something amounting to splitting UK. An independence referendum must be passed in UK parliament before it can proceed. And will Scots vote for separating from UK? There were 60% voted to stay in UK in 2014.

If Scotland is allowed to join EU, then Scotland will have to use Euro and now Pounds as currency. EU Commissioner Chunrker is pushing countries not using Euro to change, after Brexit.

In fact, a more powerful country if it exits, is an independent England. England will save cash about 15% of EU budget as it is leaving EU. It may save further 20billions pounds to subsidize Scotland. I will expect the gbp to be strong after the Brexit settle. Asean will have good export to UK if it has things to export. In sg, the manufacturing are dying due to the property boom. What advantages can sg gain from a strong pounds in England? Voters of 61% better wake up in 2020GE to vote for opposition for a new world order. England will be strong. China and Russia will be strong. EU will be in shit shortage of cash, so export to them is a problem. If sg depends on tourists, how to attract them to pay double the prices for goods the tourists can buy in Bangkok? Even Pap cannot solve this problem, what dont you think?

Veritas said...

Wrong, UK after Brexit will be USA stooge.

Modern nation states cannot live in solitude. They need market and raw material which UK has none. The reason why Japan fought the WW2 because she need market and raw material, and pax americana solve the problem.

Reason why UK has guts to go alone is she has big anglo states like USA, Australia, New Zealand to leverage on.

Spain and Portugal can exit. But not Germany and France.

Anonymous said...

I thought the best UK talents, just like the best Sinkie talents, already emigrate to USA? Because USA is the land of opportunity and money for the best talents anywhere in the world.

Anonymous said...

Do you think the PAP-India-CECA (PIC) is an axis of evil?
Is PIC the axis of evil against Singaporeans?

Chua Chin Leng aka redbean said...

Trump said he would tear the TPP agreement to pieces as it is raping the USA. I don't think any minister would dare to visit Washington again to try to convince Trump that TPP is good for the Americans if Trump becomes the President. Someone please whisper to Vivian.

Anonymous said...

oxygen:

June 30, 2016 at 12:10 pm (Quote)


RON PAUL, tycoon and former US Presidential candidate, SAYS THE END OF THE CURRENT FINANCIAL SYSTEM – not the end of the world- is coming.

The present regime of NIRP, ZIRP, money printing is creating usual vulnerabilities in financial market. He is NOT wrong on this count.

Anonymous said...

Anyone notice how the stock market around the world recovered so fast despite all the gloom and doom propaganda spread out by Western mainstream media and parroted by their lackeys around the world ?

It's almost a certainty that the yes vote for Brexit referendum is allowed to happen and those powerful bad guys are able to fully use this knowledge to their advantage, to make even MOAR money.

Rest assured that should the result was a NO, these suckers could also make profit!