Tag Archives: Britain

Death of Brexit: Return from the Right

The 2016 Brexit referendum in the United Kingdom (UK) was the surprising outcome of a national plebiscite. Initially dismissed as a long shot by many political scientists, there is now a degree of consensus that the result reflects a delayed response to the effects of globalization in general and to the 2007-2009 Great Recession in particular. The problem is very real as large groups of blue-collar workers see their opportunities decreasing and their jobs moving to cheaper labour markets in Asia and elsewhere. As the dust settles on the referendum, the question remains whether Brexit is really the cure for the malaise that led to it or whether more sober voices in the United Kingdom will drive alternative solutions.

Project Fear Redux

In the campaign before the vote, the Remain argument relentlessly focused on the likely economic consequences of Brexit, arguing that living standards would fall and jobs would be lost as investment dried up. Brexit campaigners labelled this “Project Fear” and mocked the professional economists that issued warnings as “know-nothings”. For a time, it seemed the Brexiteers were right.

After Brexit day in June 2016, the United Kingdom’s economy continued to prosper and showed little evidence of damage other than an immediate 12-15% fall in the value of the British Pound relative to both the US Dollar and the Euro. In fact, in 2016 the UK’s economy remained one of the best performing of the G7 large Advanced Economies, growing at 1.8%. It was as if the ship had hit an iceberg but nothing had changed up on deck. Though Brexiteers continued to ridicule the “know-nothings”, by the end of 2017 a very different story was emerging.

The United Kingdom is now one of the slowest growing of the G7 Advanced Economies, likely to register only a 1.5% growth rate for 2017. Investment is down and inflation is now over 3%; the highest in the G7. Inflation adjusted wages and consumer confidence are also falling with particularly dramatic decreases in car sales, down over 12% year on year in October 2017 according to the Financial Times. As the threat of Brexit grows imminent, the International Monetary Fund is very clear about Brexit’s increasingly negative effects on the United Kingdom’s economy. More worrying, the British Government cut its own economic growth forecasts for 2018 to 2022 more heavily than it has for any other five-year period in the last 40 years. Private forecasts are also broadly of the same view.

It is now abundantly clear that the so called “know-nothings” were not so much wrong as simply guilty of underestimating the strong forward momentum of the British economy at the time. A sharp fall in the exchange rate following the June 2016 referendum, combined with the Bank of England’s accommodative decision to cut the UK Base Rate from 0.5% to 0.25%, certainly aided the economy’s short-lived momentum. If the central bank did this with the intention of softening the blow, it did not last long. Project Fear it seems, is making a comeback.

The Will of the People

At this point, avoiding Brexit will not be easy. Any reversal of Brexit depends upon a significant and sustained shift in public opinion. Without it, Parliament is highly unlikely to vote down the Government’s impending deal, due in late 2018, that will set the terms for the UK’s exit from the European Union (EU) in March 2019. The earlier deal with the EU in December 2017 provided proof—if it were required—that the UK is being out-negotiated by a much better prepared team in Brussels. Indeed, on all main points of agreement so far, the UK has accepted the EU’s demands; something many Brexit supporters are starting to see as a sign of the UK’s weak negotiating position.

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British Prime Minister Teresa May meets with Jean-Claude Juncker, European Commission President at the EU headquarters in Brussels. Photo credit: https://www.voanews.com/a/eu-brexit-talk-next-phase/4154812.html

However, Britain’s poor negotiating performance in the halls of the European Commission in Brussels will not turn the tide alone. This will only happen when ordinary men and women begin to suffer from Brexit’s negative consequences. Given the way the economy is now slowing, it seems the average Briton is in for some very poor economic news over the course of 2018. In the initial referendum, 48.5% voted to remain in the EU but polls suggest the British are changing their minds. The most recent poll taken just before Christmas shows 53% now wish to remain in the EU, with a noticeable shift by middle and working class women concerned about potential impacts on jobs and family finances.

As this national change of heart accelerates in response to bad economic news, calls for a second referendum will become louder. The Government can and probably will ignore them initially but once the polls start showing 60% in support of a second referendum and/or a desire to stay in the EU, the dam will break. Just as “the will of the people” was used by the pro-Brexit media to bludgeon the current Government into a Brexit-at-any-cost policy, so too will public opinion embolden Parliament to stop the Government on this reckless path.

Different Solutions

Addressing the challenges of globalization, the Great Recession, and the loss of secure jobs for average to low-skilled workers remains a critical policy challenge for all Western governments. And whilst the populist spasm that resulted in Brexit is understandable, it is surely not the solution. The alternative to the low tax and small government mantra of right wing populism is likely to be a centre left agenda comprising more state intervention and investment in public services such as healthcare and education. Experimentation with more radical ideas such as a citizens’ basic income may also become more widespread, especially as artificial intelligence and other job destroying technology washes over the economy.

All this favours Jeremy Corbyn’s Labour Party, which is committed to a more radical, anti-globalization agenda than the current Brexit-supporting Tory Party. With the British anti-globalization fight thus championed from the left rather than the right, it is possible the same phenomenon could take place in the United States, reversing the rightward trend occurring in politics there since 2012. If events in the UK continue this way—a prospect which seems likely—the death of Brexit could mean a return from the right. This effect will be felt not just in London, but in Washington too, producing a global impact that will make an increasing number of British voters very proud indeed.


Adam Pharaoh is a former Auto (Volvo & GM) and Pharma (J&J) industry executive that now runs Pharaoh & Company SPRL, a consultancy on Strategy and Organisational challenges, mainly in Europe and Asia. He is a close observer of UK and EU politics and contributes regularly to debates in The Financial Times. He lives in Brussels.

For more on Brexit from The Affiliate Network, please see:

The Sky is not Falling on the European Union by Victor Angelo

The Spark to Redefine “Europe” by Nick Avila

With or Without the EU: Brexit and Security by Victor Perez-Sañudo

 

 

A New Weapon in the South Atlantic

In 1982, a continuing dispute over a few small, sparsely populated islands in the South Atlantic became the catalyst for a brief war between Argentina and the United Kingdom, resulting in a decisive British victory.  Paying tribute to the long and complicated history of these islands, Museo Las Malvinas (Malvinas Museum) is located on the grounds of the former Naval Officer Mechanic School and is now one of the newest and most prized museums in the Argentine capital of Buenos Aires. Since its opening, the museum watchtower has maintained vigil over the main highway running through Buenos Aires, proudly displaying the word “Sovereignty”, and reminding commuters of Argentina’s enduring ambition to govern these otherwise undistinguished islands in the South Atlantic.

According to the March 2016 United Nations Commission on the Limits of the Continental Shelf (CLCS), the Falklands/Malvinas lie within Argentina’s maritime borders. Thirty-four years after fighting to keep the islands, the British see this as a new threat to their continuing sovereignty over the islands and their surrounding waters. Learning from past mistakes, Argentina has introduced a new weapon in the struggle over the South Atlantic –not a machine of war, but a potentially more terrifying and effective tool: lawyers.

Argentina's claimed territory around the islands. UNCLCS acknowledged that the islands are within Argentina's EEZ in March 2016. Photo Credit: http://news.bbc.co.uk/2/hi/business/8520038.stm
Argentina’s claimed maritime territory in the South Atlantic.                                                                           Photo Credit: http://news.bbc.co.uk/2/hi/business/8520038.stm

Miscalculation

The struggle for sovereignty of the islands is nearly two centuries old. English Captain John Strong discovered the islands in 1690 and the first British settlement followed in 1766. For decades  British control of the islands waxed and waned during multiple international wars, no easy feat as the Falklands/Malvinas are located a daunting 7,939 miles from London and a mere 415 miles east of the Argentine city of Rio Gallegos. Finally in 1833, after several disputes with the fledgling Argentine Confederation, the British solidified control and have maintained their hold on the islands despite the expense of supporting the territory over such a vast distance. With only 2932 English residents, the Falklands/Malvinas are one of the most expensive foreign territories per capita in the world.

The pursuit of sovereignty over the Falklands/Malvinas was a costly decision for Argentina’s military dictatorship. In 1982, daily strikes by labor unions and anti-government supporters were a result of the loss of confidence in the leadership of Lt. General Leopoldo Galtieri who had assumed command of the junta after a 1976 coup that deposed President Isabel Perón. Unemployment rates were skyrocketing, and the inflation rate ballooned to more than 600 percent.  In an effort to distract the population from the collapsing economy and to restore national pride and support for the government, Galtieri ordered the invasion of the Falklands/Malvinas on 2 April 1982.

The initial days of fighting saw great success for the Argentine military. The first 4,000 soldiers arriving on the islands met minimal resistance and quickly took control, raising their flag over the captial city, Port Stanley. Their victory ignited strong nationalism, pride, and support for the military by ordinary Argentines that flooded the streets of every city in the country. The military government fostered this sentiment by publishing propaganda and positive reports promoting the success of their military. Triumphant claims —“Estamos Ganando” (We Are Winning) graced the covers of newspapers and magazines nationwide.

Across the Atlantic, the British government rapidly prepared a response force to take back the islands. Less than three weeks after the initial invasion, the UK launched a counterattack with more than 120 ships, 160 aircraft, and multiple Special Air Service (SAS) and commando units. The British quickly gained the initiative, and by 14 June 1982 the 3-month war was over. In the end, a little more than two months of combat resulted in the deaths of 648 Argentine, 255 British service members, and three civilians. Most of the Argentine casualties –and the fighting spirit of the Argentine Navy– lay at the bottom of the Atlantic with the ARA Belgrano, sunk by a British torpedo.  The islands have remained securely in Britain’s hands ever since.

Black Gold

A few months after the war, the international community legitimized the British presence in the South Atlantic. The 1982 UN Convention on the Law of Sea established the limits of the continental shelf and solidified British rights to the water and resources surrounding the Falklands/Malvinas. In 1998, after tentative discoveries 20 years earlier, the British began drilling the first offshore oil wells, discovering large reserves in the area with two fields, Sea Lion and Isobel Elaine, thought to hold half a billion barrels of recoverable oil each. These, and many other repositories around the islands, have the potential to make the tiny population there one of the richest communities per capita in the world.

The discovery of oil intensified debate on both sides of the Atlantic but the situation on the ground remains quite complex. Though a majority of Argentines believe that the Falklands/Malvinas belong to Argentina, multiple referenda reveal the actual residents of the islands want to remain under the British crown. Citing concerns about stability and security, the British maintain a substantial military presence that includes strike aircraft, warships, and more than 1,300 service members. The Argentine government sees the presence of such a large and active military force as a threat and has argued this point continuously and unsuccessfully to the international community.

UNCLCS decision of March 2016 includes the islands within Argentina's maritime borders. Photo Credit : http://en.mercopress.com/2016/06/03/delimitation-of-the-argentine-continental-shelf
UNCLCS decision of March 2016 includes the islands within Argentina’s maritime borders. Photo Credit : http://en.mercopress.com/2016/06/03/delimitation-of-the-argentine-continental-shelf

Changing the Game

In 2015, Argentina began to use a different approach that avoids direct confrontation with Britain. Filing a petition with the United Nations, the Argentine leadership decided to pursue international arbitration to prove the islands reside within the maritime territory of Argentina. In March 2016, after more than nine months of debate, the CLCS extended the maritime territory of Argentina by 35%. By doing so, the UN acknowledged Argentina’s claims that the Falklands/Malvinas lie within its maritime territory.

Victorious on the battlefield and secure on the basic question of governance of the islands, Britain now faces an unusual challenge to its supremacy in the South Atlantic –an internationally-arbitrated legal battle over resources. Historically committed to international cooperation and the rule of law, the UK would face significant challenges should it choose to ignore the UN, especially as doing so would set a precedent for other states looking to circumvent international arbitration.

Argentina may not yet have achieved the lofty goal of “Sovereignty” as displayed atop the watchtower at the Las Malvinas Museum, but it has found traction in pursuing a legal resolution to the territorial dispute. Now more than ever, the Falklands/Malvinas are an economically and strategically significant territory for the UK, and it is unlikely Britain will let the islands go easily. However, after nearly two centuries of struggle, the balance of power relationship in the South Atlantic may finally shift to favor Argentina thanks to a new tactic that neutralizes the otherwise superior power of the British. Perhaps the pen is truly mightier than the sword.

Jon NielsenCPT Jonathan Nielsen is a U.S. Army Infantry Officer with combat experience in multiple countries in the Middle East and extensive multinational training experience. He is currently attending the University of Belgrano in Buenos Aires as part of the George and Carol Olmsted Scholar Program. The views expressed in this article are those of the author and do not reflect the official policy or position of the U.S. Army, the Department of Defense,  or the Olmsted Foundation.

With or Without the EU: Brexit and Security

On 23 June 2016, the voters of the United Kingdom will decide the fate of their country’s relationship with the European Union. “Brexit” — a blend of “British” and “exit” mirrors Greece’s aborted “Grexit”, and is a term fraught with volatility and prone to demagoguery and abuse in public discourse.

One major issue is the net effect of European Union (EU) membership on the security situation in the United Kingdom. The question is not whether Britain is better off with or without the EU, but whether its security situation will change in any meaningful way. Despite conventional wisdom, Brexit will probably not have a significant impact on Britain’s national security at all, for better or worse.

Realistic Brexit Fears?

A host of personalities, politicians, and experts of all stripes have commented about Brexit’s consequences, both for the UK and the EU. Sir Richard Dearlove, former Director General of MI6, believes the impact would be minimal, and that Europe gets more from the UK than the UK receives from Europe. Sir Dearlove bases his position upon the demonstrated utility of the UK’s bilateral security relationships worldwide which eliminate dependence on EU institutions. On the other hand, the Director of Europol, Rob Wainwright, a former British law enforcement officer, claims Brexit would make it harder for the UK to protect its citizens from terrorism by adding, rather than removing barriers for cooperation. Unfortunately, declarations on both sides correspond more with domestic political interests and a desire to shape public opinion than with reality, leaving the British population confused about the real pros and cons of EU membership on their security.

Sensing this, Prime Minister David Cameron addressed the United Kingdom’s strength and security as a EU member state during a 9 May speech at the British Museum in London. He highlighted four reasons the UK should remain in the EU: to lead from a position of strength in Europe, to maintain a spirit of collaboration with European neighbors, to develop closer security cooperation between member states, and because he believes the EU amplifies Britain’s power by allowing it to influence other EU countries. This special position enables the UK to achieve its strategic goals by placing its interests among the top of EU priorities.

Though his points were important, Prime Minister Cameron probably exaggerated the benefits of EU membership in order to make his case. He presented his arguments with sensationalism, repeatedly suggesting Brexit would automatically weaken defenses against terrorist networks such as Daesh (the Islamic State of Iraq and the Levant). He claimed that some useful tools like the European Arrest Warrant, the Schengen Information System, and membership in Europol, would be unavailable should Britain leave. These statements certainly misled some to believe Brexit will prevent extradition from EU countries or prohibit British access to EU information and intelligence despite numerous examples of effective cooperation of this type with non-EU nations.

To Brexit or not to Brexit?
Britons struggle to decide where their country stands in relation to the rest of Europe. Photo Credit: Patrick Chappatte, International New York Times.

Cooperation Outside the EU

International cooperation in law enforcement and security is based on solid bilateral relations between states. International organizations augment this cooperation with capabilities that may be unavailable to some members. This occurs in both a regional context, via EU agencies like Europol or Frontex, but also globally, with Interpol or various United Nations agencies. These organizations provide mechanisms for diverse cooperation agreements ranging from operational ones that include the exchange of personal data, to technical or strategic agreements with third parties that provide benefits for “full members” of the organization.

These organizations do not limit these benefits just to their member nations. Europol, for example, has cooperation agreements with eighteen non-EU states including the United States of America, Switzerland, and Australia, among others. Most of these important partners have full access to available data of an operational or strategic nature. For example, the US Federal Bureau of Investigation (FBI) is a participant in the Europol Focal Point Travellers agreement, a sensitive program that collects and distributes intelligence from participants in order to facilitate the search for “foreign fighters”. Leaving the EU would not affect such programs nor weaken cooperation between British and European security organizations.

The Sky is Not Falling

All UK citizens, including Northern Irish and Commonwealth citizens over eighteen who are resident in the UK, and UK nationals living abroad but who have been on the electoral register in the UK in the past 15 years, will be eligible to vote in the referendum. These voters will determine the destiny of one of the strongest players in international security. Yet, when the referendum is held on 23 June, citizens of the UK should be aware that leaving the EU will not have the impact on their internal security that some of their leaders claim.

Though leaving the EU is arguably not helpful for Britain’s continued security against terrorism and organised crime, the UK’s strong bilateral relationships on security affairs will not be diminished and would continue to operate effectively. What is important for Britons, is that no matter how they vote later this month, their country’s strong relationships with its neighbors and other international organizations is the real source of Britain’s security and will continue regardless of the nature of its relationship with the EU.

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Victor Perez Sañudo is a Spanish Law Enforcement officer with more than two decades of professional experience in international cooperation working for the UN, NATO, EU and OSCE. Victor has been Project Manager in relevant EU projects for law enforcement agencies, like the European Explosive Ordnance Disposal Network (EEODN) and the EU Bomb Data System (EBDS) among others.