Namastey London or Ta-Ta?
It has been a fortnight since the United Kingdom voted to leave the European Union in the ever historic referendum conducted under the Cameron Government. It decided to exit the union it has been a part of since 43 years. Nevertheless, EU law would still stand in the UK until it ceases being a member, and that process could take some time.
This topic has a lot of debate to offer and a multitude of views and analogies. Statistics show that while the maximum younger generation voted to stay in the European Union, the elder generation voted to exit. This again has a lot of interpretations. Now, that it has been two weeks since the Referendum, the ones in Britain who voted to stay and lost by a marginal minority are seen protesting against the BREXIT decision of the Referendum, but there’s little that can be done.
More than the pros of leaving Europe, Britain might just face a larger amount of cons.
There’s no need to mention that Britain might be at lower side of the see-saw as compared to Europe in this entire episode. Yes, it is right that Britain won’t be bound by what it refers to as politics at Brussels, and would now be independent to make its own decisions but now they’re in all its’ true senses a group of islands in the Western Europe and a disunited Kingdom (Reason- London and Scotland had majority vote to Remain, but in overall the Britain still had a majority vote to leave- 52%). Growth in UK would be slower alone as compared to if it were with the EU.
Now, when it comes to individuals in India, they must have their own cause to worry about. How would this have a bearing on the people of India?
Is it Namastey London for us or Ta-Ta London?
First of all, we should know that this step would have different effects in Indians based on where they stay or what they do. It would have an effect on Indians staying in the UK, a different effect on Indians staying in India, another effect on NRIs staying in countries outside of UK, and a yet another effect on Indians staying in India but engaged in the Export business.
The first major outcome of the British Referendum was the immediate but eventual crush of the Great British Pound as a reaction of the market sentiment. The Pound depreciated against the dollar to reach a 31 year low and as the dollar, the common currency for most countries to calculate the exchange rate, appreciated, other currencies depreciated with relation to the Dollar.
This simply means that the Dollar strengthened compared to other currencies and the Pound weakened.
For an Indian exporter to UK, this is a bad condition, as he would now be earning lesser in Rupees terms as he was prior to the drop. For an Indian staying in the UK, it might be adverse as well based on similar grounds, also taking into consideration many companies are removing investment out to the Europe fearing the market volatility in the UK. For an NRI outside of UK could, this only mean two things, cheaper trips to the tourist destination London and maybe advantages of a better dollar.
For an Indian, this now means that trips to the UK would be cheaper as compared to earlier, also this means that the much sought after higher education of the UK would also be cheaper for Indian Students. With the earlier problems relating to work permits for foreign students in England, and other adverse conditions, the UK would have to come with relaxed norms to attract more students from Asia. But what does this mean in absolute terms, that if the cost of studying abroad has gone down relatively, we would now be spending that much extra (Higher Education in India would still be cheaper and perhaps more effective) to go there, which we wouldn’t have had this decrease not happened.
In a simpler Analogy, if the Pound were a product, we would now be buying more of this product which we were never going to buy in the first place because it is relatively cheaper. Isn’t this the same strategy the marketing departments of all companies apply in terms of Sale? Connections apart, whether this fall is really of benefit to us or not is something each one of us should judge based on our personal view, but don’t fall prey to the “relativity” ideologies.
Namastey!
