Thursday, July 15, 2010

The future of the United Kingdom

I have created this blog with the objective of sharing my thoughts on both the strategic future of the United Kingdom and its military capabilities.

The United Kingdom an over view

As an economist I see the downfall of the UK as an over played broken record. Yes the UK has hit difficult times. We are running a substantial budget deficit unemployment is high and growth is week BUT so what. Everyone else in the world is running a similar budget deficit and has higher unemployment. While strong action is needed to control public spending and balance the budget we should not feel this is the end of the UK. Indeed we have a number of real economic driving forces which will get us out of this mess.

  1. We went into this crisis with the lowest debt of any of the G7 nations. We can afford to have a bigger deficit for longer than any other G& nation except the USA and Japan.

  2. Up to 2008 we had the highest per ca pita income of any G7 nation except the USA and Canada.

  3. The only reason we have fallen from the worlds 4th largest economy to the 6th is that China have a billion people and the GDP is measured in Dollars. With the fall of sterling France appears to have a larger GDP than the UK but this is not the case when taking into account purchasing power parity.

  4. Unlike France we have a population who is prepared to practice Fiscal discipline and work a little longer instead of swamping our kids in debt.

  5. Unlike Germany, France and Japan (our only comparable competitors) we have a growing population. The Uk is predicted to become the EU's largest economy by 2050

  6. We still have the world's main financial centre and despite what the press want us to believe Finance is here to stay and will continue to be a major economic driver well into the future.

  7. We don't make stuff. Allot of people have criticised the UK for its relatively small manufacturing base. While this might have bean handy over the last 2 years in the recovery the main thing we should remember is we stopped making stuff for a reason. Germany and Japan are both the only major net exporters in the G7 and both have been in recession since the late 1980 and will likely stay in recession until the start making things there own people want.

  8. The bank of England seems to be the only bank in the world that has a clue what to do in the economic crisis. they obviously paid attention in the first day of economics class. devalue the currency, print money and generate some inflation.

  9. We have inflation. Our debt is getting smaller by between 3% and 5% (depending on who you believe) per annum

  10. We have lower unemployment levels than either the US or the EU.

I am not trying to say that things are rosy in the UK. They are not but we can only compare ourselves with the rest of the world. Yes the UK hit the 2008 crisis harder than anyone else. We had the biggest finance sector per ca-pita obviously we were going to suffer the most. The point I am trying to make here is that given some time and a bit of discipline we will be okay and in a stronger position than most of our competitors.

We certainly should not be considering throwing away our diplomatic and military edge in a defence review because we feel that we are too small and too poor to maintain it. This simply is not the case.

The title of Superpower has only ever been granted to 2 counties and today only one retains it. That will likely be the case until the middle part of the century when inevitably China and perhaps India will super seed the United states and perhaps become the first Mega Powers.

Indeed even at the height of the British Empire in the 1850's to 70s we were never a super power. We had overwhelming Naval power but a very small army. We were perhaps the greatest of the Great Powers. Surprisingly despite the rumors of our demise this is a position we have maintained since our hay day. Today we have the worlds second largest defence budget (Although china has over taken us last year principally due to the drop in sterling). We maintain the second largest navy in gross tonnage in the world. We hold a number of strategic assets especially our SSN's and SSBN's which are nearly unmatched. We have a multi role fighter which is easily the second best in the world (Typhoon) and cost significantly less and will be built in much greater numbers than its only competitor the Raptor 120 vs 600+. The RAF is the 5th largest air force in the world an easily more capable than its larger but undeveloped competitors India, Russia and China. Our Army is small but nearly unmatched for its professionalism and capability. Indeed no other military (excluding the US) can deploy and maintain three full combat brigades anywhere on the planet with the abilities we have 16th air assault, 3 commando 7th Armoured.

Fundamentally I am a realist. I realise that Britannia will never again rule the waves as she once did. Nor should she. In the 21st Century there is no place for empire's. Inevitable massive countries such as India and China will eventually come to dominate the world. Even the USA will have to come to accept there dominance as we had to accept the US A's and the Dutch had to accept ours. However taking these three countries out of the equation there is no reason why we cannot maintain the 4th spot military and 5th economically well into the 22 nd century. Looking at the other countries that might seek to compete with us we have a number of distinct advantages. With a bit of hard work sacrifice and good old British ingenuity we can maintain or even enhance our position in the world over the next 50 to 100 years. In this blog I will attempt to outline, economic, military, domestic and foreign policy measures which will help to achieve this goal.

To what aim? That is the big question. Why should Britain in the modern age try to maintain its great power status. The best and simplest answer I have is because it is what we do. We are a people who do not know the word defeat. We are defiant, obstinate and down right violent some times. These attributes have often been to the constination of our enemies (and some times our friends) from the Nazi's to Argentina who could not understand why we would fight. Our fore fathers passed on a great and terrible legacy to us. The nation who first industrialised, who abolished slavery, created the modern world of trade and finance. Who stood alone against the Nazi's and all of occupied Europe despite all the odds.

Dont get me wrong. I know our history is as checkered as anyone else's with all sorts or wrong doings and genocides but we have a number of things to be emencly proud. Our problem has been that this legacy has also been a terrible curse. Terrible because we have felt unable to match up to it in the modern age. Terrible because since the end of the Empire we have struggled with defining what role we should play in the modern world. Where do we fit in. During the cold war this role was defined for us. We were landing strip one. The main pin linking Europe and the USA in NATO. Hell bent on not repeating the mistakes of 1939 and making sure the Russians stayed out of western Europe.

However since 1991 we have been unclear where we should fit in in the world scheme. We have been happy to hide behind the special relationship and be the USA's only real ally. While I have always and will always be an admirer of the USA this is now no longer the place to be. As time goes buy the special relationship will be a more and more one sided and not to the UK's benefit.

Its time to carve out a new direction for the UK. One that will put us back into the premier league. Think we can't? I say yes we Can and I intend to show how.

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