Daily Times

Divorce is painful. A relationship of over two decades has by its very length of time inbuilt separation issues. Britain’s separation from the EU for the next two years, and its ultimate divorce thereafter is at the moment creating widespread reactions in the world. Rightly so. In an increasingly global world we see an increasingly divided world. This contradictory phenomenon is unsettling and unnerving for most analysts, economists, sociologists and politicians. The early part of the 20th century saw the divide-and-rule policy of the British Empire playing havoc in the subcontinent and many other countries. The early part of the 21st century it is coming back to haunt them within their own continent and with their own United Kingdom. The murmuring of a stronger call for an independent Scotland and a stronger voice from Ireland and Wales has started making the British very nervous and uncertain, and thus the fear of this virus of separatism engulfing the country and the world.

The initial idea of a unified Europe was based on lessons drawn from the history of World Wars I and II. The immense devastation caused in the form of economic depression, the human catastrophe in the form of Hiroshima and Nagasaki bombing, and the extremism of the Holocaust in Germany started a movement for a united instead of a divided Europe. The philosophy behind this movement was that the more there is interdependence the less there would be conflicts, and the more the stakes for mutual benefits. With this as the mission, the EU became one of the most formidable trading and economic bloc in the world. The immensity of this bloc and its benefits especially to the UK can be seen from facts. The single-market dynamic gave UK businesses access to the world’s largest trading bloc with 500 million people and 21 million companies generating £11 trillion in economic activity. Since 1992, the UK’s bilateral trade with EU member states has more than trebled, and trade with Europe accounts for roughly 3.5 million jobs in the UK, around 11 percent of the workforce.

The question then is why leave it. The Leave campaign was based on emotions of individualism and patriotism rather than pure logic. The campaign talked about the EU taking away UK’s independent decision-making, and making it more “common.” The examples quoted were that Brussels controlled and pulled Britain down in its advantage of diversity, and the forced memberships of the Common Agriculture policy and Common Fisheries Policy etc. On the economic front, there were complaints on the high membership fee and not enough proportional benefit. Britain pays direct membership cost of £17.4 billion, which equates to an annual net contribution of £6.7 billion, and it was dramatically rising. There were also arguments on more immigrants getting jobs in Britain than vice versa. Also for the fact that Portugal, Greece, and Spain had all gone through bankruptcy spasms, and the EU had to put its share to bail them out. In return UK budgets were squeezed, and austerity measures had been taken, which made the quality of life of the average Brit deteriorate.

The immediate impact of Brexit has created shock waves. Stock markets all around the world plunged. Pound Sterling lost 10 percent value in Asian markets. Pakistani stock market lost 1400 points. The gloom and doom analysts had a hay day but the shock is now receding. What we are already witnessing is a sobering of moods of both who were for and those who were against Brexit. Markets are trying to steady and EU and UK markets are trying to stem the flow.

While the economics may be easier to manage, politics is going to be a different animal. David Cameron has resigned, and there is immense pressure on James Corbyn, the opposition leader, to resign. EU leaders are in a pensive but threatening mood with some calling for immediate separation proceedings, and other trying to calm the sentiments down.

The most devastating impact has been the polarisation of society. The voter demographics show a clear divide in the socioeconomic strata. The educated, better-off, professionally occupied and younger people voted to remain, and older people with less education and the jobless voted to leave. This clear division in voters represents the dilemma of democracy. When public majority is the final call in a political system, and the majority of the populace is not capable of making rational decisions, policy-making may become a victim of the average intellect factor. That is why Cameron is being blamed for being too adventurous and presumptuous when deciding to go for a referendum on such a sensitive issue. Already there are cries for another referendum, and petitions in thousands are being signed for it, but that may not happen.

As far as Pakistan is concerned the reaction by the government is that is “no problem for us.” The minister of commerce has analysed that there is no immediate impact. and since there are still two years to go for final divorce we have time to react. This is typical, but dangerous. The fact that the pound has devalued almost 10 percent is already a blow to our exporters’ cash flows as they are in any case suffering from high domestic costs. The fact of the matter is that Pakistani exports to the EU have already declined this year by12 percent. If different tariff policies govern the GSP Plus status after Brexit the government needs to proactively calculate its impact, find a solution and get it lobbied before it is too late. However, this sort of strategic policy-making has not been the hallmark of our government, and it would be probably left to our individual exporters to try to diversify their markets to dilute the risks emanating from an uncertain and untogether Europe.

The real danger is the rise of the political extremism in the two most crucial players of the global economy: the US and the UK. Donald Trump, who is a confirmed extremist, visited Scotland immediately after the vote, and is already trying to find friends in the likes of Nigel Farge, the UKIP separatist, whose comments are as disturbing as that of Trump. Boris Johnson who is not likely to replace Cameron but is hugely influential shares the same brash and controversial approach that gives scant regard to how devastating their influence can be on the under-aware voter. Britain resisted for two decades being part of the monetary union by not joining the single-currency Euro, and preferring to keep the British Pound alive. A lot of sentiment behind that refusal was that the Queen’s picture on the pound could not be sacrificed for a “common” currency. Euro, on the other hand, strengthened and became a global competitor to US dollar. Let us hope this hysteria for an independent Britain also does not push Britain, and the world into a fragmented conflicting order where disorder eats away the benefits of global interdependence.

The writer is a columnist and analyst and can be reached at andleeb.abbas1@gmail.com