The Commonwealth today is just a loose group of nations tied together by little more than historical links to Britain.
Economic growth, in real terms, in the European Union (see definition below) has been falling decade upon decade since the 1970’s, and more sharply since 1973. . . . In contrast to the EU, economic growth in the Commonwealth has accelerated over the post 1973 period, as shown in chart 2.
The Commonwealth has already overtaken the EU for its percentage share of GDP and is on track to overtake the Eurozone:
The future looks even better:
The IMF produces forecasts for economic growth for the EZ and the Commonwealth for the next 5 years. Given the current crisis in the EZ the 2.7% annual average growth forecast might be thought optimistic. But optimistic or not it pales into insignificance compared with the continued growth expected in the emerging markets of the Commonwealth.
GDP Growth Forecasts (Real terms, average annual growth)
|2012 – 2017|
Source: IMF, World Economics calculations
For many years we thought New Zealand had been disadvantaged by Britain’s entry to the EU. Perhaps the opposite is the case:
Why did we join the Common Market in the first place? What was the knock-down argument used by Heath, Jenkins and the rest? Do you remember? The Commonwealth, they told us, was finished. We needed to be part of an alternative market, one that would grow.
At the time, the claim seemed sound enough. Between 1945 and 1973, Western Europe enjoyed spectacular growth, bouncing back from the artificial low of the Second World War. Britain and her Commonwealth, by contrast, were exhausted and indebted. Much of our postwar decline was caused by successive governments eroding their debts through inflation, unaware of, or perhaps untroubled by, the damage they were doing to our national competitiveness and productivity.
We can now see that our timing could hardly have been worse. We joined the EEC in 1973. Europe’s Wirschaftswunder came to an abrupt end with the oil shock of 1974, and never properly got going again. The expansion came instead in the Commonwealth markets from which Britain had just stood aside. . .
Given the economic weakness of Europe and strength in Asia, we are much better off with growing markets closer to home.
There might be opportunities for us in other developing markets we don’t yet have much trade with too even though we might at the moment have little in common except that historical accident which makes us all part of the Commonwealth.
Hat tip: I was led to the Telegraph through a blog, but have forgotten which. If it was yours, feel free to either leave a comment or email me and I’ll give credit where it’s due.