Sean O'Grady: UK economy to drop out of world's top 10
Monday 07 December 2009
Britain seems doomed to be relegated from the "premier league" of international economies over the next few years - with serious implications for its diplomatic status and international "clout". Stagnation at home and rapid economic growth in developing economies will push the UK as low as 11th in the global pecking order by 2015, according to analysis by the Centre for Economics and Business Research (CEBR).
Having clawed up to fourth place by the start of this decade, the recession has already seen Britain overtaken by China, Italy and France, and it seems likely that the slide will get worse.
Being ranked behind Brazil, India and Canada and only just ahead of Australia in the international league table, would add to existing pressure on the UK to relinquish some of its prized diplomatic privileges, such as the permanent seat on the UN Security Council, and its voting rights and power in forums such as the IMF.
In the Commonwealth, the British monarch's claim to remain head may be undermined if the UK becomes only the gathering's third or fourth most-important economic power. Scottish independence, although unlikely for now, would hasten the UK's slippage and further diminish its global prestige.
Perhaps the greatest shock will be psychological as much as political, as the decline in the UK's relative economic prowess will be part of a shift of power eastwards. Doug McWilliams, chief executive of the CEBR, commented: "Many Britons are only now getting used to no longer having an Empire. Even after the end of Empire, the world's political agenda continued to be set by people with broadly the same cultural framework as the British. But some of those who are increasingly setting the world agenda have a degree of post-colonial resentment against the British. It will be difficult to maintain the UK's high diplomatic profile when we are no longer in the world's top 10."
He added: "We will have to be prepared to put up with economic, political and social decisions made internationally in countries with very different approaches to, for example, human rights. This could prove traumatic."
Although the US will retain its place as the largest economy over the next few years, on present trends the Chinese could overtake it by the 2020s. The only comfort for British diplomats dismayed at their withering influence is that other EU nations seem likely to decline even more rapidly, and demographic changes may raise the UK's voting power in the Union over decades.
Mr McWilliams said: "Since most other European economies are likely to do nearly as badly, it is probable that our relative position in the EU will not change much. But can we maintain a permanent seat on the UN Security Council?"
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