DHAKA: From inside the Ministerial corridors deep within the bowels of the Houses of Parliament to the assorted media frenzy assembled on College Green just a stone’s throw away, the prevailing post-referendum sentiment in Westminster is palpable: this is history in the making.
As both sides rationalize the ramifications of the British electorate’s decision to back Brexit, what would have been an otherwise innocuous day had the status quo been maintained, has been transformed to one that will come to define the UK, European (and by extension, global) political economy in the years ahead.
Let us begin with Britain. In some ways the nation awaking to the news that it had become the first country to take the unprecedented yet bold step to withdraw from the EU in its present form, while unexpected by some commentators, was not the biggest shock.
The referendum did after all present a binary option for voters, and in such a closely fought contest where the winning side garnered 51.9% of the vote, either outcome can hardly be considered a shock. Rather it was the concatenation of events that followed that was truly remarkable.
Before it was even time to partake morning tea, Prime Minister David Cameron, who had led the Conservative Party to its first Parliamentary majority in 23 years barely thirteen months ago, announced his intention to resign.
The Leader of the Opposition Jeremy Corbyn has found himself ostensibly facing a vote of no confidence among the Parliamentary Labor Party. Yet it is more than just a day for political obituaries to be written and new leadership ambitions to be forged.
For Britain there is more than one union at stake. Since 1973, the uneasy relationship it maintained with a continental Europe with which it had deeper-rooted ideological differences, was perhaps a microcosm of the distinct disparities in the politics of the constituent nations of the UK.
Suggestions that the EU result may lead to fresh secession referenda in Scotland and Northern Ireland, potentially bringing the largest shift since the 1707 Acts of Union are exaggerated, but undoubtedly the Nationalist vs Unionist flame will be doused with fresh kerosene.
All 32 voting regions in Scotland for example, voted to remain – the figures much in contrast to Brexit supporting England and Wales. The establishment of external borders with European neighbors poses its own set of challenges as the government staves off calls from Sinn Fein for a border poll between Ireland and Northern Ireland, or Spanish claims towards the joint rule of Gibraltar.
The domestic dynamics are fascinating: compounded with issues of geography and national identity are demographics. Almost 75% of under 25s voted to remain while only 39% of over 65s did so.
Amidst this, it is important not to lose sight of the workings of democracy as the will of the voters is to be respected. The analysis should be framed not about Britain’s potentially diminishing role as a de facto authority in international politics, nor being dismissive of Little Britain reverting to the comforts of splendid isolation, but in the context of people exercising their democratic right to have their opinions heard – opinions which are by their very nature, normative and have no objectively right or wrong answer.
It is to Britain’s credit that such a referendum has taken place and sharply brings into focus the arguments by pro-leave lobbyists in countries such as France and the Netherlands, that for all its benefits, the EU is an institution suffering from a large democratic deficit. Historically this event may well be seen as a rare occasion in which the will of the people take primacy over the general consensus of statistical forecasts; a trumping of politics over economics.
On the other hand, the result has engendered optimism about reaffirming the democratic tradition and a nation’s path to self-governance in almost equal measure to consternation about global financial volatility.
The Governor of the Bank of England Mark Carney is seeking to calm a brewing economic storm with an additional £250bn of liquidity. Within the space of a few hours the pound rose to $1.50, then fell to a 31-year low before starting to stabilize.
Major European stock exchanges fared badly as the collateral effects could be felt.
Interestingly, the FTSE 100 blue chip index fell by over 8% prior to rallying to a 3% loss. There will be economic repercussions no doubt, but it is too early to talk the region into a protracted recession; the data will have to be monitored closely next week to ascertain whether it is indicative of longer-term losses or merely a correction in markets that investors had failed to accurately predict.
Navigating the unchartered waters of post-Brexit are simultaneously treacherous as it may be the ‘glorious opportunity’ which Boris Johnson refers to. As the wind dies down from the sails of the debate, Britain has set its course and the Prime Minister seeks to ‘steady the ship’ before handing over captaincy of this small but proud island nation that consistently punches above its weight.
It is clear that the EU itself will have to undergo institutional change to avert shipwreck. Furthermore, in our interdependent, globalized economy, financial market turbulence is will be felt on every shore.
Only hindsight will evaluate whether the new tack is for the better or for worse.
Bilateral trade deals will have to be negotiated, Article 50 of the European treaty will be activated and the compass will point towards a fresh horizon wherein Britain will have to be forward thinking and positive to secure the best deal for its people.
Nautical similes notwithstanding though, the significance of today’s events, is nothing short of a tsunami.
Promit Anwar writes this article
BDST: 1233 HRS, JUN 25, 2016