By Mike Rosenberg
Theresa May‘s surprisingly poor showing in last week’s General Election has created even more uncertainty about Brexit as she no longer has a parliamentary majority and must make a deal with Norther Ireland’s DUP to stay in office. The DUP has already stated that it will demand that the borders between Norther Ireland and both the Republic to the South and the rest of the U.K. will remain open after Brexit and this will complicate the negotiations with the EU. Many analysist believe that Mrs May will lose her place at the head of the Conservative Party as a result of the Vote and will be replaced by either Michael Glove or Boris Johnston.
In terms of formulating business strategy for the medium term, the current situation is very difficult for businesses in the United Kingdom and others which will be affected such as many Irish companies, Spanish wine producers and German carmakers.
In addition to the future of the U.K. and its relationship with Europe, I see uncertainty almost everywhere as I look around the world. A partial list of uncertainties includes:
The impact that Brexit will have on the European Union as the process may be the spark to initiate needed reform or the start of a series of exits which leave the EU in tatters.
The immediate future of the Paris agreement on climate change and the transition to a low carbon economy after the partisan move of the Trump administration to take the U.S. out of it and to roll back the legacy of Barak Obama’s administration on reducing U.S. emissions.
The future of the Trump administration itself after the testimony of the former director of the FBI made it clear that Trump attempted to meddle directly into the investigation of his campaigns connections to Russia in what could be obstruction of justice and grounds for impeachment after the mid term elections in 2018.
The future of Venezuela as Nicolás Maduro’s mafia state clings on to power while normal Venezuelans risk injury, imprisonment and even death to bring democracy and prosperity back to the country.
The ongoing process in Africa to fulfill its human and economic potential despite a number of serious political problems playing out at the national and regional level in different parts of the continent.
The future of China and its neighbors in South East Asia, who are currently in the midst of a huge build up of naval power in the South China Sea as the Trump administration appears to be abandoning the U.S.’s pivot to Asia in economic and military focus.
The future of India as Prime Minister Narendra Modi continues on his government’s ambitious plan to remake the country and even take on its enormous bureaucracy.
Many of these issues are what I call current aspects of the Geo-political situation in that they are tied to a specific set of circumstances and the underlying fixed aspects will eventually prevail. Venezuela, for example has the world’s largest oil reserves and will, most likely, have a prosperous future if it can find away to get out from under its current government and massive debts to China. In a similar line, the transition to a lower carbon economy is a must for the U.S. and the world and Trump will, most likely only be in office till 2020 if he makes it that long.
Others affect longer term issues which one could think of as semi-fixed. The European Union has given much of the continent peace, security, and prosperity for over 50 years and we have come to rely on it as part of the world we know. Semi-fixed aspects normally do not change and can be thought of as fixed, like the geographic location of a country or its mountains, coastline and desserts. Changes at this level can bring about unforeseen consequences for society and business and should be looked at very carefully.