By Frank-Jürgen Richter
Dr. Frank-Jürgen Richter outlines the benefits of doing business in the Commonwealth and analyses the resources available to London businesses In these turbulent times of global economy, trade and investment are fundamental to strengthen the British economy.
Historically, the UK has always been one of the most vibrant trading countries. Commonwealth is the closest connection to the British businesses. Its origin lies in the imperial legacy and the term was coined way back in 1884. It comprises of the territories that were formerly in the British empire.
The common Commonwealth charter ensures that these countries have a common framework of values that include promotion of good governance, the rule of law, and free trade – among others. This gives an excellent framework for doing business.
English is a language which is used and followed across the Commonwealth states. Most of the local laws are also derived from British law. These states are natural markets of cooperation. Businesses from the UK will be at home in these countries with even the road traffic moving the right away!
You can also see reflections of British culture. Cricket remains a popular game with almost all these countries. Such is the bonding that even the diplomatic missions between these countries are called High Commissions instead of Embassies.
Commonwealth countries include developed economies such as Australia, Canada and Singapore, and emerging economies such as India, South Africa, Malaysia and others. There are also countries that hold immense promise including Kenya, Nigeria, Brunei and Bangladesh.
It gives British companies far greater access to the countries that account for over 40 per cent of WTO membership and a combined GDP of over $10 trillion. There is over $3 trillion of trade between Commonwealth countries every year. Fifty per cent of the Commonwealth countries export more than 25 per cent of their total exports to other members, presenting an inherent strength in doing business together.
There is also a huge growing consumer market with the middle class in the group expanding by over one billion people in the past two decades.
While there have been several initiatives within Commonwealth, trade was not an area of focus. Only in 1997, Commonwealth Business Council (CBC) was constituted. CBC has opened opportunities for greater cooperation between business and government to enhance trade and mobilising investment. There is an immense increase in interactions that will lead to greater business opportunities.
There are also several organisations that are focused on developing businesses between individual countries that are Commonwealth members. For example, UK India Business Council is playing a pioneering role in helping British firms do business with India. There are plenty of resources available that British companies can take advantage of.
Only last year in February 2011, Secretary of State for Business, Innovation and Skills presented a paper entitled Trade and Investment for Growth to the parliament. The paper laid out the Government´s plans to encourage exports from the UK, enhance inward investment, and strengthen international trading systems. It also talked about the strength of the Commonwealth and the scope to develop this further to help UK firms compete.
On its one year anniversary, Minister for Trade and Investment Lord Green said: “Encouraging businesses to export more is at the very heart of our approach. We need to ensure business, especially our small businesses, have all the tools they need to flourish, that we strengthen and improve our relationship with trade partners around the world, that we fight protectionism and ensure poor countries can benefit fully from free and fair trade.” He added that they have been able to lay much of the necessary groundwork and have made some real progress. Lord Green revealed that the focus will be on a long-term approach.
This strategy has started giving dividends with a strong focus on boosting international business. With the government´s support, businesses have secured over £800m of high value opportunities overseas in the past one year.
It has also helped over 20,000 SMEs to break into new, international markets. There are also new initiatives including export financing and better relationship management that will go a long way in expanding trade.
Commonwealth remains an ever-expanding place of opportunities for British companies. This is a great time for doing more business together.
Dr. Frank-Jürgen Richter is founder and chairman of Horasis (www.horasis.org), an independent international organisation committed to enacting visions for a sustainable future.