Daily Times

As a self-declared Devil’s Advocate column, it has been the policy to avoid writing about political circuses all together, and Brexit is as big as they can get. However, even otherwise, Brexit is not a homegrown circus and has nothing to do with us; why should we care whether or not the Brits stay in the European Union (EU) or not? So why Brexit? Well, what with all these articles in the local press, fondly reminiscing nostalgically about glorious London and how this vote would change everything, coupled with Pakistani stock market analysts blaming Brexit for the decline of 1,400 points in Pakistan Stock Exchange Index, it was rather difficult resisting jumping into the fray. In any case, writings during the holy month of Ramazan need to be non-economic, simple and entertaining, so why not the circus in a different perspective.

At the outset, however, I must confess my almost complete ignorance on Brexit, and even more embarrassingly, acknowledge that I only became aware of this “most-important-since-World-War-II” event after the vote. Although considering “What is the EU,” and rather astonishingly, “What is Brexit” were popular searches on Google in the United Kingdom (UK), after the vote, my ignorance perhaps does not even qualify as a faux pas. And here we thought that the British were sensible people; and then again perhaps they still are! On the other hand, the comparison between Brexit vote result and mad cow disease of 1992 and its implications, received on Whatsapp, was laughable.

But seriously, the British now want to understand what EU and Brexit are; isn’t it a bit late? And 2.5 million of them have signed a petition for another referendum, because having missed the opportunity the first time they feel wiser now after reading Google search results. With a 99 percent literacy rate, it would be illogical to assert that the British voter was not aware of what was happening in the first place, except that you have to be a financial wizard to even begin to figure out the implications of Brexit, if any, or be a very trusting soul who believes what these financial wizards passionately assert.

According to the pundits, the vote will result in lingering political and economic uncertainty in the UK and Europe, albeit it is not clear how so we have to trust the experts, and also perhaps believe in Santa Claus. The Sterling was supposed to take a beating, because of UK’s record current account deficit, and in the long term Brexit is expected to result in economic volatility and lower growth for the UK. And if that s not enough, the vote will also adversely impact growth in the EU and across the globe; global recessions seem to be becoming a fad. Again while there is no option but to trust the technocrats — especially since they were right — the Sterling has already taken a beating and is at a 30-year low; but is not a weak currency supposed to spur exports, which in turn might reduce the current account deficit? On the other hand, one can never be sure about what these economists say, since nothing ever happens the way they said it would in the first place.

Contrast all of the “Greek” above with simpler arguments. The Eastern Europeans, especially apparently the Polish for some reason, are descending on London and stealing British jobs. Free trade has resulted in battering domestic industry and agriculture, and would eventually be fatal. And everybody’s pet peeve that freedom has been compromised with key governance decisions being taken outside of Britain. The reasons for the result become crystal clear. And top all that up with The Sun asserting in March, “Queen backs Brexit.” Fundamentally, if Brexit had such serious implications, there should have been desperate efforts by government to educate the voters about the consequences in a focused manner, palatable to the common man on the street, to counter the simpler but dear-to-heart slogans.

Frankly, while the BBC is the only credible source of information for us Pakistanis, and hence the comparison is limited thereto, there was a lot more, in fact, significantly and passionately more, hoo-ha during the Scottish independence vote compared with what’s happened now. It was obvious then that the United Kingdom did not want Scotland to leave. That was not so obvious this time around. Undoubtedly, the British bureaucracy and the British establishment are second to none the world over. Was it not obvious to them which way the referendum was going and was there nothing that they could have done to educate the voters about the serious consequences of Brexit — which by the way now includes the revival of the risk of Scotland exiting — before the vote? Or is everything unfolding according to a plan? As someone said, the British just didn’t like Jerry and the Franks in the driving seat.

On the other hand, perhaps the argument that the 99 percent mutinied may not be entirely hogwash. The benefits of free trade, apparently the key benefit of staying in EU, are eventually supposed to trickle down to the poor, but then again that is what the theory says; maybe they weren’t trickling down in reality. Generally, globalisation works better for the owners of capital, rather than the wage-earner, with a real risk that the latter even ends up losing. Perhaps, theory aside, actual statistics and data were not supporting the arguments framed to convince the masses that they were better off staying in the EU.

Notwithstanding all of the above, this perhaps is a perfect example to irk the democracy camp with grinning and twirling my moustache. Hypothetically, let’s assume that Pakistan for any reason ended up having a referendum on whether or not to continue with the China-Pakistan Economic Corridor (CPEC). The intelligentsia is convinced that CPEC is the biggest hope for long-term economic growth and prosperity of the nation. Now assume a miscreant group was to raise doubts about Pakistan giving up its freedom in the process, and now try to predict, especially considering the country’s literacy rate, what the majority will vote. Frightening isn’t it? So why blame the common British, the fault lies with democracy!

Getting back to Brexit, domestic pundits are beating the drum that this will negatively impact Pakistan, with textile exports plummeting. And that is why perhaps the stock market, more than efficiently, corrected itself immediately, albeit the stock market is in any case always looking for excuses to go up or down since a crawling index is hardly conducive for making money. Decline in exports, however, is a serious concern; textile exports have rather worryingly declined even without Brexit and with GSP. Whether or not Brexit does have implications for Pakistan, only time can tell; however, rationally there should be a strategy to tackle any eventual expected fallbacks at the national level, and surely that will be on government’s things-to-do list right after it withers the brewing political storm. In the meantime, so what Brexit!

The writer is a chartered accountant based in Islamabad, and can be reached at syed.bakhtiyarkazmi@gmail.com