When discussing Britain’s Foreign Policy objectives, in particular the possibility of remaining an influential actor in the coming decades, it is common to attract derisive comments from people convinced of our approaching irrelevance. This is often accompanied with statements asserting the unstoppable rise of new powers in contrast to our own decline, and thus the necessity of banding together with our friends in europe in order that we may act as one puissant whole. Yes, as advanced economies our growth rate will be slower than the new rising titans, and yes the west is subject to demographic decline which will further erode our net ‘weight’, but is it really true that the middle of the century will herald an era where Britain cannot contemplate an assertive and independent Foreign Policy?
Are we limited to the twin choices of a federal europe or a harlot chasing others interests?
When this blog was exploring Hague’s vision for British Foreign Policy it used a paper from the Carnegie Institute, and did so under the assumption that their economic projections were a reasonable middle-of-the-road forecast. Now, we have two new papers from HSBC and Citi Group each forecasting world economic prospects in the 2050 time frame, so was this assumption reasonable?
Links to the three papers are here:
Although there are many relevant measures of economic weight including GDP purchasing power parity and GDP per-capita, let us first look at nominal GDP –
As we know, according to the Carnegie Institute Britain falls to seventh, but overtakes France & Germany.
According to HSBC Britain’s economy remains the sixth largest by 2050, just behind Germany.
According to Citi Group Britain slips to tenth place, but remains the only EU nation listed.
So yes, Britain becoming the largest EU economy within a generation seems wholly achievable, but what must be distressing for other european nations with pretensions to world influence is the rapidity of their relative decline.
What is the cause of Britain’s continued economic relevance? Sustained growth rates faster than our continental neighbours assisted in part by a healthier demographic profile:
Surely this would be a hollow thing if Briton’s individually were not wealthy enough to preserve a standard of living conducive to a stable political system, and indeed to perpetuate a high-tech economy that will maintain that standard of living in years following?
Quite, but this is apparently a problem more pressing on our european neighbours.
According to the Carnegie Institute Britain will remain one of the wealthiest among our peer group of G20 powers, even when adjusted for purchasing power parity:
In fact, according to Citi Group Britain will remain one of the wealthiest per-capita nations full-stop, even compared to the likes of Switzerland, Singapore and Hong Kong:
So, enough from the doom-sayers, if Britain wishes to retain an independent and assertive Foreign Policy it is well within its capability to do so.
One can quite understand the unease of France, Germany, Italy and Spain on the other hand, there relative decline is quite apparent.
Update – 2012/01/19 - Another 2050 projection from the Arthbutnot Group this time:
“Of the Western European countries the UK does indeed become the biggest economy ahead of Germany helped by its demographics. The UK is richer (per-capita) than France, Germany and Italy by 2050, partly reflecting its favourable demographics.”