Brexit, an arduous path to make Britain great again

            BY TAN CHYE HONG

June 23, the world will be in complete stew about whether Britons will vote for Brexit. According to Bloomberg’s news, those voting for “Yes” and “No” to Brexit come close to around within few percentage point in favour to leave, and younger voters incline than older voters to remain in the Bloc.

Many older Britons are still nostalgic, beguiled by erstwhile glory when Britain built its empire. Harkening back to the bygone days, buoyant with national pride left them into believing that Britain will be great again if it goes solo. Is that true?

Well, at its worst, Brexit does not spell the end of the day. However, times have changed, the notion of what constitutes as a great nation also changed. Great nation pooh-poohs about land-grabbed globally type of empire-building. Especially, the West has not recovered from war-fatigue. Empire building is no longer an enviable task. It is a shibboleth.

A great nation will leverage its strength exerting influence in global affairs for the common good of the world. Our world needs better managed in that all nations abide the rules of law ubiquitously agreed upon and also international norms, peaceful means of resolution of conflicts, better tackle climate change, eliminate poverty etc. It is great because it wins many a heart to care of global good over those bellicose brawns that run roughshod over others, many countries are too inward focus that render paucity of global issues attenuated; such as the migrant issue. It will not go away if Britain chooses to leave, the issue will continue to pester Britain, and its intricacies are better managed by interested parties together. Coupled with the US is receding its global influence; for this, it is monumental if Britain can sagaciously play an exemplary role as a global leader to fill that vacuum. Britain finds back its lost lustre.

Being in the network will largely amplify Britain’s influence in global affairs, size does matter; you aim to have a tilt by getting your voice heard louder as a prominent leader in the EU. Consider the number of EU members in the permanent UN Security Council, in IMF, and other global institutions that play to Britain’s favour. In other words, being in the bloc provides the platform that exalts Britain to a higher level that chimes with great again ambition. It would be blinkered if you vote for Brexit, you deprive your political leader a chance using that platform to leverage on global affairs, and certainly your lone voice is overshadowed by the hubbub surrounding and marginalised by other global powers. You find discomfiting in an arduous path to project a towering figure’s image.

Security is also a major concern that you cannot ignore. The major threat is from the North. In a recent American military report, in the past one year, Russia nuclear submarine activities were frequent in North Atlantic. Although Brexit Britain will remain in NATO, the entire security structure will be chipping away. Strategically, it will be a different ballgame. Exit will only let Mr. Vladimir Putin sneer surreptitiously. A broken Europe enhances Russia military leverage in the rickety region. Now the crux of an effective defence is for the EU to establish an impregnable cohesive front with NATO. After the cold war, many EU countries rest on their laurels, run their defence budget on a shoestring. And now it is dawn on them the real threat coming from Russia. Brexit will certainly aggravate the security concern in the EU. The breakup will derail NATO’s plan, as the two are now separate entities. EU has a written law to treat every member’s security as their own that is the major concern Mr Vladimir Putin ineluctably to take deep contemplation before any military deliberation, not any Britain’s enviable military assets. How NATO works with EU in the rise of the occasion in case of military confrontation has yet been tested. Brexit makes it more tenuous.

On the economic front, there are many papers predict pessimistic outcome for ensuing economic growth after breakup. It is hard to reckon an accurate projection. But one thing is for sure, despite the uncertainty, we can expect short-term adversity at least. Especially badgering the banking sector, this is Britain’s major asset. Brexit will change the trade relationship of British banks with its European business partners. British banks have majority of their customers from EU, and there is also about 51% trade of goods with EU business partners. The breakup will not unwind everything right off the bet, but certainly Britain will be taken as outsider subject to different yardsticks. In other words, Britons will live in uncertainty for a period of time of painful adjustments.

A “nation migrant reception attitude survey” caught my attention recently, lo and behold; Britain ranks second in the world after China and ahead of Germany as the nation most welcome migrants. I am not sure how truthful and representative is the survey. It seems to me anti-immigration campaign forms a chorus for Brexiteers. I think in the broader sense, before we enmesh in immigration issue, we need to recognise there are two different characteristics of migrant issues involved, One is under EU’s Schengen agreement that offer free movement of the people within the EU that borderless is one of the four freedoms of the rules regarded as basic  to EU membership. That rule is an idealism somewhat that lately proved to have severe loopholes; such as in counter terrorism and in refugees unfettered moving around the borderless bloc.

Euro-sceptics raise concern about the loss of sovereignty due to free flow of migrants, last year alone; migrants to Britain hit second record high of 333,000. “The Economist” adopting a forbearing attitude made such a calculation: “EU migrants living in Britain at around 1.8m to 1.9m is roughly the same as that of Britons living in the rest of EU. Many of the British are retirees and impose healthcare costs on their hosts, whereas younger EU workers in Britain pay more taxes than they consume in benefits.” But those advocates for exit have legitimate reason for opposing free flow of workers too. For one, it is to blame the languishing world economy, many unemployed Britons feel threatened by an influx of EU migrants, those in the job worry about job security. Forget the law of one price; it is propitious to take advantage of exchange differences to work in Britain to receive Pounds than Euros in the Eurozone. There are impetuses for Southern and Eastern Europeans move to the rich North for jobs. However, the stark economic reality exhibits a diabolical job market growth. We are all living in macro-constraints. Increasing job seeker supply without corresponding job creation, only make competition intensity worse. There is more than what we simply ascribe as xenophobia. So, there can be a slight twist of the rule that still free flow of people, but job seeking is restricted to the host country’s needs only.

The second type of migrant is refugees; there is a grain of truth that refugee migrant issue is a tussle between humanity principle and economic reality. The major concern is assimilation to the host country’s cultures. The culture diversity between refugee migrants and host countries cannot be more real at every turn laden with political backlash; all hell broke loose, making veritable humanity look all the worse that compelled Dr Angela Merkel quick reversal of her migrant policy. The grave concern is no one can tell the scale of refugee migration. A receptive approach also sends a wrong signal for those risk-taking migrants that they are most welcome to Europe. Refugee migrants aggravate the nascent economic recovery in Europe. So there must be a realistic solution that fits into individual country’s circumstances. But the root causes are the political conflicts in the Middle East and economic poverty in Northern Africa. So, tackle problems out of pickle at the source is much efforts saving than futile receptive approach.

Another reason to vote for “in” is trade reason. EU, a close to homogeneous mature market that breeds middle class willing to spend for British luxury goods and services, both share proximately similar culture, value and belief. It is an ideal market which proximity reduces non-value added transport costs especially for transporting goods to countries farther afield. Relatively high wages and living standard in some EU countries certainly lead us to conclude that trading with EU partners can sustain high wages in Britain.

In any rate, I am a strong sceptic about the following practice: In cost cutting exercise, companies relentlessly first target at labour costs either through furlough or lay off workers in droves to maintain or raise company’s earnings in order to pander the market. I believe any business firm should have a social objective. Competitiveness is not a race to cut wages to match those of the Emerging markets. Why there are so many outcries by economists about wages stagnant, unequal distribution of wealth, wage growth disparity. It is mortified that Capitalism goes the wrong way. You just cannot reconcile conflicting objectives of on the one hand to relentlessly cut wages to lower costs and on the other expecting it also lifting living standard. A business firm should maintain healthy workforce with social obligation to take care of employees in good times and bad. Competitiveness in a sense is not to compare British wages with those of emerging markets. It embraces product attributes, quality as a whole. If that is not the case, why so many Chinese middle class rush to buy European goods? So, it is borne out by evidence that don’t forsake EU market which brings you the lifeline.

Living in a world in EU which is fastidious about rules and regulation is difficult to bear for some Britons, those self-proclaimed free market advocates dislike rule based governance and fret about circumscription compromises Britain’s sovereignty, for example, the European Court of Justice can overrule British courts. The best option is not to opt-out but participate in decision process to make change. Since Britain the second biggest contributor coughed up almost 10 billion pounds tax payer’s money in 2014 alone to EU’s coffer, it should have a say about EU’s policy, even Britain not a Eurozone member. Many institutions confer more rights to member with bigger contribution. IMF also adopts such practice. It is only participation of decision process can change the ineptitude of a Neanderthal institution.

The current institution in Brussel is centralised, garners too much power, but govern a bloc with huge historical differences and cultures that needs great tact and flexibility. Intransigency bounds to botch. The ideal structure is a political union where member states are elected to the council to lead, coordinate, trade-off in order to reach consensus among member states, decide on policies related to common interests. The structure is largely decentralised. To have a better chance to spur reform in current EU, Britain should go the whole hog by participating in the decision making process.  If Britons opt to stay out, everything in EU will still be in situ; you are still immeasurably encumbered by those rules in future dealing with EU.

EU to Britain is like centripetal; the smaller mass are ensnared to the larger mass by short distance. I am not a physicist. It is felicitous to apply the same analogy in the making for Taiwan which abutting its border to Mainland China. The new president thought it can extricate economic dependency on Mainland China by developing southward trading strategy mainly with South East Asia. The quick answer to her strategy effectiveness is: she can’t get away with the gravitational effect of the Mainland China’s centripetal force. Many Western businesses are bedevilled with hate and love about doing business in China, hate because a swaggering China wields its economics’ clout, infiltrates business rules with noxious party politics and ideology to bulldoze blustering practices by fair means or foul; a blasé attitude many foreign investors feel unpalatable. Love because of its vast market that many don’t mind being gravitated. There is no such scruple for Britain and EU. Both share common value and belief, whether you are progressive or conservative. With compromise, things certainly can be ironed out. Nothing is insuperable.

In the nick of time, if you vote “yes” on a whim, your vote will be a dicey twist. Britain will unmoor to EU, and the Scots ditch Britain. And the balance has gone the other way, the “yes” votes cast a pall over the great again hope, and scupper. Britain will be truly shrinking fast in size. It is indubitably in your interest and the interest of the world to vote for “no” on the 23 of June to Brexit to save the day.