LAST Thursday Britons narrowly voted in a historic referendum to withdraw from the 27-member European Union (EU) bloc, rejecting outgoing Prime Minister David Cameron’s “Project Fear” to stay in.
Zimbabwe Independent Comment
The seismic decision — which triggered tremors around the world — sent global markets into turmoil and sparked off chaos in British politics as well as across the channel in mainland Europe. Across the pacific — in the Unites States — the Brexit hit Wall Street with anxiety. Markets from New York, London and Frankfurt to Shanghai were shaken by the Brexit shock and awe outcome. The British pound sterling was pounded to a 31-year low against the US dollar as fears gripped the financial markets. The initial drops in the pound and global stock markets were severe, but not cataclysmic.
It wasn’t a bloodbath yet uncertainty abounds. So expect a global chilling effect on investment. US President Barack Obama warned Brexit would “freeze the possibilities of investment in Great Britain or in Europe as a whole”.
Fitch downgraded Britain’s credit rating from AA+ to AA as Brexit would have “a negative impact on the UK economy, public finances and political continuity”. The rating agency warned Britain faces an “abrupt slowdown in short-term GDP growth”, as businesses defer investment due to uncertainty.
The British political landscape was also in upheaval. Both the Conservative and Labour parties were left embroiled in leadership battles following the referendum, intensifying uncertainty.
The Tories had to contend with Cameron’s resignation, while Labour was hit by dismissals and resignations. Labour leader Jeremy Corbyn, who together with Cameron campaigned to remain in the EU, soon became embattled, with an overwhelming majority of MPs in his party voting for him to go. He is however defiant and is still hanging in there amid growing calls for him to do the honourable thing like Cameron — resign. Boris Johnson, who spearheaded Brexit and was considered the frontrunner to replace Cameron, delivered a bombshell yesterday when he rejected the job.
The flamboyant former London mayor’s surprise decision further fuelled chaos in Westminster.
In Edinburgh, demands for another independence referendum resurfaced as Nicola Sturgeon, First Minister of Scotland and the leader of the Scottish National Party, insisted the Scots would not be dragged out of the EU against their will. Yet in Brussels, where Ukip leader Nigel Farage, a Brexit populist, clashed with EU bigwigs, some continental leaders vowed to block Scottish independence. Spanish Prime Minister Mariano Rajoy said he was “extremely against” Scottish independence and EU membership as he fears a precedent which might lead to Catalonia self-rule and secession by other regions back home.
In Africa, the UK’s biggest trading partners, Nigeria, South Africa and Kenya monitored the storm engulfing the British Isles. So was Zimbabwe and other countries. Geopolitically, Brexit created shifts of enormous proportions worlwide. So what’s the biggest lesson for Zimbabwe? It is that political uncertainty and instability, now entrenched here, scares away investors and bleed the economy. Capital is a coward. It flees from poor leadership, bad policies, corruption and uncertainty. Our leaders must learn something from Brexit and its fallout.