Brexit and its aftermath

The politics of far right is seeking to disintegrate Europe; Britain has opted out of the European Union (EU). The immediate cause leading to its exit is the immigration issue. The immigrants, according to one point of view, were stealing low-wage jobs from low skilled British workers and this new reality emerged as a serious national issue even alleging cultural alienation and economic insecurity through the hands of immigrants.

A segment of British society felt marginalized from mainstream social and political institutions of the EU; obviously in such a situation blame-game began. The immigrants [mostly] from East European countries stood blamed for causing national disintegration. The referendum has thus opted to go out of the EU.

The consequences of the vote would lead to:

— Disintegration of the European Union. In fact economic integration of Europe was a wise call to prudence in an imperfect real world. Now, driven by myths about sovereignty and invading hordes in the form of immigrants, Britain has ushered in another time of treacherous trial for the European continent and for itself.

— Erosion of investments from global markets. That is why the event has been lamented as a sad day by many European politicians.

— Britain has entered into an area of unknown risks, and it may lead to the break-up of the United Kingdom since Scotland did vote to remain in the European Union by a margin of 62 percent to 38 percent and they may ask for a fresh referendum to split away from Britain. Northern Ireland voted to remain by 56 percent to 44 percent and they may demand unification of Ireland.

— Britain’s economy now stands downgraded by Moody’s.

— A period of grave volatility has begun for the world, and may be the process of European disintegration has begun; it is evident that the central theme of American foreign policy that a united Europe had overcome its divisions stands shattered.

— The European bloc is now more vulnerable than at any point since its inception. The images of past great leaders like French President François Mitterrand and German Chancellor Helmut Kohl hand in hand at Verdun have lost their gloss. The travails of euro, the tide of immigration, and high unemployment rates have led to an eerie collective loss of patience, prudence and memory. And now irrationality is in the air.

In the history of world, one can find many examples where far right-centrist forces exploited and used the weapon of hate and fear to overthrow the existing order. Shungas in Mauryan India exploited the far-right and centrist politics by declaring Ashoka’s ban on ‘Yagya Sacrifice’ as against traditions and customs.

The last Mauryan king, Brihadratha, was murdered in the parade ground and a largely liberal kingdom was overthrown by the centrist forces while disregarding the long-term effects and consequences of such a move.

The results of such politics were disastrous. Once the Mauryans were gone, a big chunk of North India became independent from the control of central rule. And thereafter, for centuries, the Indian sub-continent failed to reunite itself, and its economic, social and political influence substantially diminished. That is a great lesson to learn for those who believe in the politics of fear and sticking to the tradition.

The British resentment has its roots in many things as it seems that it is a revolt against global capitalism. The people have rejected the opinion of experts and the demand of so-called political correctness. There is a serious leadership crisis as the people have no time for the politicians that contributed to a disastrous war in Iraq, and the financial meltdown of 2008.

One thing is sure that leadership crisis has given rise to global instability. The people have been suffering from slow economic growth which undercuts confidence in traditional liberal economics, erosion of borders in the Middle East, influx of refugees and self centeredness are the kind of forces that are combining as never before in history. Rationality should have prevailed; however, it has not.

It is strange that Britain, a country which was part of the group and believed in ‘globalisation’, has now fallen from the lure of its own slogan. It may be noted that globalisation in itself is a force, a force which brings irresistible changes and for that one has to prepare himself.

The nations are required to educate their populations for new challenges. In an economic and political programme, one has to be mentally prepared to face the consequences of globalisation. Immigration is a likely consequence of economic integration process, and the nations becoming part of trading blocs have to upgrade the educational levels of their population to enter into new areas of skills.

Since the inflow of immigrating labour force marginalized the domestic labour force they are likely to blame them. Hence forces who oppose the open-door policy support for right wing thoughts leading to inward looking and of isolation.

As a consequence of vote, fifty two percent of the British population is going to face higher unemployment, a weaker currency, possible recession, political turbulence, the loss of access to a market of a half a billion people, a messy divorce that may take as long as two years to complete, a very long subsequent negotiation of Britain’s relationship with Europe, and the tortuous redrafting of laws and trade treaties and environmental regulations.

In this background we can very well observe that:

— Britain’s London based financial sector is likely to feel the full force of the coming storm.

— In order to create and maintain jobs Britain could seek to save London as its financial sector by making the City more attractive as an offshore haven.

— Such trends can leave pretty big holes in the financial safety net. And now there exists a lot of ‘unknown unknowns’.

— When one does not know what will happen, the optimal strategy might be to assume the worst.(The writer is an advocate and is currently working as an associate with M/s Azim ud Din Law Associates Karachi)

Copyright Business Recorder, 2016