Oh, blimey! What a week it has been in global geopolitics…What started as an intra-party feud over British affaire with the European Union (EU), became a referendum for the Britons, got an enormous build-up, got the whole world suddenly interested akin to a Fall of the Berlin Wall redux, only that was a unification and this is a partition of sorts! With the Scots, who voted to be part of the EU, looking at another referendum on ‘Scexit’ from the UK, we could well have a Divided Kingdom!
Why the Referendum?
Apparently, it was the Conservative Party of the UK or the Tories as they are known had promised a referendum on EU membership as part of their election manifesto. It was to keep their MPs from defecting to the hardline right-wing UKIP party. Apparently, both the major parties of UK, the Conservatives and the Labour Party are internally divided over Brexit. Only the UKIP knew what it wanted and seems like they got it.
So what we have to see is that, an intra-party feud is all it takes to suddenly bring about a referendum which has the potential to change the course of British future, maybe for good.
What about Britain now?
We’ll come to all the possible implications of Brexit on society and economy in a while; first, let’s look at the polity. Britain will go into another election in 3 months because their PM David Cameron feels ‘they are in need of fresh leadership’. Did they convey that to him? Was the referendum on his leadership? Just because you favored ‘Remain’ doesn’t mean Brexit is a referendum on you. Then again, post-Brexit, the first job cut begins with the PM!
Let us look at the society now. British people, just like the US voters, are a divided lot now. A wave of isolationism, racism, xenophobia, ultra-nationalism is on the rise. But there’s a deeper causal factor to this which needs introspection instead of a popular dismissal of the symptoms – the populists and the right-wingers. The benefits of neoliberalism haven’t actually reached the masses of Western World itself while it has enriched the elite. Economist Thomas Picketty points out how the Western Countries like the UK, the USA, unlike the Scandinavian countries, have rising income inequality. So this upheaval is against this openness and neoliberal society, just like communism was against capitalistic ownership of property.
The major discontent of the voters, it seems, is the job losses owing to free movement of labor across Europe, especially Polish immigrant workers in the UK. Therefore, we cannot discount their individual grievances or dismiss all the ‘Leave’ voters as countryside folks. But where Britain is headed, is for us to wait and watch. Brexit was the easy way out, the worries ‘remain’.
What about the economy?
The British Pound has already taken a pounding. It would be unfair to judge the fallout of Brexit based on early market speculations though. The global economy is on a recessionary slope, and the Brexit doesn’t really give it any fresh lease of life. But the majority of Britons’ point of view stressed more on their economic sovereignty rather than being directed by EU rules and regulations.
The Remain camp built a campaign around the fear of ‘economic madness’ to leave EU, but that didn’t seem to strike with many outside of London. London benefits from migrant workers; they are cheaper, they work without many hassles and willing to do all kinds of work. That’s the dream of the capitalistic project – a willing workforce. Moreover, London is aware of the inefficiencies that are bound to creep in as and when immigration laws are made stricter. It’s the revenge of the rest of England on London, so to say. London may well lose out to Frankfurt as the financial capital of Europe.
Trade is a trickier subject. Both the Remain and the Leave camps were convinced that Britain benefits more by being In/Out respectively. The EU is the world’s largest single-market project with a population of 500 million. EU is Britain’s major trading partner and they have unlimited barrier-free access to trade in goods and services. That is bound to be blocked now, with a relook at fresh FTA negotiations which may or may not benefit the British interests. Or, Britain could adopt the Norwegian approach of being part of European Economic Area even if outside EU. EU certainly won’t be very accommodating now. Therefore, uncertainty looms large.
What about the EU?
The institution of EU has been jolted by Brexit. It all started with speculations rife over Grexit which didn’t happen, but now a major trading partner has opted out. There is an undercurrent of anti-EU throughout Europe, even in France and Germany. This is owing to the migrant crisis and the EU Asylum policy which stipulates the member nations to open their gates to all the political asylum seekers. The flouting of norms by Hungary and the tussles between Greece and Turkey over the refugees is symptomatic of discontent under the EU framework.
There is a wave of xenophobia even in Europe in the aftermath of Paris and Brussels terror attacks. This has given more currency to right-wing forces to gather steam in their politics. Parties like National Front of France and AfD of Germany are turning against the EU project. The Dutch might be the next to hold a referendum. Brexit has emboldened the fissiparous tendencies of the other EU members.
Are there any silver linings?
Interestingly, majority of the ‘Remain’ voters were youth. This goes to show that at least the youth are not sold to the idea that immigrants are taking away all the jobs or are intruding and subverting the culture of Britain. Nor are they sold to the idea that Britain will be ‘Great Britain’ on its own which seemed like the biggest fallacy that the Leave campaign spread.
There are silver linings certainly for the emerging economies like India and China who have major trade dealings with the UK. These countries, firstly, will have a much bigger role in global geopolitics, possibly outweigh the UK in the foreseeable future, and secondly, can deal with the UK and the EU as separate entities in various trade negotiations.
Where does India stand?
There are mixed signals from the Indian diaspora on the Brexit vote. There’s a section of Indian diaspora which is far too British to feel that Polish migrants are taking away their jobs and Brexit is a means to safeguard their interests, while there’s a section which fears that they might be discriminated against in this fresh wave of ultra-nationalism and majoritarianism of the natives.
The Government of India’s stand was categorically in favor of Britain remaining in the EU fold. But, as has been stated by the policymakers, India is well prepared for either result. It is interesting because, on the one hand, India may gain from fresh and favorable Indo-UK FTA negotiations bereft of EU, yet, at the same time, if there are revised immigration norms in the UK, there could be repercussions on Indians moving there. It could be in the form of higher visa expenses which are already exorbitant. There could also be restrictions on the number of Indian students and professionals that could reside in the UK. So, India needs to assess its national interests on multiple levels before anticipating the future.
Referendums – The Way Forward?
The only way forward with democracy, they say, is more democracy. Referendums, Initiatives are a form of direct democracy. The Westminster form is a representative democracy where the elected representatives take the decisions on behalf of the people. While one cannot deny that referendums showcase the public opinion, but in this world of heavy propaganda, mis-/dis-information and fear-mongering, there’s a good chance of the electorate being swayed or misguided – just like a certain section of population was sold to the idea that this referendum was for the independence of Britain – especially when they have very little time to decide.
Funnily, Google searches from the UK on ‘What is EU’ spiked right after the Brexit results were announced. What does that say now?
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