ISLAMABAD: The Institute for Policy Reforms (IPR) released on Monday a fact sheet on the effects of UK’s exit from the European Union.
It analyses its effects on the world economy and on Pakistan. The fact sheet states that Brexit vote challenges the way economic policy has been run in recent decades.
Citing implications of Brexit on Pakistan’s economy, the fact sheet stated, “The PSX lost about 1,700 points and was still about a thousand points below its pre-Brexit level. It is unlikely that foreign investment will return soon.”
The fact sheet states that Pakistan’s exports will suffer a twofold blow; consumer demand in Britain will dampen from lower growth, and a cheaper pound will increase the value of foreign goods in UK.
It said that UK was a strong advocate for Pakistan’s GSP Plus case in Brussels. “The government of Pakistan must lobby with UK for its continuation. At over $1.5 billion, UK has a share of over 7% in our total export,” it added
“Workers’ remittance can also decline, especially if unemployment grows in the UK. Remittance from UK is about 13% of total. Foreign direct investment (FDI) from the UK will also decline which have been fallen since 2007, in line with the overall trend of FDIs in Pakistan.”
The fact sheet expressed apprehension that prolonged loss in economic growth could lead UK to reconsider its ODA level.
“A spillover to other economies will heighten the effect on Pakistan, as it would for the rest of the world.”
It said that why UK voters opted out of EU held a deeper lesson for everyone. Educated and skilled people voted to stay while unskilled voted leave.
The campaign broad brushed serious issues of immigration, globalisation, and technology into nationalistic sound bites. There was no debate on the real issue of why some people cope better than others with open borders. The fact sheet states that recent policy worldwide has reduced investment in people. Economic exclusion has as much to do with policies at home as with openness. However, a consensus on market fundamentalism in recent decades has put this issue beyond debate. “Warnings about EU exit didn’t affect the leave voters as their options had been closed off a long time ago. An uninformed debate placed the blame solely on the single market rather than on domestic policies,” it concluded.