The Caribbean and
Brexit: Potential Implications
By Charlene Small
On June 23 2016, the world watched with wide-eyes as British voters gave a referendum that would result in Britain’s exit from the European Union (hence, the term “Brexit”), catapulting the world into a new era. Now as Brexit starts to unfold, only one thing is certain – uncertainty.
Brexit will be a long process, with experts stating that it will not be for several years before the effects of this movement is truly felt. But this unprecedented event does have a lot of industries wondering what comes next and how to prepare for it. Particularly, the travel and tourism industries are beginning to prepare for a significant change. With close ties to Britain and tourism making up the bulk of its income, the Caribbean is one region that is weighing its options, as it will undoubtedly feel the effects of Brexit.
In fact, the Caribbean, particularly Anguilla, the British Virgin Islands, the Cayman Islands and Caicos Islands, must consider a bevy of potential outcomes. Brexit could create possible complications on the flow of trade and development. It will greatly reduce the region’s ability to influence policy issues in Europe, which was traditionally dependent on Britain’s seat at the “European table”. It will create a range of new obstacles for the United Kingdom’s (U.K.) territories and former dependencies overseas. Finally, Brexit will mean a tremendously long period of uncertainty as Britain’s foreign, trade and development policy begins to reshape.
One immediate impact of Brexit is the value of the British Pound. Since the vote, it has become twelve percent less valuable, a 31-year low. This will limit the purchasing power of the U.K.’s middle class, which will ultimately result in a much slower growth rate for the Caribbean region. The decreased value of the Pound has also impacted travel in the U.K., slowing down tremendously in what is typically the busiest season of the year.
Understandably travel from the U.K., especially to regions overseas, will be hit hard and many of the freedoms British travelers have enjoyed could be under scrutiny. One such freedom to be tested is the European Open Skies agreement, which saw the introduction of low-cost airlines to Britain’s repertoire of jet-setting world travel. Travel regulations will indeed need to be examined, to determine which laws will remain and which will be phased out.
Perhaps one of the Caribbean’s largest concerns (especially for the English-speaking nations and territories) is the loss of their biggest advocate in the European Union. Without the British voice, the Caribbean may face a long road to regain the political position they currently have.
As more of the terms of Brexit are revealed, focus is again brought to the need for the Caribbean to increase economic resiliency in tourism by focusing their efforts on long-term, sustainable planning and investment positions. The Tourism industry in the region must assess how much the U.K. is involved currently, get to know the individuals that are involved, continue to diversify their economies, and ensure collaboration between industry and governments are restored in order to preserve their economic well-being.
Nothing is certain as this movement begins. In fact, Brexit terms include a two-year window of leaving conditions, which doesn’t begin to touch on rebuilding conditions. The Caribbean, just like a large portion of the world, must begin to weigh all of its options, as well as start to make new connections in the European Union in order to monitor legislative activities and ensure its interests are protected.