Emerging powers are giving us a wake-up call: We must earn our place in the world
AS MINISTER in the Foreign and Commonwealth Office responsible for Asia and Latin America, my brief includes most of the world’s emerging economies. China, Brazil, and India have had the most column inches devoted to their meteoric rise, however some of the smaller countries have also made incredible leaps in the last few years. South Korea, embracing capitalism and democracy, has moved in a generation from poverty to being the world’s twelfth largest economy.
An important part of my overseas travel has been to promote Britain. But another part of that process has been to draw the lessons we need to learn.
In doing so, it is important to hold firm to certain key principles. First comes free trade, and the outward-looking mentality that underpins it. Second are the wider freedoms that support free enterprise and free societies. And finally, Britain’s unique selling points, which help give us the chance to turn this revolution into our opportunity.
The single biggest driver of the emerging powers revolution has been the embracing of free market economics and the remarkable opening up of world trade over recent decades. This is the UK’s greatest opportunity. I do not believe that there is another country where the free trade reflex is so hard-wired into the national consciousness. True, there can also be a protectionist reflex, and the case for free trade is one constituency MPs still have to keep making on the doorstep.
But whether it is car workers in the northeast or financial workers in Canada, the simple truth is that free trade and investment are essential to our prosperity. And that will only become even more emphatically the case as the emerging powers grow richer.
My second guiding principle is the freedoms and values that need to accompany globalisation. Freedom and prosperity are creating new opportunities for ordinary people. Our approach to the emerging powers is guided by the belief that these values are not Western, but universal.
In this new order, Britain must harness our third opportunity, certain unique selling points. Britain remains a global power. Our institutional influence in international affairs is vast. Our network of bilateral relations with every major country in the world is sophisticated and effective. We are the home of some of the world’s leading publications, academics and cultural institutions.
Britain has the characteristics to prosper, but these are not nearly enough. Britain needs to be far more competitive in a fast-changing world. We need to overhaul our thinking and our attitudes. The alternative, even allowing for Britain’s existing areas of advantage, is benign decline.
Adapting to the new world order is a national task, from which almost no part of our government or public life should be exempted. To be competitive in the world, we need change at home.
It is unsustainable for the British government to be borrowing, as we currently are, almost £400m every single day. Tackling this appalling deficit should be the duty of all politicians in Britain. We are already getting close to spending £1bn every single week just on the interest on the debt. That is more than we spend on education. More and more debt is a recipe for ruin and a risk to our national security.
We cannot assume that Britain, or Europe as a whole, has an automatic right to be the most prosperous or influential continent. By the middle of the century Europe is forecast to have 5 per cent of the world’s population and 10 per cent of its economy – richer than average, but much less so than a generation ago. In terms of growth, Europe is still moving fast in the wrong direction, being outperformed and overtaken by every other continent in the world.
We need to think how we can be more productive, not come up with more regulations which make it harder to employ people and less worthwhile to work. We need to question our other big assumptions, about what is affordable, and the role of the state. It will be difficult to remain globally competitive when the state is spending 45 per cent of GDP. It will be difficult to remain globally competitive with higher marginal tax rates than in comparable economies. It will be difficult to remain globally competitive with a rapidly declining percentage of the population being of working age.
Britain remains a major force in the world, economically, politically and culturally. But we have no pre-ordained right to be wealthier, more successful and more influential than other countries. We earned that status in the past through invention, adventure and enterprise, and we need to earn it again for the future. Without change we will decline. Far from being the frightening option, change is actually the safer long-term choice.
Jeremy Browne is a Liberal Democrat MP and minister of state for the Foreign and Commonwealth Office. This is an edited version of an essay from The Next Ten Years, to be published by Reform on 1 March.