As the British parliament ties itself in knots over how to exit from the European Union, that nation’s senior diplomat in Washington is cautioning U.S. opinion leaders not to mistake the debates in London for signs of weakness — either in the economic or security domain.
Above all, he cautions, the world should not underestimate Britain’s determination to sustain itself as a global power backed by capabilities.
Kim Darroch, the British ambassador to the United States, did his best on Tuesday to deliver an optimistic note about the convulsive Brexit deliberations to an uncertain audience at the Council on Foreign Relations.
Darroch reminded the audience that Britain’s economy has shown much more resilience than many had expected during the “inevitable period of uncertainty” since the British public voted narrowly in June 2016 to leave the European Union.
Britain has seen “nine years of uninterrupted economic growth,” he noted, adding that the International Monetary Fund (IMF)’s projection for British economic growth in 2019 surpasses that of either Germany or Japan.
Reason for concern
The ambassador’s upbeat prognosis was challenged by former State Department chief economist Heidi Crebo-Rediker, who pointed out that Britain has seen a 25 percent drop in foreign direct investment (FDI) since the Brexit referendum. Darroch acknowledged that FDI “may have taken a hit in 2018,” but argued that in 2017, immediately after the Brexit vote, Britain’s FDI figures “held up strikingly well.”
Crebo-Rediker acknowledged that Britain’s economy has demonstrated “macro resilience,” but countered that forecasts for the financial future of post-Brexit Britain were, in her view, rather poor. She citied estimates that 10 percent of banking assets have already been moved out of the country.
Darroch insisted that overall, his country’s economy “is doing pretty well” and contains “a lot of soundness and strength.” As evidence, he listed a low unemployment rate of about four percent and a current budget deficit of around 1.1 percent of GDP — a figure “many around the world would envy.”
Britain committed
The ambassador, a former national security adviser, also stressed Britain’s commitment to what he described as “our contribution to international security and defense.”
Britain’s current defense spending is 2.1 percent of GDP, second only to the United States among NATO members. “We’re investing tens of billions in upgrading our defense capabilities over the next decade or so,” he said.
Darroch emphasized that Britain’s primary security interest will remain with NATO, but did not rule out other initiatives. Suggesting greater freedom of action post-Brexit, he said, “As an independent, sovereign country, we can choose to cooperate in anything that happens around the world where we think our involvement serves our national security interest.”
Ultimately, Darroch said, Britain’s objective and intention is to “remain as a major global player, arguably even more so in future.”