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Thursday, 30 June 2016

Brexit - An Indian Perspective

Brexit – An Indian Perspective

Written by Dr. Seshadri Kumar, 30 June, 2016

Copyright © 2016 Dr. Seshadri Kumar.  All Rights Reserved.
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On June 24, 2016, the entire world woke up to some stunning news. The UK had voted to leave the European Union. It was an unexpected verdict because polls had been saying that the “Remain” group (which campaigned for the UK to remain in the EU) would win, even though the numbers were close. It is fair to say that few expected the victory. This was true around the world, including in India.

Following the verdict, Scotland, which voted overwhelmingly in favour of Remain in the referendum, said it would want another referendum on independence as it did not want to be forced to leave the EU against its will. The Irish from Northern Ireland, who also voted to remain in the EU, also made some statements about their unhappiness with the result.

The leaders of the EU made some blunt statements indicating their desire to punish Britain for leaving, and to set an example to others who might thinking of copying the British example. Newspapers started analysing the results and explaining how much the UK would lose because of this decision. Shortly thereafter, and not unexpectedly, the pound fell, as did the Euro, and some companies announced their intention to move jobs from the UK to the continent.

This is a continuing story, and there have been several developments since the announcement of the result. My objective here is to record some impressions as an outsider on the state of things in the UK, as well as talk about some of my personal impressions of the UK and what I think this might mean for the UK as they go forward.

In discussing Brexit, I am not going to focus on whether the decision to leave was correct or not from an economic or a social viewpoint. Countless excellent analyses are available through various media outlets for this purpose, and will doubtless continue to be published.
Instead, I am looking at two things: the process followed and its implications, and, now that the decision has been made, the prospects for an EU-free UK.

These are perceptions from a distance. I do not live in the UK, and so do not have the benefit of seeing daily debates on the issue on TV and in the daily newspapers. So some of my observations and conclusions could well be wrong, and I am happy to be corrected. (We do get BBC TV in India, though, and I have followed some of the debates there – but it isn’t the same as living in the UK.)

Despite this, I am hopeful that this outsider perspective on the Brexit issue might still be valuable. One of the lessons in life that I learned a long time ago is that perception is more important than reality. Britons may kindly view these observations as an outsider’s perceptions of the country and what it is going through, and hopefully find something valuable in them – because, to the outsider, his or her perception is his or her reality.

Was a Referendum the Right Option?

Since that historic day, many people who were shocked by the vote have said that referenda are wrong, that they are undemocratic. They point to the 52:48 verdict on Brexit and say, “Look, nearly half the population disagrees with the verdict. How can this be representative and democratic?”

Well, for such people, I have some news. Even in a landslide general election in a democracy, the winner rarely polls over 50% of the vote. That means that in most elections, at least half the country is against the winner.

Some examples will illustrate.

The 1980 US Presidential election was considered to be a landslide victory for President Ronald Reagan. It certainly was, based on the Electoral College system: Reagan won a staggering 489 electoral votes, compared to 49 votes for incumbent President Jimmy Carter and 0 votes for third-place independent John Anderson. But take a look at the vote share, and the picture is quite different: 50.7% of the votes went to Reagan, 41% went to Carter, and 6.6% went to Anderson. Opponents of the greatest victor in US Presidential elections got 49.3% of the vote!!!

President Ronald Reagan won 429 out of 538 Electoral Votes, But Only Got 50.7% of the Popular Vote
Closer to home, the 1984 parliamentary elections in India, following the death of Mrs. Indira Gandhi was the most one-sided election in Indian history. Mr. Rajiv Gandhi’s party, the Congress (I), won a staggering 404 seats out of a total of 514. But in terms of popular vote share, the Congress (I) won less than 50% of the popular vote – it won only 49.1% of the total votes cast.

Late Indian PM Rajiv Gandhi won by the Biggest Majority Ever in India in 1984, with 404 Seats out 514, but only 49.1% Vote Share
More recently in India, in what was widely considered a popular “wave,” Mr. Narendra Modi led his party, the BJP, to a more modest victory in 2014 – his party obtained 282 seats in the Lok Sabha out of a total of 543 and an absolute majority. However, the BJP’s vote share was a mere 31.3% - way short of a majority. Yet that government is making changes that affect all Indians, including the nearly 70% that did not vote for it.

Current Indian PM Narendra Modi, who won an Absolute Majority in 2014 But Only Received 31.3% of the Vote
In 1997, Tony Blair of the Labour Party won the election to the House of Commons in a landslide, winning 418 out of 659 seats. However, Labour won only 43.2% of the popular vote. In other words, a majority of 56.8% of the people did not vote for Labour.

British PM Tony Blair After his Historic Win in 1997
Therefore, in comparison, a 52% vote in the Brexit campaign is far more representative of the voice of the people than most popular elections, and far more democratic. The fact that so many from the Remain campaign dislike the result cannot make the result undemocratic.

Some people may also wonder why it might not simply be enough for the ruling government to decide for the country by passing laws instead of having a referendum. After all, are they not the elected representatives of the people?

The problem with a current ruling government deciding on a singular matter of great national importance is this. The ruling Tory government was elected in 2015 on the basis of a manifesto and promises made during the election campaign. One of the promises was that there would be a referendum on Brexit. The election itself was not about whether to stay in or leave the EU – the manifesto only promised a referendum. So the Cameron government of 2015 did not represent the popular vote on remaining in or leaving the EU.

This is highlighted by the fact that a majority of the ruling government in Britain is against leaving and against the popular verdict. This is the reason Cameron’s decision to resign was correct – given that he did not agree with the verdict of leaving, it would be wrong for him to lead the country in the process of leaving.

British PM David Cameron Announcing His Decision to Resign Following the Referendum Result
(There is also a political calculation there – nobody wants the hot potato of the Prime Ministership when having to deal with the heartburn of many because of leaving the EU. But more on this later in this article.)

Having Second Thoughts – A Second Referendum?

Following the election and public discussion of its consequences, many people seem to have had second thoughts about their decision. There is an online petition to have a second referendum, which at the time of writing has gathered 3.5 million signatures.

Technically, nothing stops the UK from conducting a second referendum, but it will be hard to justify. The demand for a second referendum is primarily coming from the social-media-savvy folks from big cities like London, which voted to remain. But this might send the wrong message. The relatively quieter rural parts of England, which overwhelmingly voted to leave, would not like their voice taken away. They might get the impression that the Remain campaign wants to keep repeating the election until they win.

Besides, what is the justification? That people voted without thinking and without understanding the issues (as evidenced by Google trends after the result on what the EU is)? Surely such irresponsibility cannot be rewarded? Would such an argument be accepted in a General Election? “Oh, we think we made a mistake electing the Conservatives – we only Googled David Cameron today, the day after the elections, and we don’t agree with what he says!” Would such logic fly?

One could rebut that argument by saying that voting a political party in a general election is a temporary decision, which can be reversed after 5 years, whereas the decision to leave the EU is permanent (relatively speaking – there is no clear timeline on when, if at all, the decision to leave could be reversed.) Even then, in any election, “I didn’t know what this would mean and what I was doing” is usually an unacceptable reason for demanding a re-election. It speaks very poorly of the electoral maturity of the British people.

It wasn’t that this decision was taken in a hurry or that people did not have time to understand the issues. The UKIP (UK Independence Party) was formed on the platform of leaving the EU in 1993. It has been steadily gaining in vote share in the UK in European elections in the last 15 years, getting 27.5% of the vote in 2014. The issue of whether to stay in the EU or leave it was a prominent issue in the election campaign of 2015, during which Cameron promised to address the issue by holding a nationwide referendum. The referendum date itself was announced on February 22, 2016, four months before the actual event was held. There is no excuse that the British people had inadequate time to study the issues.

What was the real surprise with a “Leave” vote? Did those who voted to leave really not understand that the reaction from the EU would be harsh? Did they understand only that day that their travel through Europe and their ability to work in jobs across Europe would be severely curtailed? Did they not know that the stock market would tank and that the pound would lose value? All of this had been the subject of countless newspaper articles and debates.

In any case, Cameron has just shut the door on all that talk, despite the millions who signed the petition for a second referendum.

The Surprising Reaction of Boris Johnson

The Brexit campaign has had its share of surprises. One of the big surprises was when Boris Johnson, the former mayor of London, switched sides and started supporting the Leave campaign in February. He joined another defector, the Justice Secretary, Michael Gove. The defection of these two important personalities is considered to have had a decisive impact on the Brexit vote.

Former London Mayor and Prospective PM-in-waiting Boris Johnson
Given this, it was extremely surprising that after the decision to leave the EU, there was no triumphant and exuberant reaction from either of these gentlemen, quite in contrast to Nigel Farage’s very public, triumphant reaction in Brussels, which greatly annoyed the Europeans. Boris Johnson appeared very subdued after David Cameron’s address to the nation in which Cameron announced his decision to resign. Looking at Johnson’s body language, one could be forgiven for mistakenly thinking he had lost and the Remain group had won the vote.

One remarkable analysis by a commenter on an article in the Guardian, which has been cited hundreds of times by now, explained Boris Johnson’s muted reaction in terms of David Cameron’s decision to step down and leave the implementation, including the activation of article 50 of the EU, to his successor, most likely Johnson. There is no guarantee that these were Mr. Johnson’s motivations, but it is certainly a highly plausible theory.

This highly lucid comment described the Prime Ministership after Cameron’s departure as a “poisoned chalice,” because Cameron had abdicated responsibility for leaving the EU, and so Johnson would be faced with three choices:

If he runs for leadership of the party, and then fails to follow through on triggering Article 50, then he is finished. If he does not run and effectively abandons the field, then he is finished. If he runs, wins and pulls the UK out of the EU, then it will all be over – Scotland will break away, there will be upheaval in Ireland, a recession … broken trade agreements. Then he is also finished. Boris Johnson knows all of this. When he acts like the dumb blond it is just that: an act.

(Apologies for the politically incorrect language, but I thought it best to reproduce the comment verbatim.)

The interesting thing about this comment is this. While the consequences of the first two options are quite obvious, it is the third option that is very curious. The third part of the commenter’s theory is based on the idea that “it will all be over.” And why will it be all over?

Scotland will break away, there will be upheaval in Ireland, a recession … broken trade agreements.

If this is the reason Boris Johnson was very quiet, the implications are stunning.

These possibilities had been suggested well before the referendum took place and very publicly. Did Johnson realize them only after the referendum? What kind of leadership is this?

It wasn’t just Boris Johnson’s body language at his address on the 24th. When someone has vigorously pushed the people of the UK for a certain policy, and when the world seems to be crashing around the UK as a consequence of the policy, I would expect the person who spearheaded that initiative to appear daily on television, reassuring the people who followed his advice, and telling them not to worry – “I know the pound is down, jobs are going away, and people are talking tough, but things are going to be all right. We anticipated all this, and we have a plan.” But there was none of this at all while people in the UK are fearful for their future. Instead, Mr. Johnson seemed more concerned about winning the election of the Conservative party so he can succeed David Cameron.

But wait – was there a plan? The fact that Mr. Johnson did not bother to reassure, and reassure strongly, the people of the UK, and tell them there was no need to worry, in nearly a week since the referendum result, raises this obvious question. But here is the thing. While it is not easy to publicly say that you have a plan when you really haven’t the foggiest idea, it is Politics 101 that you don’t go around giving the impression that you are clueless. Not exactly the best thing to do when your aim is to create a favourable impression and generate confidence in a very scared country.

I come to the example of my own country. Mr. Modi got into power promising a much faster pace of development than ever before. The campaign rhetoric was: “You gave them 60 years. Give me 60 months.” While only a fool would expect him to be able to do things at 12 times the pace of the previous governments, there were hopes that he at least had a plan for faster growth. After 2 years, most economic indicators are worse than those of previous administrations, and the performance of his government has been roundly panned by critics for failing to make adequate headway on its campaign promises.

However, to his credit as a politician, Mr. Modi insists that he has a plan and that he has instituted long-term measures that will yield fruit in the next 3 years of his term, even though the effects of those measures are not immediately evident. Whether this is true or not, it helps him retain the support of his core constituency, allows him to parry criticism for at least a couple of years, and buys him time.

The projection of competence in leaders and the generation of hope in the masses is an important part of leadership. The results may not yet be there, but the Indian populace is regularly bombarded with news of yet another “yojana” (scheme) to uplift this or that sector. Whether something actually happens is another matter, as the much-vaunted plan to clean the river Ganga illustrates. The point is that the PR campaign to suggest that the government is actually working on the issues, with a plan in hand, is quite effective. The proof of this is the large numbers of supporters of Mr. Modi on social media advising critics to “wait a little longer” for the inevitable fruits of development.

That the leaders of Britain are unable to infuse the population with even a false hope at a time of crisis like this is indicative of a failure of leadership. Regardless of whether something can be done or not, it is important to work hard to raise the flagging spirits of the public – otherwise, Britain could sink into a deep, avoidable recession. As President Franklin Roosevelt told America in his first inaugural address during the Great Depression, “The only thing we have to fear is fear itself.” If a general panic were to permeate the general public, things could get much worse than they need to. The ideal situation would have been that the Leave leaders had a plan ready to deal with all contingencies, but in the absence of such a plan, the least the Leave leaders could have done is to keep the confidence of the public up, even by lying if necessary.

The lyrics of a well-known old Bollywood song capture the predicament of the British people very well (translated from Hindi):

It is agreed that no one can withstand the fury of the storm
Blame not the seasons, it is the fault of humans:
If the boat sways in the ocean, the boatman steers it to safety;
But if the boatman himself sinks the boat, then who can save you?

It is one thing if the common people are unaware of the consequences of a major referendum. Such ignorance is not desirable, but it is quite common in all democracies. Most people, the world over, prefer not to think for themselves, but to follow the leaders that they trust. But the idea that the leader who was pushing for the UK to leave the EU really did not have a clue as to how profound the implications of such a decision would be is beyond comprehension.

For us in India, that this could happen in a first-world nation like the UK is even more amazing. It even turns upside down some of our most fundamental and deeply-held notions about the world – such as the notion that education and literacy makes for a more responsible and intelligent people who can make mature decisions. Viewed in this light, disappointing as the reports of ordinary Britons Googling “what is the EU” the day after the referendum were, even more disappointing was the idea that the leaders of a nation who were advocating a dramatic policy change for months and years were doing so without a clear understanding of the enormous consequences of that policy change.

As I already mentioned, it is not that we in India are not used to politicians promising more than they can deliver. It is the norm rather than the exception. But it is usually a case of calculations going awry, of political alignments not working out as planned, or of unanticipated changes in the global economy. There are also deliberate exaggerations of what can be achieved, as I mentioned earlier, in order to win elections. But it is usually a case of not having done as much as promised, with things not going exactly as planned. Never a case of not having a plan at all.

We are used to U-turns in policy in India, too – of governments promising to do one thing and doing quite another when in power. Mr. Modi promised communal harmony (“Development for all, in harmony” was a well-known slogan) in order to get elected in 2014, only to have regular statements by its officers and ministers threatening the minority Muslim community and telling them that they could be lynched for what they ate and that they should leave the country if they could not behave. We elected a leader who said he would not have talks with our neighbour Pakistan until they abandoned terror as an instrument of state policy, only to announce, after assuming power, comprehensive dialogue with Pakistan – with plenty of going back and going forward, when nothing had changed on the terror front. We elected a leader who promised to reduce the size of government, only to increase spending on welfare programs.

These things are not unusual in democracies. One of the reasons former American President George H.W. Bush lost the election to Bill Clinton in 1992 was that he had promised in the election campaign that there would be no new taxes, only to renege on that campaign promise during his term as President. 

But the difference is that in all those cases, the new government at least took a few months, if not years, after getting into office, to size up the situation, and then realized that what they had promised was not feasible. Here the realization seems to have happened overnight!

What new information did Mr. Johnson have on the morning of the 24th of June that he did not have on the evening of the 23rd of June that he was not going around town addressing victory rallies after the result was announced? This is shocking beyond measure. It suggests that he advocated a separation from the EU without doing adequate homework and without understanding fully the arguments for or against the motion.

The final chapter in the miserable story of Boris Johnson is the news today that he has ruled himself out of the race for leader of the Conservative Party. It appears that Mr. Gove will run for the position of leader. The utter disaster of the Leave campaign and the complete irresponsibility of its leaders does not need a better testament.

Can Brexit Give the UK Back Its Lost Mojo? A Personal View

Whatever the reasons, and whether this was a good move or a bad one, the die has been cast. Britain is leaving the EU. It is no longer a matter of if, only a matter of when. It is time the Remain campaign followers got used to it. Cameron is doing the right thing now. He wanted the UK to remain in the EU. Let Johnson, who wanted the UK to leave the EU, deal with the problems of leaving.

What does the future hold for the UK, now that a divorce with the EU appears inevitable?

I am not an economist, and am not going to talk about economics here. I am, instead, going to talk straight from the gut, based on my personal experience.

I believe it is likely that Brexit, if handled and viewed correctly, could be a good thing for the UK. Let me explain.

I lived in the UK for 7 months in 2005-2006 on my way back to India after living, studying, and working, for a total of 15 years in the US. I had gotten a job with a private engineering company that was headquartered in the US and UK (the majority shareholder of the private company was an American, but they had a big office in London.) I was hired to start their India operations in Bangalore along with a colleague from the UK. My stint in their London office was to help me get acquainted with the company and its products before starting things in India.

For me, having lived so long in the US, it was somewhat of a shock to live in the UK. The main reason for this was cultural. One early sign of the cultural difference was when I wanted to buy some clothes for myself. Since the office worked 8-5, I could only go out to buy something after work, but I was stunned to find that most shops closed by 5.30 pm or latest by 6 pm! After this happened a few times, I found out that it had to do with labour laws - that making people work late or extra would violate UK labour laws, and so businesses had to close shop. The funny thing is that no one at work thought it was strange. I asked them how stores could expect to do any business if their clients were in offices all day and if they were closed all the time when their clients were free. No one had a good answer...mostly a sense of "well, that's how it is." In contrast, most stores in the US are open at least until 9 pm.

This was just one example of culture shock. The bigger picture was that the gung-ho spirit I had grown up with in the US - the “can do” attitude which I had learned to internalize and which you can find anywhere in the US - was conspicuous by its absence. I worked for a hard-driving American company, so you could see the urgency at work - but I sensed that it was limited to the office. More commonly, as I moved around London, talked to people outside and colleagues in the office, I consistently sensed a subliminal pessimism everywhere. It seemed the very atmosphere was soaked in pessimism - and the constant rains and overcast skies in London did not help dispel that notion one bit. There was little sign of people thinking that the future was bright, of people talking excitedly about their plans for their lives – nothing. Mostly a sense of “we’ll muddle through it somehow.” Neither in the US, where I had just lived, nor in India, where I was moving to, did I sense such a blasé attitude to life.

I realize this is a highly subjective opinion. But it left a strong imprint on my mind. Britons will kindly forgive me for stating my opinion, and be assured that I bear no malice towards their wonderful country.

As I wandered around London on the weekends, and saw Horatio Nelson's statue at Trafalgar Square or Robert Clive's statue in Whitehall, I wondered, “Is this the same country that once justifiably claimed ‘the sun never sets on the British Empire?’” It almost seemed like the loss of Empire in the years following WWII had robbed Britain of that vitality that once led it to be the world superpower for nearly 200 years, and had led to a national loss of confidence that persists to this day.

Now, don't get me wrong. I enjoyed my time in London. That was mainly because I had my fill of the cultural events in London, between the Royal Opera House, the Coliseum, the Barbican, and the SoHo theatres. I visited every major museum in London, and a visit to the Tate Modern was a given every other weekend. St. Paul’s, Westminster Abbey, Big Ben, The British Museum, the V&A Museum, and the London Eye. So much to see. A trip to Oxford one weekend. And I blew most of the substantial salary that my company paid me on eating out at all the amazing restaurants, along with the rather expensive Royal Opera House tickets (₤134 a pop then) and the tickets for all the musicals.

But I also experienced London beyond the tourism, the museums, Leicester Square, Covent Garden, and the South Bank. I once fell ill and had the experience of the NHS; used to shop regularly at the neighbourhood Tesco for my needs; used to go to beer bars in many parts of London where I had the dubious fortune of drinking warm beer (an absolute no-no in the US.) I got a very threatening letter from the government in my mailbox saying they had found out that I was using a TV without a licence and should pay up to avoid consequences. But it was all fun and immensely enjoyable. I had a lovely old Irish lady as my landlady, and I even went to her home on Christmas for dinner.

But I could not imagine living there. The mojo was missing.

And that is what I think this Brexit vote might bring back. The analysts may well be right - that Britain might lose a lot in the short term – companies may move from London to the continent; the pound might lose value; British citizens will not be able to work freely in Europe; and there might be a recession in the UK.

But I also think this exit, if played right by the leaders and the people, can finally give some sense of purpose to a people who, for 70 years, have not really had much to live for.

America came out of WWII feeling like they had won the war. The UK came out of WWII feeling that they had barely survived. 

And that imprint has stayed on to this day, as the UK gradually kept losing its positions of leadership – not only politically, with the steady loss of colonies; but also in technology, as the best scientific research moved from Cambridge and Imperial College to places like MIT, Princeton, and Stanford; and in culture, whereby today most people in the world try to imitate American culture, not British.

The best students from India used to go to the UK for higher studies before 1960; after that, everyone wanted to go to the US. My father’s elder brother left India in 1959, after studying medicine in Mumbai, to do his FRCS in the UK; but my father, in 1960, preferred to go to the US for post-doctoral studies in organic chemistry after doing his PhD at the University of Bombay. Even in the creative faculties, students started preferring the US over the UK. Contemporary news reports consistently refer to the UK as America’s junior partner and, less charitably, as “America’s poodle.” All these things play on the collective psyche of a nation. It took me less than a week to sense this depressing feeling after arriving in the UK.

So, while Brexit may isolate the UK, it may just be the antidote to the pessimism and the lack of self-belief that I think the UK suffers from. Brexit may finally give some purpose to the people of the UK - a nation-building project that might see the UK come out stronger than ever before, with a need to prove itself, its back against the wall, and no one giving it a chance.

As with people, sometimes countries also need a kick in the rear to shape up. The UK has certainly not lived up to its potential in the 70 years since WWII. This is not the same UK that produced Keats, Milton, Tennyson, and Shakespeare; Newton, Watt, Jenner, Turing, and Fleming; Locke, Mill, Russell, Hume, and Shaw; the brilliant folks at Bletchley Park who cracked the Enigma code of the Germans; or the folks who invented radar and helped the RAF defeat the Nazis in the Battle of Britain – to name just a few. But it can again be that nation. 

This is not to argue for a return to Empire, but for a return of that creative efflorescence that led to great achievements such as the industrial revolution and advances in medicine that made Britain a great nation. It was the achievement in science, philosophy, literature and poetry that made Britain the leading power in the world, which in turn led to it becoming a technological and imperial superpower - not the other way around. 

Creative genius was used in the 18th and 19th centuries as a means to building an empire; but that does not need to be its focus today, and should not be. It can be used to alleviate poverty, create new sources of energy, cure serious illness and improve the health of humankind, and so much more.

I am not suggesting that such a reinvention of the UK could not have happened within the EU – it most certainly could have, with the right leadership and the right decisions. But crises have a catalysing action and the ability to make the people of a nation opt for tough choices that are necessary, not only for greatness in the long run, but simply for survival in the present. The crisis engendered by Brexit could be that catalyst.

But for that to happen, strong visionary leaders need to step up. Does the UK have such leaders who can harness the energy of its youth to chart a new, better future? The present crop of leaders does not offer the promise of leading a young UK to the heights of achievement it once attained in the world, if the leaders involved in the Brexit campaign are anything to go by.

Who will rise to lead the British?

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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.

5 comments:

  1. Excellent Kumar. Rock solid logic.

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  2. Good stuff. Where is the constructive leader who rises above the hubris and media immediacy to take a talented population to new heights? The good sides of social democracy and centralisation kill incentive and growth.

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  3. Thanks I enjoyed your article. The media in Britain is extremely pessimistic about brexit but I think you have expressed many of the hopes of leave voters

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  4. Thanks I enjoyed your article. The media in Britain is extremely pessimistic about brexit but I think you have expressed many of the hopes of leave voters

    ReplyDelete