Last night I had the pleasure of meeting with members of IESE’s Alumni organization in London to talk about the link between geo-politics and business strategy. The event was part of a series that I have been doing in different cities to call attention to my new book on the topic.
As was to be expected the key issues on their mind are Brexit, Iran, North Korea and the inherent instability fo the Trump administration.
The event was held in the conference facility of O2 in central London and besides graciously allowing about 70 IESE alumni and their friends into the building, O2 provided an innovative and hip back drop to the discussion.
With less than a year to go before Brexit, it seems that Theresa May is facing an insoluble situation. The negotiations with the EU are far from complete and whatever deal they reach will need to be presented to Parliament as soon as October in order be ready for the March 29, 2019 exit,
The view of some of the participants in last night’s event was that the U.K. is trying to get a Brexit deal which will essentially leave things as they are for the finance sector, customs union and maybe even immigration but do so under the political cover of formally leaving the EU.
The problem with this approach is it will essentially give the U.K. a better deal than Norway and Turkey and also set a precedent for other countries to also consider leaving the EU formally but retaining all of the priviliages of membership. It is difficult to imagine Brussels agreeing to something like this.
The UK government has, for example, published a draft on customs union which its own Foreign Minister, the flamboyant Boris Johnson, called “crazy”.
The real sticking point is that nobody in Ireland wants to go back to having a hard border between the six counties in the North and the Republic but of course the U.K. can not cut off Ulster from the rest of the country. Mrs. May is able to govern only with the votes of the Unionists from Northern Ireland and no-one at the event last night could offer a way of this trap.
With respect to some of the top stories around the world, the group in London seemed genuinely alarmed at the decision made by Donald Trump to abandon the Joint Comprehensive Plan of Action as the agreement with Iran is officially called. Barak Obama came out on his own facebook page for a rare condemnation of Trump’s move arguing that the agreement was made by the U.S. with the agreement of Russia, China and the European allies including the U.K., is working and has been backed up by inspections, and was never about changing Iran’s support for Hizbulah and other groups.
For Obama the critical thing was to stop Iran from obtaining nuclear weapons and thus avoid a wider nuclear arms race in the region. Trump, it appears, continues his policy of supporting Saudi Arabia in its face off against Iran and is using israel’s right wing Prime Minister, Benjamin Netanyahu, as political cover.
My view of the agreement is that Iran will try to keep it alive as long as they can because of its desperate need to stimulate its economy and give its people, and especially the bazaries, some good news. My guess is that European politicians like Mr. Johnson will also try to keep it alive in order to embarras the Trump administration.
With respect to Russia, I was surprised that the issue of sanctions and counter sanctions between the U.K. and Russia did not provoke very much debate and it seemed like the participants accepted the situation as business as usual with Putin’s Russia.
What most impressed me by the alums in London is how the English combine a strong sense of right and wrong with a very pragmatic approach. I hope the government takes the same line and finds a way through the Brexit negotiations. What the participants did not see happening was that there would be a change of government and a new administration would just call the whole thing off.