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What’s the deal with the Commonwealth?

Thursday, 3 Oct 2013 | 11:55 AM ET
Gambia's President Yahya Jammeh.
Seyllou | AFP | Getty Images
Gambia's President Yahya Jammeh.

The tiny west African country of Gambia has withdrawn from the Commonwealth, a 54-member grouping of Britain and most of its former colonies, declaring it a "neo-colonial institution."

The Gambian government announced the decision on state television and gave no other reason bar its opposition to institutions that represent "an extension of colonialism." Gambia joined the Commonwealth in 1965 following its independence from Britain.

The British Foreign Office responded through a spokesman: "We would very much regret the Gambia or any other country, deciding to leave the Commonwealth."

(Read more: Sub-Saharan Africa has 'real potential')

The Commonwealth is a group of 54 countries principally united by its ties to Britain under its former empire, although some members, like Rwanda and Mozambique, were not formally British colonies.

Its stated aim is to unite its members by a commitment to peace, democracy, liberty, equality and free trade.

For many Britons and outside observers, the only recognition the Commonwealth gets is its athletic tournament held every four years. Is the loss of Gambia cause for concern for either the U.K. or Gambian citizens?

According to the U.K. Foreign Office, more than £25 million ($40 million) worth of trade flows between the two countries occurs every year. Gambia is also a major tourist destination for over 60,000 Britons each year, with the tourism sector accounting for 40 percent of the country's GDP and with 60 percent of Gambia's tourists hailing from the U.K.

(Read more: South African minister hits out at UK over canceled aid)

While Gambia's tourism trade is unlikely to suffer as a result of its exit from the Commonwealth, it is in danger of losing some economic and global influence by going it alone.

A 2010 report by the Royal Commonwealth Society revealed that a Commonwealth country's trade with other members was a third to a half more than with a non-member. It also stated that over the last twenty years, the importance of Commonwealth members to one another as sources of imports and exports had grown by almost a third.

The UK ceased bilateral aid to the Gambia in 2011, but still gives roughly £8 million ($13 million) per year to the country through multilateral donations to agencies.

(Read more: UK to India: You don't need our aid anymore)

Furthermore, being part of a large bloc of nations, which includes Britain, India and South Africa, does diminish Gambia's clout on an international level, with fewer allies to work with and standing alone as it negotiates on the global market.

The Commonwealth has in the past suspended members for violations to its charter promoting peace, democracy and egalitarianism. Pakistan was suspended between 1999 and 2004 following the military coup of Pervez Musharraf, and was again banned for six months after Musharraf called a state of emergency.

Zimbabwe was suspended in 2002, but Robert Mugabe withdrew the nation from the Commonwealth the following year. It now relies on South Africa, a Commonwealth member, as a key ally, and its economy, whilst collapsing in the mid-2000s, has begun to steadily improve.

Still, the sudden announcement and wording of the government statement from Gambia should come as no surprise given the nature of the leadership of President Yahya Jammeh.

The Gambian head used his address to the United Nations General Assembly to described homosexuality as "more deadly than all natural disasters put together," and labelled it one of the three "biggest threats to human existence."

CNBC contacted the Commonwealth Secretariat for comment, but no one was available.

Contact World Economy

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