Why could No Deal Brexit make Britain a Third World Nation?

A few friends of mine questioned the reality of whether Britain would become a third world country under a No Deal Brexit scenario and I thought it was appropriate to clarify my thoughts for this idea.

First of all, it is important to determine what a third world nation is and disassociate this term with poverty. Despite the Chancellor’s hallowing remarks on the economic impact of a No Deal Brexit, it should still be stated that the United Kingdom would remain a developed nation.

A third world nation, in historic terms, is a nation that did not pick a side during the Cold War – for example, most African and Asian/Pacific nations. However, more recently, the definition of a third world nation has been altered, of course, due to the collapse of the Soviet Union. Therefore, the Borgen Project states that a third world nation has ‘an unstable and inconsistent economy…fewer natural resources…and a copious amount of debt’ that is constantly accruing.

Unfortunately, the UK has had a budget deficit for the last decade and despite the fact the government ran a surplus this quarter, this can largely be placed on strong income tax receipts. Not only that but the Chancellor still does not expect to make an annual surplus till the ‘middle of the next decade’. So, we can establish that the overall debt is still accruing and that the UK has a copious amount of debt by the fact that it has the sixth largest government debt of all advanced nations.

Now, whilst previously Britain was seen as an industry leader in coal and steel mining, those industries have collapsed significantly over the last sixty years, leaving agriculture as the only major industry that takes advantage of the UK’s natural resources. That is not to say that natural resources are in plentiful supply in the UK however, in comparison to most other developed countries, the UK struggles behind significantly. Despite the sheer abundance of oil in the North Sea, the UK’s natural resources fail to provide significance and stability to the economy.

Now I am aware of the lack of focus on the topic question however, this is where a No Deal makes its impact. The UK, as you all well know, has it’s trade deals negotiated by the EU and trade between the bloc and UK contribute around £234 billion the British economy every year. Economically speaking, the UK has had an unstable and volatile past year and a No Deal explicitly means that there will be no deal with the EU on trade meaning this £234 billion contribution to the economy will effectively disintegrate. Furthermore, the Chancellor has stated that borrowing will be £80billion greater each year for the next fifteen if a No Deal Brexit takes place. This statistic alone negates the entire premise of achieving an annual budget surplus by 2025.

A No Deal Brexit leaves Britain with ties to NATO primarily and the lack of relationship with the EU puts Britain without ties to any major trading bloc and completely fitting with the Borgen Project definition of a third world nation.