ISSN 2330-717X

Of Brexit, Bailout And Ballot – OpEd

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Brexit is not the ultimate parameter in the long but calculated decline of Britain and its power. The rise of the United States and the gradual decline of its relative power in nearly all power measurements have given a complex spectrum of long term impact and fall-out, especially in the realm of economic and power interdependence. Joining the European Union (EU) at that time is seen as the right step forward in promoting regional integration and in encouraging peace-building efforts through the main basis of integrated interdependence, mainly rooted on the basis of the democratic peace theory and the interdependence model. The inclusion into the EU is seen as a non-starter and is a must for the UK, in line with the regional scramble for economic integration and the intended economic stimulus and progress. The events over the past two decades have brought upon systemic and seismic changes that have changed the fundamentals of the EU and the impact on its member states.

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The eventual rise of Boris Johnson from the Conservative Party who is a strong proponent for the Leave EU campaign effectively sums up the sentiments on the ground on an otherwise divided line of calculating the best path forward from the cost-risk calculations. The quarters that have long argued for the UK to remain in the EU have also raised some counter arguments on the positions raised by the Leavers, in that sovereignty and fundamental interests would not be affected or eroded in ways laid out by the Leavers. By remaining with the EU, Britain could have greater influence and say over international affairs, being part of the EU’s community of 500 million people. In addressing the point on sovereignty, Britain has been practicing some measures that left it out of some EU’s stringent grip including the adoption of its own currency, the pound sterling, and opting out of some policies including the Schengen Agreement and migrant quotas.

Pro-EU movements posited that the EU will better provide Britain with the avenue and tools to tackle new threats and security challenges including terrorism and trans-national crime, with the joint resources and pooling of support available. In terms of financial capacity, the UK will always benefit in receiving investments in both the public and the private sectors, leading to more trading. The European single market will provide the single most important access to Britain, and that by leaving the EU, it will bring severe short and long term economic consequences. Surprisingly, this remains one aspect where it is agreed upon by both parties, those supporting and opposing Britain’s membership. The four pillars of freedom of movement of goods, capital, services and people across borders remain the most fundamental and critical tool and progressive factor in sustaining economic drive and progress. A free trade within the EU and a less restrictive trade environment will reduce further barriers and will provide the stimulus for businesses and companies to grow. This will in turn create ripple effects and chain positive implications for job creation and uplifting the economic and business sentiments. If Britain was to exit the EU, job opportunities and the loss of job growth in the millions that are linked to Europe will be at risk. This will also impact critical sectors and industries and will limit the opportunities and the openings for a progressive consumption sentiment.

A series of declining regional and global spirit and values of cooperation and the rise of a closed and inward-looking drive and perspective have enabled the deepening of the impact and relevance of nationalists, conservatives and the far-right voices. This is worsened by the worsening situation and context of the global economic and geopolitical spectrum, with the rise of non-traditional threats and the return of traditional threats, all providing a negative impact on the status and security of national interests and sovereignty. By remaining in the EU, Britain will be bound by the centralized policies and measures from Brussels, potentially weakening its national interests and economic independence. It would also limit its international influence by the missed opportunity of having independent seats at key global institutions including the World Trade Organisation. Being out of the EU would also ensure that Britain will have more say and control over its laws and in boosting domestic security from the full border control and authority.

This is critically important against the backdrop of renewed threat and challenges from the fall-out of the refugee crisis and the ongoing war in Ukraine as well as the Syrian conflict of the past decade. In terms of the costs of membership, the sheer monetary costs of being an EU member amounting to billions could be redirected to other critical sectors that will matter most to the British people, appealing to the quarters that have been championing for greater focus and priority of national interests. Being tied down by the EU, Britain would never capitalize on the openings on trade and expected ripple effects from other major economies including the US and India. Restrictive barriers including bureaucracy and red tape will make it more difficult for smaller industries to create and progress the expansion of business and scale further. By having a more independent trade agreement framework and a defined authority on immigration, the British job market will stand to benefit.

The bailout debate and dilemma have been polarizing, with the intended targets and benefits lost in the process of execution and the real-life measurement of the changes brought on to a country’s reset of its economic path. More so, the impact on the people and the sentiments on the ground are a more realistic and impactful front in determining the effects and efficiencies. In almost all crises of economic nature, the dire needs and urgent context of a financial support and stimulus will supersede and potentially overlook the medium and long term economic consequences. Initial urgent needs will need to be filled but longer term fall-out from tough and hard hitting austerity measures and the long chain of squeezing and painful structural and systemic reforms will often bear immediate and long term implications on social mobility, per capita income and progressive openings for the people. The divide and gap will be further widened and chaos and instability will often ensue with political and socio-economic implications. Already compounded by a financial or economic crisis and as in the case of the Eurozone debacle, the subsequent hard hitting measures taken in the name of fulfilling the bail-out criteria will make it a double whammy for the common people. This will in turn lead to social and political unrest with other chain effects. As in the case of Greece, lacking any fundamental and structural changes in addressing the root causes of the systemic divide and gap in the society, the measures taken to adhere to the bail-out requirements are compounding the already dire plight faced by the lower income groups.

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Some of the austerity measures can be counterproductive as they can hamper the economic recovery, reduce the tax revenue and further add strains to the disposable income of the people hardest hit. In Greece’s case, it is widely acknowledged that the austerity plan could cause the shrinkage in Greece’s economy and would bring minimal impact on the debt burden and deficit. In reality, the debt actually grew as a percentage of the economy after austerity measures were imposed. The long-term reality is that all economies will eventually recover, just differing in depth, pace and level. The real question that will beg the policy making decision of the policymakers will be which of the approaches taken to reset and rectify the long-standing economic problems can present the least damaging approach to the recovery process and the viability of the people to remain afloat. Arguments have been raised on the different outcome and rate of recoveries as well as the combined effect on the people had different policies been practiced during the Great Recession and the Eurozone crisis, apart from the conventional and opaque tough handed measures imposed and taken.

The aftermath of this remains stark and apparent, from economic effects to social breakdowns in the fabric and dynamics of the society. Poverty and unemployment rates as well as the soaring social issues remain at the forefront, but most importantly, the long term economic fundamentalism and institutional resilience will need a comprehensive and multi-faceted correction in adjusting to the long road ahead of recovering both from the initial crisis and the subsequent chain implications of the solutions being sought to remedy the problem. As much as a paradoxical and counter-intuitive spectrum of ironies is being opened, the lost opportunities and openings provide further barriers and pains in the recovery process, adding to more ‘what ifs’ and the different outcomes. The opportunity costs have been immense and the potential reinforcement on critical infrastructure and long term growth areas has been limited and subsided.

Moving forward, the entire approach and systemic fulcrum of government to people relations and vice versa, will need a practical and future driven reset and calibration. Old dogmas and norms are again cast to the forefront debate of efficacy and efficiency. The old social contract methodology and approach between the rulers and the people has been once again revisited, prying open new perspectives and debates. The masses have been time and again subjected to the repeated message that if they produce more and work harder, they will reap better benefits in financial returns and economic security, and that the governments will eventually intervene in ensuring their economic well-being and survival. This indivisible line of mutual expectation and assurance seems to be fast eroding, with the reality on the ground in Greece and many others proved to be otherwise. With hopes for a swift recovery in the aftermath of the Covid-19 pandemic effectively buried by the moves by the Kremlin in Ukraine, EU and its comparative relevance and power projection as a supranational entity in its sway will suffer parallel decline. While there is practically no chance for Britain to regain its former glory and to overtake the US in power parity and dominance at least for this century, it will need to maintain effective and credible alliance making capacities and to ensure constant presence in key chokepoints in the Indo Pacific in proving to be a worthy and competent leader in the Western periphery, both in standing up to the Kremlin and Beijing. Power projection capacities in this region and in maintaining close historical and colonial ties in strategic states will ensure sufficient staying power and relevance both in providing Washington with credible supporting options and in securing Britain’s internal security and survival demands.

Compounded by the rise of right wing movements and sentiments with ultra-nationalist tendencies in rejecting the embedded grip by Brussels, moving away from the controlled and pressurized context of a grouping might spur new openings for autonomous derivation, despite the loss of the common economic and trade advantages. The return of traditional threats and conflicts and in facing the inevitable regional and global arms race with unavoidable security dilemma, it is really a no win situation for Britain or regional players to risk national survival and interests on the pretext of shoring up economic resilience. If push comes to shove and to secure political wins and ultimately in safeguarding the survival of states, emerging supreme in the geopolitical and hard power competition remains the only and ultimate option.

*Collins Chong Yew Keat has been serving in University of Malaya for more than 9 years. His areas of focus include strategic and security studies, America’s foreign policy and power projection, regional conflicts and power parity analysis and has published various publications on numerous platforms including books and chapter articles. He is also a regular contributor in providing op-eds and analytical articles for both the local and international media on various contemporary global issues and regional affairs since 2007.

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