Not surprisingly though, UK’s decision to leave, had immediate consequences that spread like wildfire. The pound literally dropped off a cliff as the stocks came tumbling down
While only a little over half of the Britons have voted to exit the European Union, the results have triggered panic and anxiety amongst most of the nations of this world. The narrow winning margin in the result (51.9 percent voted for Brexit) clearly suggests it was a close fight between those favouring a Brexin and a Brexit. Not surprisingly though, UK’s decision to leave, had immediate consequences that spread like wildfire. The pound literally dropped off a cliff as the stocks came tumbling down.
As is also clear from the varying reactions to the verdict, that the consequences for some may be beneficial while depletive for some, be it in the short-term or for the times ahead. In this regard, our Union Finance Minister, Arun Jaitley said in an official statement, “As I have often said, in this globalised world, volatility and uncertainty are the new norms. This verdict will, obviously, further contribute to such volatility not least because its full implications for the UK, Europe and the rest of the world are still uncertain. All countries around the world will have to brace themselves for a period of possible turbulence while being watchful about, and alert to, the referendum’s medium term impacts”.
The impact of – the much awaited by some while much dreaded by many more – Brexit, is surely a two faced coin, as was the deciding audience that split into two sects of differing beliefs. While some believe it will encourage free trade with UK in the coming times, others feel it will make things more complicated.
In this regard, Ravi Mishra, Vice President – HR & Admin at Birla Carbon, said, “It will impact negatively as EU as a region is beneficial for India in terms of ease of doing business because of a common currency with more stability. Once Britain exits, India will have to work out its business strategy keeping in mind the volatility based on the political and economic conditions of Britain. We have already seen the volatility in oil market when OPEC is not in sync. Second important area of impact is going to be employability for our professionals”. Mishra also believes that till now it has been easy because of the flexibility we enjoy with EU having many common policies and being governed by standard norms without differentiations. But, in the longer run it will also weaken EU because Britain has a lot of influence in its governance.
Of course the coming times are going to call for meticulous business approach as our revered Finance Minister suggested, it will also test businesses on their human resource management capabilities as people movements from UK to India and from the EU nations to UK will be inevitable. Besides, in times of business volatility, there will be a strong need for efficient leadership and talent engagement. When even the British Prime Minister David Cameron could not get the majority of his population to believe in his vision of staying with the EU, even organisations will require robust efforts in ensuring people of a better future ahead.
Assuring India of its preparedness to deal with the situation, Jaitley said, “As regards, the Indian economy, we are well prepared to deal with the short and medium term consequences of Brexit. We are strongly committed to our macro-economic framework with its focus on maintaining stability. Our macro-economic fundamentals are sound with a very comfortable external position, a rock-solid commitment to fiscal discipline, and declining inflation. Our immediate and medium-term firewalls are solid too in the form of a healthy reserve position”.
Although, only time will tell how things will shape up for UK and the world but as far as India is concerned, it’s assuring to conclude with Jaitley’s words, “As investors look around the world for safe havens in these turbulent times, India stands out both in terms of stability and of growth”.