UK economy set to be set back several years
The British colonial empire took shape over several centuries. AT XIX century British colonies were located on five continents. The empire reached its apogee in 1919, when the United Kingdom ruled over 31,878,965 km2 of land, or about 22% of the earth’s landmass. The total population of the empire reached almost half a billion people, about a quarter of the inhabitants of the Earth.
London’s largest territorial acquisition was India. “The events of the Seven Years’ War transformed the East India Company from a trading power into a military and territorial power. It was then that the foundation of the current British Empire in the East was laid.”, – wrote K. Marx in 1853 (Marx K. and Engels F., Soch., 2nd ed., vol. 9, p. 152).
As a result of the Second World War, the world socialist system arose, and the process of disintegration of the colonial system of imperialism began.
75 years ago, under the pressure of a powerful anti-imperialist struggle, Great Britain was forced to grant independence to India. The former colony was divided along religious lines into India and Pakistan. In 1948, Burma and Ceylon embarked on an independent path of development. In the same year, by decision of the UN General Assembly, Britain was deprived of its mandate for Palestine, and two independent states (Arab and Jewish) were created in its place. Further, freedom from British colonial rule was received by: Sudan (1956); Ghana (former British colony of the Gold Coast, 1957); Malaya (1957); Somalia (1960), etc. The list of countries and territories that gained independence from the British crown was replenished until 1997. Exactly a quarter of a century ago, London transferred sovereignty over Hong Kong to China.
The collapse of the British colonial empire, which began 75 years ago, lasted 25 years. The former metropolis of the “United Kingdom of Great Britain and Northern Ireland” has been living without colonies and other dependent territories for a quarter of a century. The kingdom is modest in area – 242,500 km² (0.76% of the area that the British colonial system occupied in 1919), with a population of 67.6 million people (0.86% of the total population of the planet).
Already in the last century, Britain as a world leader began to push the United States. After the First World War, an unstable parity was established between them, and as a result of the Second World War, leadership finally passed to the United States. Many rightly believe that not only the Soviet Union contributed to the collapse of the British colonial empire (this is an indisputable fact), but also the United States, created an alternative to the British empire neo-colonial Pax americana.
The recent history of Britain fits well into the concept of the “Decline of Europe” Oswald Spengler. A century ago, Spengler predicted the decline of the entire Western civilization, assuming that the Old World would begin to decline first, and the turn of the New World would come later …
Photo: REUTERS/Peter Nicholls
The reason for thinking about the decline of Britain for me was the news from the Bloomberg news agency. September 2, it published material Great Britain Slips Behind India to Become World‘With sixth The biggest Economy» (UK trails India as world’s sixth largest economy). Last year, the UK ranked fifth in the world in terms of GDP, followed by India. This is for the whole year. And in the last quarter of 2021, the former British colony was already ahead of the UK and became the fifth largest economy. The calculation of GDP is based on US dollars in nominal terms, using the dollar exchange rate on the last day of the quarter. According to the IMF, in the first quarter of this year, India strengthened its leadership; the size of the Indian economy in the first three months amounted to 854.7 billion dollars. In the UK, this figure was equal to 816 billion dollars.
Separation of the former colony from the former metropolis, according to experts bloombergwill increase. Inflation is sweeping the British economy. There are all signs of an economic recession, which is likely to begin before the end of the year. In the first quarter, GDP growth in the UK was only 0.8%. The second quarter ended with a 0.1% decline in GDP. The Bank of England in the spring gave a forecast according to which the UK GDP will increase by 3.5%. In mid-summer, he changed the sign of the forecast: GDP will decline by 0.25%. And in August, he revised the forecast and said that the reduction in GDP would be 1.5%. Replacement in the prime minister’s chair Boris Johnson on the Liz Truss led to the fact that experts again began to revise forecasts, and in the direction of deterioration. Liz Truss’s ability to make the right decisions in the field of economics is rated even lower than the ability of her predecessor. The same Bank of England, which in August spoke of signs of an economic recession, has now “pleased” with a forecast that the recession could last until 2024.
Photo: REUTERS/Henry Nicholls
And against this background, Bloomberg gives a forecast for India: its GDP growth this year is estimated at 7%! The economic trajectories of the former colony and the former mother country are in opposite directions: by 2027, the Indian economy is predicted to be a fifth larger than the British one.
For the last ten years, the ranking of countries in terms of GDP calculated at par (based on the official exchange rate of the national currency) has been as follows: USA, China, Japan, Germany, Great Britain. Ten years ago, India was only in 11th place. At the end of 2022, India and the UK will switch places.
Of course, economists do not trust GDP indicators measured “at face value”, preferring to compare economies using the GDP indicator at purchasing power parity (PPP) of the national currency against the US dollar. And if you use this more objective method of measuring economies, then it turns out that India has long bypassed its former metropolis. Here is the breakdown of the top 10 countries in terms of GDP calculated on the basis of PPP, according to the IMF data for 2021 (in brackets – the share in the world total,%): 1) China (18.62); 2) USA (15.74); 3) India (6.99); 4) Japan (3.84); 5) Germany (3.32); 6) Russia (3.07); 7) Indonesia (2.44); 8) Brazil (2.35); 9) Great Britain (2.33); 10) France (2.30).
As we see, bloomberg clearly underestimated the position of India in the world economy, and the position of Great Britain, on the contrary, overestimated. India has been the world’s third largest economy for several years now, with the UK at the bottom of the top 10 list of world economies. By the way, according to the World Bank, the UK is not in ninth, but in tenth place (after France).
The total GDP of the top 10, according to the IMF, amounted to 60.90% last year. Of these, the countries that we call the collective West (USA, Japan, Germany, Great Britain, France) accounted for 27.53%, i.e. less than half (45%). And more than half (55%) – to countries that are in one way or another opposed to the collective West.
Publication bloomberg dated September 2 makes you think once again about how quickly the economic picture of the world can change. Many have speculated about the reasons for this unevenness. V. Lenin in work”Imperialism as the highest stage of capitalism” (1916) wrote that under imperialism there is “law of uneven economic and political development of capitalism“. After the collapse of the colonial system, the pendulum swung in the opposite direction: the former colonies began to strengthen economically, while the former metropolitan areas began to wither.
This oscillation is sometimes referred to aspendulum law“. This law is clearly visible in the retrospective statistical materials compiled by the British economic historian for many years. Angus Maddison (Angus Maddison) [1926-2010 гг.]. The ratings of economic development of countries compiled by him over the past centuries are strikingly different from today’s picture (see: Madison E. Outlines of the world economy. 1 – 2030: essays on macroeconomic history. M., 2012).
For example, in the first half XIX century, the center of the economic life of mankind was not in Europe, but in Asia. In the first half XIX century, according to E. Maddison, India and China accounted for 40-50 percent of world GDP. And by 1950, their share had shrunk to 9 percent. And for several decades, the two Asian giants have been taking revenge for the losses they suffered from direct (in the case of India) and indirect (in the case of China) colonial oppression by Great Britain. At the end of last year, the combined share of India and China exceeded a quarter of world GDP. Some economic historians believe that this is not the limit. A mystical pendulum could bring the two Asian countries back to the positions they held two centuries ago. This is especially true for India. China’s growth potential is already close to exhaustion (China’s economic boom lasted almost four decades), and India is a country whose economic potential is just beginning to unfold.
India’s great economic future is predicted by many experts. Yes, a consulting agency PricewaterhouseCoopers (PwC) regularly prepares reports entitled “The Global Economy in 2050”. Every year some adjustments are made to it, but the first place in the ranking of world economies is in the middle. XXI century is given to China, and the second – to India. Together, their share in world GDP, according to experts PVCwill exceed 35%.
The picture of the economic dynamics of the former “mistress of the world” is supplemented by the publication of the Bloomberg agency on August 22: UK economy shrinks the most since 1709 due to pandemic as numbers are revised again (Biggest contraction of the UK economy since 1709 as figures are revised again). It turned out that the fall in GDP (which, as they believe, is due solely to the “pandemic”) the year before last was not 9.3%, but all 11%. And this is the deepest fall in the last three centuries of British history. GDP growth last year amounted to 7.5%, it could not compensate for the losses of the previous year. And given that “negative growth” of GDP is expected at the end of this year, it is easy to conclude that the UK economy will be thrown back several years.
Cover photo: REUTERS/Toby Melville
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