Connect with us
second brexit referendum second brexit referendum

Africa

The Current State of UK Politics: A Second Brexit Referendum?

 6 min read / 

The disappointing second quarter performance of the British economy has caused divisions among cabinet members and a revision of the position regarding a transitional period and EU exit strategy. Controversy, uncertainty, foreign criticism and plans for social unrest have additionally contributed to the current gloomy state of UK politics.

Brexit Causes ‘Notable Slowdown’

The British economy showed signs of a notable slowdown, as second quarter GDP increased by only 0.3%. Conclusive with the second quarter, the economy delivered its weakest six months of growth since 2012.

Last week, the Bank of England left monetary policy unchanged, holding interest rates at 0.25%, a decision aligned with markets’ and forecasters’ expectations. It also released its quarterly inflation report, with revised forecasts for economic growth and inflation. Growth rates are expected to drop from 1.9% to 1.7% in 2017 and from 1.7% to 1.6% in 2018, while inflation is expected to increase to 3% by October, before declining to 2.2% by 2020.

The unresolved policy riddle that remains at the BoE is the balancing of inflation, amid a weak pound caused by Brexit, and the slowdown of the economy, which impacts consumer spending and investment. The resulting uncertainty will have consequences on growth in the future, according to governor Mark Carney.

Soft Brexit

The negative consequences on the British economy have already resulted in divisions among cabinet members regarding a transitional period. The poor performance and assessment that the economy will remain “sluggish”, have created a stronger case for “soft Brexit” and have strengthened Chancellor Philip Hammond’s position that Britain does not need the economic shock of leaving the EU single market and customs union simultaneously.

Hammond’s transition deal, additionally supported by businesses and the BoE governor, has recently lead the government to initiate plans for publishing a proposal for a transitional customs agreement. If agreed, it will be published in the week of August 14, including a document regarding the Northern Ireland border issue.

The growing momentum for a smooth transition is supportive of John Kerr’s opinion, the creator of Article 50, who, earlier in July, stated that public opinion will shift when the economic situation worsens.

Foreign Pressure

Last Monday, the Irish Prime Minister Leo Varadkar stated that he hopes “Brexit does not happen”, as he thinks that staying in the single market and the customs union “would be the best outcome for Ireland and Northern Ireland and Britain”.

Earlier, the Maltese Prime Minister Joseph Muscat also expressed his thoughts that Brexit might not happen and that the mood in Britain has changed since the vote on EU membership. According to Muscat, who once called the Brexit vote “a disaster,” the referendum resulted in a situation with “only losers.”

“It would be good if a political leader in the U.K. stands up and is courageous enough to address this new situation. Someone who says: let’s put the Brexit end-deal to a popular vote”, according to him.

Second Brexit Referendum?

The new situation in the UK has led some scholars and former political leaders to address the issue of a second referendum.

Vernon Bogdanor, professor of government at King’s College in London and David Cameron’s former politics tutor, recently stated that a likely second Brexit referendum would be a solution to the deadlocked parliament, the possibility of an unfavourable deal and the division of both parties regarding Europe.

“Brexit, after all, raises fundamental, indeed existential, issues for the future of the country. That is why the final deal needs the consent not only of Parliament but of a sovereign people”.

Romano Prodi, the former head of the European Commission and Italian Prime Minister also stated that an increasing number of people were privately suggesting that a second referendum may be necessary. However, a second referendum would be almost impossible. Instead, a compromise on both sides would be required in order to avoid economic suicide.

In Britain, currently, only the Liberal Democrats are open to a second referendum on any deal that may result from the Brussels negotiations. Even though unrealistic, the possibility of a second referendum could lead to reopening of the question whether Britain can unilaterally revoke the Article 50 exit clause.

“Brexit Chaos” Was a Tactical Strategy for Time

The impressions after the first day of Brexit negotiations in Brussels were that the UK seemed disorganized, which caused a clash of opinions among EU officials with different levels of experience with the British. Some observed it as a potential trap, while others believed it was the result of serious division in the British political class.

According to some of the diplomats, the pretext of chaos in London was a tactical bluff for time, that would leave the EU feeling pressured to agree to a future trade deal rather than allow a disorderly withdrawal. Other EU officials thought the British strategy was an outreach to corporate executives in the EU, especially in countries that would be hard hit by Brexit. UK’s strategy was to win over friends with arguments that Brussels has not been focusing on securing a trade deal that would protect businesses in the future, due to its focus on winning the initial negotiations over Brexit.

No Deal

In relation to the negotiations, Nick Timothy, Prime Minister Theresa May’s former adviser, stated that the UK should be prepared to leave without a Brexit deal rather than agree to unfavourable terms. The PM has insisted that “no deal is better than a bad deal”, indicating the UK would leave the EU and rely on World Trade Organisation rules after Brexit if the Brussels offer is unacceptable.

Former BoE governor Lord King also warned that the UK needs a “backup” plan in case it fails to reach a trade deal with the EU. UK needs to be better prepared for a “no deal” Brexit to show Brussels there is a “credible” alternative should the negotiations fail.

“Autumn of Discontent”

The growing discontent with the situation in Britain has lead a group of anti-Brexit supporters, called the People’s March for Europe, to organise a pro-EU march in central London for September 9. The march will be one among the numerous mass protests during the forthcoming “Autumn of Discontent”, whose goal is to prioritize the possibility for remaining in the EU among political leaders.

Thousands of activists, including Star Trek actor Sir Patrick Stewart and former Labour spin-doctor Alastair Campbell, will march from Hyde Park Corner to Parliament Square, protesting against the Brexit vote.

Confusion and Chaos

The current political situation in the UKcan be best described as chaotic, controversial, disorganized and destructive for the economy and society. Unfortunately, the confusion and uncertainty among political leaders, economists, businessmen, investors and the general public, caused by Brexit, are most likely to persist and deepen in the second half of the year.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Africa

Zimbabwe’s Economy: Can It Restore Its Splendour?

 10 min read / 

Zimbabwe

These days, when people think of Zimbabwe, they think of this failed third-world state until a few days ago was run by a brutal dictator. Little do they know that this nation was, until the mid-1990’s, one of Africa’s better-performing economies.

Former Tanzanian Julius Nyerere, not long after Zimbabwean independence, is reported to have told Robert Mugabe that “You have inherited a jewel, keep it that way”. Needless to say, this advice was not kept. As the world has seen, this jewel was allowed to be scratched, dropped, then left to collect dust.

There are serious problems that require serious investment and economic reform to allow Zimbabwe to prosper. Infrastructure needs serious investment, with the Kariba Dam in danger of collapsing, the transport network likewise has been neglected with poorly paved roads and trains from the colonial era being brought back into service.

But the biggest problem, alongside corruption, has to be government interference with the economy as a whole, with centralised economic planning and state ownership proving to be a disaster. But while there is doom and gloom, there is hope.

The Case for Optimism

This jewel, as badly damaged as it is, is still a jewel. It just needs tender love and care. When it comes to mining, the nation is rich in raw resources, particularly gold, platinum, diamonds and coal.

The education system, one of Mugabe’s few positive acts, is one of the best in Africa. Agriculture is an area with a future, with history proving it can be one of the strongest economic sectors in the country. Furthermore, there is an opportunity to kickstart the tourism sector, with promising growth in recent years. It is worth identifying strengths to build on, and weaknesses to repair if Zimbabwe wants to recover.

Left to Rot

The Kariba Dam was once the showpiece of the white minority government, with the artificial lake behind it becoming a tourist and recreation attraction in its own right. However, this dam, constructed in the 1950s, has been neglected over the decades, so much so it has been likened to Mosul Dam in Iraq.

Although not at immediate danger just yet, due to drought and overuse culminating in a regional water crisis, it is feared as sudden flood, of which the Zambezi Valley region is known for, could spark a cascading tsunami. The BBC argues that, should the dam collapse and cause a tsunami, it would destroy the downstream Cahora Bossa Dam in Mozambique, which would have a serious impact on Southern Africa’s hydroelectric capacity as well as put up to 3.5 million lives at risk.

It is a similar story across the country. While not threatening to cause a regional catastrophe, Zimbabwe’s infrastructure all round is in a serious state of disrepair. The national road network has itself become a death trap. 21 people were killed when a truck carrying mourners collided with a tanker in October 2013.

In July 2014, a collision between a truck and a minibus killed 16. In June 2017, 43 were killed when a bus crashed into a tree. It may seem horrific, but when the conditions of the roads are examined, such accidents are waiting to happen. The state newspaper, The Herald, acknowledged that the lack of funding was of a serious concern in 2012.

It is a similar story when it comes to rail. Zimbabwe is lucky as it is situated in a choke point between South Africa and the rest of Eastern and Central Africa. However, little investment has been made, with only 3077km of rail tracks, of which all but 313km is electrified and all but 28km is dual track.

Whilst it is argued that this is sufficient as long as it is well maintained, this has not occurred, with the Railway Association of Enginemen referring to the rail network as a ‘death trap’. Diesel shortages have also seen the return of steam engines, primarily for safari excursions and shunting in the railyards of Bulawayo. The government-owned operator, National Rail Zimbabwe, was close to collapse in 2010, with salary cuts of 50% in 2016, displaying that the situation is still precarious.

The Problem

The root of this rail calamity, as is with much of Zimbabwe’s critical infrastructure, is government interference and bureaucracy. Now considering that the governing party, ZANU-PF, is a strong advocate of nationalisation, this is no surprise.

However, its application has proven to be disastrous. The Land Reform programme was such a debacle that even Mugabe himself admitted it was poorly orchestrated.

Indigenisation, the policy where 51% of a foreign business in Zimbabwe must be owned by a local partner, is said to be scaring away much needed foreign investment. Parastatals such as NRZ are said to be seriously mismanaged, causing friction with the workers, while haemorrhaging its budget.

All this begs the question, if, as the government line has been consistently, nationalisation has been implemented to redistribute wealth to ordinary Zimbabweans, why are they not receiving the benefits, instead dealing with failing infrastructure? The answer to that is clear – corruption, fed by mismanagement and patronage.

On the issue of opulence, for a president who was claimed by his supporters to be one of the worlds poorest, Mugabe lived a life of extravagance while in office. The Land Reform programme was abused by the ruling class – by 2010, The Guardian estimated that 40% of land seized from white farmers had been distributed among Mugabe and fellow cronies.

Considering its financial woes, NRZ has ordered a forensic audit to examine the extent of embezzlement. Corruption has become such a problem it is considered the norm, creating a two-tiered system. Its been argued that Zimbabwe loses $1 Billion annually from corrupt practices, though that figure could be higher.

Can Zimbabwe Rebuild?

It might be argued that Zimbabwe lacks a bright future, that it is stuck in an endless cycle. However, that would be ignorant of its many strengths. One of the reasons NRZ has been keen on using steam locomotives is the abundance of coal. There is reportedly estimated to be up to 26 billion tonnes of coal reserves.

Although this claim is contradicted by international organisations who argue it is only half-a-billion, it is still a significant amount for a small economy. With extraction per annum around the 3 million tonnes mark, the market is prime for a sustainable increase. Likewise, gold, diamonds and platinum are ripe for exploitation.

Considering the rise of the burgeoning Asian middle class, these are areas worth exploring however, there are several handicaps. With gold, there is a culture of small-scale mining.

Despite gold-mining being the third-biggest market, a lack of ability for these small miners to explore, as well as the amount of unused mine claims, hampers development. As for platinum, it is known the nation has the second largest reserves on earth, and the Marange Diamond fields are said to be one of the worlds largest.

Despite this opportunity, state-ownership has restricted the ability for Zimbabwe to encourage mining. The market is heavily politicised, with the Parastatal organisation the Zimbabwe Mining Development Commission unable to rehabilitate older mines due to the cost. Accusations of plundering by the ruling elite and the ever-present threat of nationalisation contribute to foreign investors’ fears.

Education-wise, the primary, secondary and tertiary systems are a source of pride for Zimbabweans. While the colonial-era private school system still educates the nation’s elite, the decision by Mugabe to invest in the education system has contributed to a well-educated populace, with a literacy rate of 87%, putting it among the top-20 bracket in all Africa.

Some concerns do linger, however. There has been a decline in standards in recent years, no doubt tied to the enduring financial crisis, to the point it is claimed that 51% of men have never had a formal education. And while the education system is by principle free and compulsory, tuition and other material fees are an obstacle for many.

However, by African standards, Zimbabwe’s progress is remarkable. While in the colonial era there were only two universities, today there are fifteen. But this creates its own challenges. Because of the high unemployment rate, there is a mass exodus of graduates across the Limpopo in search of better opportunities. Since 1996, students at
university have to pay tuition fees – around $500.

This may sound a pittance to western readers, but considering the unemployment rate and the fact that Zimbabwe’s average salary is $253 per month, this is a lot. For many Zimbabweans, even being well educated does not even come close to guaranteeing a future.

Other Sectors

It would be silly to conclude without mentioning the agricultural and tourism sectors. Tobacco is a cash crop, with the industry being the second largest in Africa.

Despite a drastic collapse resulting from land reforms, the industry recovered to achieve its third highest harvest in 2014. China is by far the largest market, with 54% of all exports headed to Chinese consumers.

However, this is just one bright spot. Maize has not recovered from land reforms, with an annual yield of 400,000 tonnes well short of the estimated 2.2 million needed to keep the nation’s stomachs full. As for tourism, this is one of the big earners. Blessed with sites such as Matopo National Park, Hwange reserve, Victoria Falls and Great Zimbabwe, this is a tourism mecca.

However, this industry naturally declined with the rest of the nation once the economy began to decline. Despite the industry boosting the economy by $890m in 2016, it needs improvement. Overpricing and the behaviour of the police are said to be major contributors toward scaring tourists away, combined with the general confidence, public perception and a fragile hospitality sector.

Overall, this is a country with endless opportunity. There are underutilised sectors which, if utilised to their fullest extent, can rebuild the nation. However, the story is the same. Corruption and government mismanagement are causing major headaches. The decision to ditch the Zimbabwean Dollar in favour of foreign currency stabilised the economy after hyperinflation, but the creation of ‘bond notes’ on par with the USD only just restarted the panic.

This sort of government interference, as is the case with almost every industry, is hampering Zimbabwe’s development. And while Zimbabwe is hardly ready for a laissez-faire economy which would likely increase the gulf between rich and poor, the government needs to be more receptive to free market concepts.

Foreign investment is needed; policies such as nationalisation and indigenisation do nothing but scare it away. As for corruption, cleaning up an ingrained practice is extremely difficult. It is a well-known fact that nations with the least corruption are the most successful, but it is easier said than done. It can be done – Singapore eradicated corruption after independence, emerging as a leading financial destination. But it requires a collective will, and the total removal of the corrupt.

Conclusion

As said earlier, Zimbabwe may be a battered, neglected and dust-collecting jewel, but it is still a jewel. The question, however, is whether this jewel will shine again.

Zimbabweans want a brighter future than the one they have endured for the past two decades. However, government policy, enacted on the premise it would benefit the masses, has only made life harder.

Furthermore, leaders making these decisions have engrossed themselves at everyone else’s expense. A bright future, whilst always within grasp, requires the focus and determination of all Zimbabweans not just to grasp, but to hold on and rebuild.

Keep reading |  10 min read

Africa

Oscar Pistorius’ Sentence Extended to 15 Years

 1 min read / 

Pistorius Sentence

The former South African athlete’s sentence has been increased to 15 years for the murder of girlfriend Reeva Steenkamp on Valentine’s Day 2013. The athlete has served a year and 7 months and has 13 years and 5 months remaining.

The South African appeals court ruled that High Court Judge Thokozile Masipa’s decision to reduced the sentence to 6 years, based on the athlete’s state of mind, was wrong. Two of Judge Masipa’s rulings during the trials of Oscar Pistorius has been overturned by the appeals court. While gaining fame during the trials, she has been the subject of significant criticism on this topic. 

Other famous sports figures charged with murdering their partners include former NFL player O.J. Simpson and boxer Rubin “Hurricane” Carter.

Pistorius's

Photo By Jim Thurston [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Keep reading |  1 min read

Africa

Zimbabwe: Life After Robert Mugabe

 7 min read / 

Robert Mugabe

It has finally happened. After 37 years, the regime of Robert Mugabe has come to an end. Amidst the pressure from the military in the aftermath of the coup, followed by the decision of ZANU-PF to cut ties with their former leader, it took the threat of impeachment and an inglorious exit for the nonagenarian to call it a day to save what is left of his tattered legacy.

In Harare and other major centres in Zimbabwe, there is euphoria. For the first time since the end of minority rule and true independence, Zimbabwe will have a new ruler. But amidst the joy come the following questions.

Will Zimbabwe Emerge as a Democratic Nation?

This is the million-dollar question. It should be mentioned that Zimbabwe, even under white-minority rule (despite what others might say) has never experienced a truly democratic system of government. In colonial times and the UDI period, the franchise was limited to whites and a few select blacks. Under the government, power – despite being split 80:20 between the blacks and whites respectively – was dominated by ZANU-PF, with the orchestration of Gukurahundi and the hounding out of Mugabe’s rival Joshua Nkomo, followed by the merger of ZANU-PF with Nkomo’s ZAPU, setting the stage for de-facto one-party rule. After 2000 and the formation of the MDC, Mugabe has resorted to every undemocratic act to manipulate the system in his favour. Democracy has often just been wallpapering over the cracks.

That’s not to say that this is an opportunity for change. The masses have come out in support for the removal of Mugabe, the allies that kept him in office for so long have deserted him, even his Chinese allies have reportedly said in private they have had enough. But this does not suggest democracy is inevitable.

First, both ZANU-PF and the opposition are in disarray. The rivalry between Emmerson Mnangagwa and Mugabe’s wife, Grace, has led to a bitter factional rivalry that has weakened the party. As for the opposition, with former Mugabe supporters such as Joice Mujuru ending up forced out, there lacks a unified direction. While Morgan Tsvangirai, the head of the MDC, is the clear favourite to challenge, his recent cancer treatment, as well as leadership style, makes his hold on power a lot weaker than in previous years.

Then there are the backstage factors. Naturally, when a country suffers sudden political turmoil, those with the means do what they can to salvage power, wealth and influence. Zimbabwe will most likely be the same. Since Zimbabwe has seen democracy used more as an excuse to legitimise Mugabe, people with these three means will be disinclined to see its introduction immediately, let they lose it all. Rather, a period of provisional governance, such as the one Reuters speculates will emerge, could emerge as a stepping stone to a stable democracy.

Zimbabwe’s Defence Force

Despite the euphoria, people are at the same time concerned about the defence force in power. Former Singaporean Prime Minister Lee Kuan Yew, on discussing repression, remarked “I am told it is like making love – it is always easier the second time”. The same can be said about military coups. It must be remembered that history has not been kind to nations where the military has seized power.

Often or not, the difference between nations which have never had a coup and those which have had many is, as Paul Nugent puts it when talking about Cote D’Ivoires first coup in 1999, the ‘military genie in the bottle’. Armies which have never led a coup often are apprehensive of the blowback, often preferring to sit back and watch. However, those that have often seize power multiple times. They gain experience in governing a nation and, despite oppressive means of governance, often find support for a return among some sectors of the masses when democracy fails to live up to expectations.

In Zimbabwe’s case, it is impossible to tell how this is going to pan out. If one took General Constantino Chiwenga at his word, this is just a neccessary transition of power to rebuild an ailing nation from ‘treasonous’ forces inside government. Early signs would support this argument, with the army more or less allowing all political and democratic procedures to run their course. But the whole idea of forcing regime change is not so cut and dry. Their motive, responding to the dismissal of Mnangagwa, contrasts with this theory.

Zimbabwe’s Economy

Whoever ends up in control has to sort out the disaster that has become the Zimbabwean economy. Famously dubbed the ‘breadbasket of Africa’ once upon a time, the nation has seen its fortunes tumble. It might as well be argued that a Zimbabwean optimist is one that thinks things cannot get any worse. Decades of kleptocracy, poor policy and ideological point scoring has depleted the treasury. Unemployment, though hard to measure, sits around the 60-95% mark, depending on who is telling the story. Furthermore, Hyperinflation forced the abandonment of the Zimbabwean dollar in favour of using foreign currency. Hyperinflation returned not long after the Zimbabwean government began using bond notes as a form of currency. These are serious issues where there is no easy fix.

However, if we assume that Mnangagwa is likely to assume power, there are some likely policy changes that will be of some benefit. First and foremost, unlike the teacher/career politician Mugabe, Mnangagwa is said to be Zimbabwe’s richest man. Having served as Mugabe’s spymaster in the 1980’s (for which his role in the Gukurahundi massacres means he is still reviled amongst the Matabele population), Mnangagwa has used every opportunity (much like Mujuru and other high ranking officials) to enrich himself, with speculation he even profited from Zimbabwe’s incursion into the Congo during the late 90’s.

Despite this dubiousness, Mnangagwa has shown he more than willing to work with persons Mugabe would consider ideological enemies. Mnangagwa has previously stated the need for a strong agricultural sector, something non-existent since the forced acquisition of white-owned farms begun in the early 2000s. Both he and Tsvangirai want the return of white farmers to boost the economy. Whether they will come back or, alternatively, cause friction among those who took ownership of the land in the aftermath of their expulsion is yet to be seen.However, more will need to be done.

Indigenisation policies orchestrated by Mugabe, whilst redistributing power to native Zimbabweans, has been a spectacular failure, with foreign investment drying up. Likewise, the nation’s penchant for state-ownership instead of private enterprise, particularly with the nations bountiful diamond mines, will be something that needs review. This may seem a simple fix, but it is a complicated issue, one that needs serious reform just to stem the tide of economic disaster.

Mugabe’s Legacy

It is safe to say whatever positives that have come from Robert Mugabe’s rule, be it education or health-wise, has been completely forgotten in the shadow of the misrule and repression that he openly endorsed. His role as a freedom fighter has brought admiration and affection for him in the past, but these days it is hard to reconcile that image with that of the tyrant whom many see as worse than their white oppressors. He will be remembered as one of Africa’s self-centred dictators, and the man who broke Zimbabwe’s heart.

Conclusion

Zimbabwe is in for a period of uncertainty. How long it lasts and how well the country recovers is yet to be seen. But right now, any prediction of how this transpires is just that. Zimbabweans may celebrate the removal of a tyrant, but there is an old saying – ‘meet the new boss, same as the old boss’. If the best-case scenario prevails, Zimbabwe may return to its mantle as the ‘breadbasket of Africa’. If it’s the worst-case scenario, people may well start reminiscing about the Mugabe years.

Keep reading |  7 min read

Trending