Relegated to the backbench of the UK parliament, George Osborne has a great deal more time on his hands after the very public failed Brexit 'Remain' campaign.
The former British chancellor is using the downtime to investigate why a wave of populist nationalism is currently sweeping across the world - and how it managed to bruise his political career as well as that of former prime minister David Cameron, propel a billionaire businessman with no public service experience into the White House and leave traditional political parties in almost every developed country fearing their next election.
Although during an interview with Arabian Business he says he “would not draw direct parallels” between the current voter rebellion in the West and the toppling of several Arab dictators in 2010, Osborne’s comparisons bear striking resemblance.
“We’re all facing similar challenges, which are, how do we deliver the goods for our citizens? How do we make them feel that the system is working for them? How do we use … new technology to bring people together, not to divide them?” Osborne says prior to making a keynote address at the Arabian Business Achievement Awards, held at the Armani Hotel, Dubai, on November 28.
“Obviously the political systems and the history and the models of society in the [Arab world] are very different from those in Western Europe, but of course there has been very substantial change and some tumult in the Arab world over the last five or six years and there are some common themes – the economic disenchantment amongst the population in countries like Egypt or Tunisia, who felt that they weren’t seeing the rewards from the system even though those countries have been growing and been in recent economic success, [and] the use of social media and technology to organise and mobilise.”
It is not only the blow to his political career that has encouraged Osborne to research the populist phenomena. He fears that as the West turns inwards it is leaving open the door for extremism.
“One of the consequences I fear for Western countries, including the US, [as they are] looking more inwards on themselves and being less engaged in the world, is that that can create some instability and something of a vacuum in areas like the Middle East,” Osborne says.
“Of course there are many complex causes of the Syrian civil war but there’s no doubt that I think there were opportunities to intervene in 2011 [and] 2013; they weren’t taken and the impact of that terrible civil war was felt not just of course in the lives that were lost in Syria but in the strain on countries like Lebanon and the impact of the refugee crisis on Europe.”
Osborne is penning his findings and personal analysis in a book provisionally titled The Age of Unreason.
He began the research after losing his post as chancellor in July - reports say he was sacked by the new Prime Minister, Theresa May, who was chosen to replace Cameron after he stepped down following his Brexit defeat.
“I wanted to try and take a step back now I’m not in the government and understand what’s going on, not just in Britain but more broadly in our world," Osborne says. "What links things like the election of Donald Trump, the Brexit vote, the rise of some of these nationalist parties in Europe?”
He argues that a series of nationalist populist forces in Western countries are gathering momentum through common feelings of economic disenchantment at the same time as the world changes at perhaps its fastest pace in history.
"[It's] leaving some communities feeling left behind, driven by new technology, like social networking tools, which change the way our public discussion takes place and tends to echo back to people their biases and their prejudices and challenges them," he says. "All those things have come together and produced a sense of anger amongst a section of our populations in these Western countries.
"The response of some people is what we need to do is shut ourselves off from the world, erect walls, close off our trade and so on. I think that’s exactly the wrong response, I think that will actually make the situation worse for people who feel like they’re not getting enough of the rewards from the economic system and those who, like me, strongly believe in free markets, open trade routes, open societies in the West, need to make our arguments and need to rally to the cause because I think we’ve taken those things for granted in the West but now they are heavily contested.”
Osborne insists he is not trying to distract from the fact he failed to properly understand or appreciate the angst among constituents.
“[I will write the book] in a way that admits and accepts that I did not get everything right, which is why I was part of a team that lost the referendum, and I want to make sure that I’m learning from that process because I think that will make me stronger and better able to help my country in the future,” he says.
Despite a need to understand why, Osborne says he has come to terms with the Brexit outcome. But the argument is not quite over yet: the status of the UK’s relationship with the rest of Europe post-Brexit remains “up for grabs”.
"We can’t undo the result of the referendum but that doesn’t mean we shouldn’t have strong ties with our near neighbours, with economies and countries with which we have a long history of association,” he says. "If anything, the lesson from history is that when Britain tries to disengage from the continent that is neither good for Britain nor the continent."
Osborne says the UK is leaving the EU as one of the strongest economies of the advanced world, placing it in a position of strength. But challenges remain.
“The question is essentially this: do we see leaving the EU as an opportunity for Britain to become a lower tax, lower regulation, freer trading economy? Or is this the beginning of Britain pulling up the drawbridge, retreating from the world and raising barriers from the world? I very much want it to be the former, not the later.”
The UK’s retreat from Europe is expected to open up doors for GCC economies to boost bilateral trade. Osborne says Cameron's government made “a really determined effort” with the GCC after the relationship had been “taken for granted”.
“I think, to be honest, over some decades, partly because of the long history of engagement between our country and the countries of the GCC, we’ve sort of taken the relationship [with the GCC states] for granted. But David Cameron, myself and other members of the recent government worked really hard to strengthen those ties and as a result we’ve got new security relationships with countries here, like Bahrain and the UAE,” Osborne says.
“We’ve also got incredibly strong economic ties, which are evident not just by the fact that the UAE is Britain’s fourth largest export market outside of Europe, but also that there are 100,000 Britons [living in the UAE] and 1 million Britons visiting ever year. These are really strong ties and I want those to get stronger and I want us to be doing more business and I want us to be working more closely together to keep the world safe.
“I do think, on leaving the EU the importance of those things doesn’t become less, it becomes more. We need now stronger trading ties with the rest of the world and we start with this incredible and exciting part of the world.”
During his six years as chancellor, Osborne became synonymous with tough austerity measures, while supporting capitalism and free trade. The austerity was, unsurprisingly, unpopular among much of the electorate. But Osborne says constituents did not fully understand the scale of the impact of the global financial crisis on the banking system and consequently the damage to their living standards. They had lost faith in capitalism, he says.
GCC states are also undergoing tough austerity measures, including cutting subsidies, reducing public spending and enforcing productivity increases in government organisations.
Osborne says the budget predicament of the UK in 2010 was fundamentally different to the economic difficulties currently being faced in the GCC. The UK’s income did not fluctuate compared to the oil revenues that fill the coffers of most of the Gulf states and thus plugging its budget deficit required long-term structural reforms.
“The measures we took, which came to be known as austerity, were really about getting the country to live within its means. People made all sorts of predictions that it would lead to unemployment, that it would plunge the economy into recession and so on. Quite the reverse; the UK economy grew faster than any of the G7 countries and we created more jobs than at any point in our history – close to 3 million jobs," Osborne says.
"The reason, I think, essentially was we were giving confidence to the private sector that the government had a grip and the economic environment was going to be a stable one against which people could invest and hire people and expand their business.
"Fundamentally, I thought it was our job to create the conditions of a private sector recovery, not to try and spend my way into a public sector recovery. Other people will judge how we did but I think most people think the UK’s economic performance in recent years has been really impressive.
"If we maintain that kind of approach, if we handle Brexit in a way that is pro-trade, pro-business, pro-links with the rest of the world, then Britain can make a success of the coming years and a really key part of that success is our relationship with this part of the world, which has so much more to give.”
While Osborne says he “wouldn’t presume to tell other people how to run their economy”, he offers one piece of advice relating to subsidies, an emotive topic in the Gulf: “I always think that the most important thing is to be very explicit about what you’re supporting and what you’re not so at least the country knows the choices that are being made; hidden subsidies are often the most economically harmful”.
Not known to mask his opinions, it could be said that Osborne follows that advice in all areas of politics. His conclusion on nationalist populism will no doubt make for impassioned reading.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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