(Picture courtesy of The Spectator)
In recent years, the world saw a surge in global populism. The UK was not spared. Brexit was the result. In June 2016, the majority of the British public voted in a referendum to leave the EU, a major strategic bloc that makes up over half of UKs trade exports. Is the decision a mistake? Many academics, world leaders and economists seem to think so. Others say that it will undermine the UK’s global standing in the world order. But for the majority who voted for the decision, the unchecked levels of immigration, overregulation by the EU, and the high inequality of wealth contributed to the vote. Whether it was the right decision or not, only time will tell. The current Prime Minister Boris Johnson and the Conservative government are now tasked in the process of seeking a better deal before the UK officially exits the EU in 2019. Will the UK be “stronger and more stable” as ever, as the Prime Minister promised the public during her 2016 election campaign? Again, only time will tell.
Amidst the turbulent times facing the UK, it would bode well for Brunei to work at finding opportunities to enhance the already strong trade partnerships between the two nations. These opportunities encompass three potential areas to work on. The first area is the TPP agreement, the world’s largest regional trade bloc. Boris Johnson expressed interest in having the UK join the bloc. This gives a good opportunity for Brunei – being a founding member of TPP – to work on finding the best free trade deals that could enhance inward and outward investment flow. Next, it would signify an opportunity for the government to strengthen the already strong visa arrangements between the two countries. The human capital exchange must be intensified to enable both countries to tap into the dynamic talents in various areas, such as healthcare, education, oil and gas, technology, and more. The level of demand to build the current industries of Brunei at this point may demand experienced expats and executive professionals from the UK. The TPP agreement would help Brunei attain these goals if the agreement does become a reality.
The potential weakening of the UK pound in the short- and medium-term will enable Brunei to capitalise on the exchange rates when it comes to sending local students abroad and to invest money in the UK economy. There was a point in time in the 80s when the exchange rate for one pound stood at seven Brunei dollars. It was expensive to send students to do their studies there. In 2017, the rate was one pound to one Brunei dollar and seventy cents. With Brexit, there is a high chance that the pound will continue to weaken. With Brunei keen to build the human capital in the country, the best time to send students abroad is therefore now. Next, investing in the UK economy, in the form of cash, bonds, stocks, properties and other financial products, would bode well too in enabling Brunei Darussalam and its MSMEs to diversify their assets in a strong economy such as the UK. The confidence among leaders toward the resilience of the British economy remains high, despite Brexit. Its position as a global leader will continue, which is why investing in the UK economy while it is down will bring about manifold benefits as soon as the economy picks up in a few years from now.
The policy innovation unleashed as a result of Brexit can be studied by Bruneian policy-makers. The policies can also be applied at full speed in hastening the development process of Brunei. The convergence process in globalisation necessitates that every country has to be ready in updating its regulations and laws. Since a large part of the regulations and laws are inspired by the UK, new and upcoming ones pioneered by the UK in a post-Brexit era will give Brunei the chance to emulate. As much as how the UK has bequeathed the rules and regulations of the road (such as driving on the left side of the road), so too can the UK lead in shaping the next trend of tomorrow, which Brunei can simply follow. Areas that should be focused on include cluster and innovation policies, regional policy, monetary and fiscal policy, industrial policy and more. Sectoral focus to enhance Brunei’s economy includes areas in real estate, construction, innovation, creative arts, and more. This is crucial if Brunei is ever going to succeed in the global convergence process.
A greater focus of the UK on the Commonwealth will also give Brunei a stronger say in how the community could be shaped. Last year’s royal visit by HRH Prince Charles in Brunei and around the commonwealth has signified a gesture by the UK government to strengthen the commonwealth’s ties. It can be seen as a preparation to widen the influence and partnership of the UK in a post-Brexit economy. The Commonwealth may not be unique, but it does serve as a platform that enables Bruneians to present themselves in the world at large. When a young social enterprise founder was awarded the Queen’s Young Leaders’ Award in 2016, it showered Brunei a level of positive attention and recognition. This elevated Brunei’s image. This has boosted morale among young people in the country too. The same case for young Bruneians participating in commonwealth events. The platform gave them – young people from a small country with less than half a million population – a say in how things should work. With its highly-educated people, Brunei is poised to shape how the UK and the commonwealth can be shaped in a post-Brexit era.
Finally, by helping the UK economy forward, Brunei will continue to do its part to strengthen the bilateral relations between the two countries. When the late SOAS built the world’s only Churchill museum in the world – located at the site of the present Royal Regalia building – he did so because he admired the Western leader for saving Brunei from the horrors of World War II. The modernity that Brunei enjoyed today rested on the foundation of what the UK has left us right after independence. The Bruneian establishment who have shaped Brunei’s trajectory was mainly Western-educated. It would make complete sense now than ever for Brunei to play its part as the recipients of UKs influence to help its ally and friend in its moment of hardship. While at the same time create win-win solutions that could further strengthen Brunei and UK partnerships in a robust and sustainable manner.
Brexit is a symptom of populism that swept the world order in 2016. It has trembled the UK establishment beyond the core. Amidst the turbulence it faces, the UK government is steadfast in its approach to scouting opportunities outside the EU. Therein lies the opportunity for Brunei to capitalise on. The potential entry of the UK into the TPP agreement can enhance investment and human capital flow between the two countries. The short- and medium-term weakening of the British pound gives us the window to maximise the Brunei dollar in securing better economic value for education and investment. The policy innovation that will be unleashed by the UK in Brexit can be studied and emulated to better Brunei’s position in the changing world order. The greater focus of the Commonwealth by the UK will mean that Bruneians can not only have a stronger say in shaping the community forward but also to better its global image. Brexit can also greatly enhance Brunei-UK relations. The above answers are how Brunei can ride the Brexit storm.