Voters need unbiased analysis of Brexit

Murari Sharma

The recent accidental leak of the information that the Bank of England is preparing for the consequences of Britain’s potential exit from the European Union (Brexit) — following the referendum on the issue in 2017, as promised by the newly reappointed Prime Minister David Cameron before the May 7 general elections — has sent ripples through the British establishment. As the pro-stay and pro-exit sides passionately peddle their arguments, ordinary voters are confused about how and to what extent Brexit will affect the British economy and Britain’s place in the world.

Cameron’s Conservative Party has always been in a constant tug of war between the anti-EU and pro-EU factions. The anti-EU faction — which includes the Eurosceptic Tories, including the 1922 committee in the parliament — wants Britain to pull out of the EU so it can reclaim the sovereignty lost to Brussels and to save the more than 11.3 billion pounds (2013) in net annual contribution. Cameron promised that he would renegotiate the treaties with other members and hold the in-out referendum partly to placate his pro-exit party colleagues and partly to prevent the erosion of traditionally Tory votes to the rising anti-EU and anti-immigration UK Independent Party.

Now that Cameron has won a simple majority in the parliament, he is under obligation to deliver. There is even demand from some quarters to advance the vote to 2016 to reduce the time of uncertainty created by the referendum, which has motivated investors to reach their investment decisions.

Uncertainty is certainly there. The Labor Party and the Liberal Democratic Party remain staunchly pro-EU. In a mirror effect, the business community is also divided. According to a survey by the British Chambers of Commerce, 57 percent business people support Britain remaining within the EU and 28 percent leaving it if London can sign a free trade deal with the EU; otherwise, they think, leaving the EU would be a net loss for Britain. Think tanks and political pundits in the media have been singing their own biased tunes.

While investors will hold back their decision until this uncertainty is cleared, ordinary voters are understandably confused. Though there is still time to generate and disseminate unbiased information on the potential impact of Brexit, the example of the Scottish referendum last year does not give much room for optimism. As we recall, in the run up to the Scottish referendum, the pro-union and pro-independence sides churned out their own biased songs, even though the voters deserved dispassionate analyses.

Although it is impossible to objectively assess the full impact of Brexit until it happens, if it does, there is some reasonably impartial analysis out there already about the potential impact of Brexit. However, a high-pitched and sentimental political propaganda had drowned that information. Such analysis is not receiving enough time in the media and enough attention in public discourse. In an effort to make some sense of this passionate political discourse, here is what I have understood so far.

Brexit will affect all aspects of British life, but it will be felt more acutely in immigration, trade and investment, and Britain’s place in the world. On immigration, it will free Britain from the EU rules on freedom of movement and national treatment across members of the union, allowing it to reclaim its sovereignty to control its borders. It can decide who comes into the country and who can claim benefits here. However, EU members will do the same with respect to Britons. It would be a two-way street.

There will be no significant savings for Britain in its welfare bill. According to government estimates, 2.34 million EU nationals live in Britain and 1.8 million Britons in other EU countries. Nearly 65,000 EU nationals claim benefits in the United Kingdom whereas 30,000 Britons claim the same in other EU countries. Yet more Britons claim benefits at least in nine EU countries than their nationals in Britain do. Therefore, the savings will be insignificant.

However, there will be hassles in the trade and investment area. The effect of Brexit of trade and investment would be negative in the immediate future. The economists at the Centre for Economic Performance has calculated that the UK could “suffer income falls of between 6.3% to 9.5% of GDP, similar to the loss resulting from the global financial crisis of 2008-09,” in its pessimistic scenario and if a free trade agreement (FTA) is signed with the EU, “losses would be 2.2% of GDP.” That indeed is a major loss.

John Springford and Philip Whyte of the Center for European Reform say, “. . .the City would not collapse in the event of an EU exit. . .” But some activity would be lost if Britain left the EU; and the costs of an EU exit would outweigh the (largely illusionary) benefit of sovereignty.”

The Center for European Reform, The economic consequences of leaving the EU (2014) concludes, “Eurosceptics are wrong to say that the EU offers little market access for a good deal of red tape, or that it constrains Britain’s trade with fast growing economies outside Europe. . . If it leaves the EU, the UK will have to negotiate terms. Britain will face an invidious choice: access to the single market, but less influence on the rules that govern it; or freedom from the rules, but loss of access to the single market.”

Indeed, it will take time for Britain to sign free trade agreements with 25 EU countries if the voters decide to pull out of the economic group. Besides, it will lose the ability to influence EU decisions in its favor from inside. The sectoral impact on the economy will vary. For instance, the financial services and automotive industry will suffer loss — banks, hedge funds and automobile firms will seek to relocate to the continent over time to reap the benefit of the borderless continental market.

Finally, while the UK will remain a medium-sized power in the world as long as it continues to invest in its military at the current levels, it will not be able to project its strength regionally or globally without coat-tailing the United States or France and Germany. London will lose its strategic value for Washington, which will rather be with the grouping of 27 EU countries than with Britain if they differ in their policy or priority. National interest often outweighs cultural and linguistic links in international relations.

One thing is clear. Whoever is arguing one way or the other are making just educated guesses. No EU has left the group so far for a reliable frame of reference to ascertain the comprehensive and factual impact. Switzerland and Norway are woefully imperfect proxies to draw any conclusion from, because they have never joined the EU. They are dating for mutual company and benefits, while Britain will be divorcing after marriage. There is a humongous difference between the two.

Therefore, it is wise for the Bank of England to chalk out a comprehensive plan based on unbiased analyses to deal with the consequences Brexit. I am sure BOE will share its findings when the plan is completed, which should be well ahead of the referendum, so that the voters can make up their mind before they step into the voting booth.


Murari Sharma: Quakes and leadership

As the government has failed to live up to the challenges generated by two major earthquakes and hundreds of aftershocks within days, which have killed nearly 10,000 people and destroyed thousands of homes, the quality of national leadership has come to sharp public focus in Nepal. All institutions are weak in the country, but the political class, strongest in power, is the weakest in performance. Why?

It will be instructive to draw some lessons from the political quake Britain have had recently.

On May 7, British politics suffered a major quake. The British people gave a simple majority to Prime Minister David Cameron’s Conservative Party in the general election, which was predicted to be dead heat resulting in a hung parliament. One day later, the leaders of the Labor Party and the Lib-Dem Party resigned. It was a brutal public verdict and a swift response from the losing parties.

No excuse, no maneuvering, no shifting the buck.

The cardinal rule is — you come, try, succeed and continue or you come, try, fail and disappear. David Cameron came, endeavored, succeeded and continued. For the Labor leader Ed Miliband and the Lib-Dem leader Nick Clegg, it was “come, try, fail and disappear.” Sure, there have been some exceptions in British politics, but they are rare.

Even when you succeed, occasionally you may be forced out and banished into oblivion. Prime Minister Margret Thatcher resigned due to a rebellion in her ruling party. Once out of 10 Downing Street, she disappeared from politics and dementia did the rest. Prime Minister Tony Blair cleared the deck for deputy, Gordon Brown, and vanished from UK politics. Brown was nowhere when his party came second in the polls.

In addition, as policy differences across parties narrow, personality and debating skills have become important elements in politics. Maybe, there was a time when policy mattered more than anything else. Not anymore. Now that all mainstream parties have only marginal differences in their policies, personality and oratory play greater role.

Every Wednesday, at the Prime Minister’s Questions hour, in which the prime minister and opposition leader argue and debate different matters in the parliament, much of it unscripted, puts in display the two leaders’ persona and debating skills. Since the 2010 elections, the US style television debates among party leaders before the vote have also been introduced. Mostly uncommitted voters make up their mind based on who performs better in the PMQs and television debates. Tony Blair and David Cameron have proved that superb oratory, youthful vibrancy, handsome persona win election.

All these elements keep UK politics youthful, vibrant, creative and innovative. They create room for new blood and talents to emerge in the political parties and for a new crop of leaders to rise and lead in the country.

Contrast that to Nepal. Very few of our prime ministers since 1990 would have been premiers of Great Britain.

Start with Girija Koirala. Under the first criterion — come, try, succeed and continue — Koirala could have become prime minister the first time; though he did not lead his party, his party had emerged as the largest and his party president had lost the election. However, that would have been the end of his premiership ambition. The second criterion — ability to debate and command of issues—would have disqualified Koirala, who could hardly speak a correct full sentence.

Manmohan Adhikari would have held the exalted post under the first criterion — he was the putative leader of his party and his party had won the largest number of seats in the parliament — but probably not under the second. He too had difficulty debating, though not as much as Koirala.

Surya Bahadur Thapa and Lokendra Bahadur Chand would have failed in both criteria. Their party was not the largest in the parliament; and they were not excellent debaters.

Sher Bahadur Deuba would have failed to become premier as well. He was not main leader of his party, when he was given the high post. And he does not have the capacity to debate issues, for he was born with a speech defect.

What about Krishna Prasad Bhattarai? When he was president of his party during the first general election, he lost his own seat that disqualified him. He was not triumphant in the second general election, either. In the third general election, Girija Koirala, not Bhattarai, was party president. In addition, Bhattarai, though better than Koirala, was not an effective speaker.

Pushpa Kamal Dahal would have been prime minister. He was leader of his party, his party had secured the largest number of seats in the constituent assembly, and he is one of the best orators.

Madhav Nepal would have no chance at all. When he became prime minister, he was defeated in the general election and he was not leader of his party, even though he is an accomplished speaker.

Jhala Nath Khanal would have been in the same boat. Though he was leader of his party, his party was only the third largest in the constituent assembly. Though he is also a good debater, as the head of the third party, he would have found little chance to display his debating skills in the parliament.

Baburam Bhattarai too would not have been prime minister in the UK. Although he is a good debater, he was not leader of his political party when he became one. I do not need to even mention Khil Raj Regmi.

Sushil Koirala would certainly not have been British premier. Though he was his party’s president after Girija Koirala’s death, he is in precarious health and he can hardly speak. People hardly understand what he says.

That brings me to the issue of managing the aftermath of the massive earthquakes and devastation left by them in their wake in Nepal. Figuratively speaking, our leaders are like the date expired medicines — impotent to cure but harmful. They are like the castrated oxen that occupy the cows in estrus but cannot impregnate them.

Let me be clear — I have nothing against these leaders personally. I like most of them, who are nice individuals and sensible human beings. But that does not give them creativity, physical strength, verbal finesse, or managerial capacity they need to drive the country forward to a lofty destination.

You may say, age and health do not matter for politicians. They do. Though funny, Northcote Parkinson sums up it well: “Wanted- Prime Minister . . . Hours of work: 4 A.M. to 11.59 P.M. Candidates must be prepared to fight . . . will die for their country . . . will have to pass an examination in parliamentary procedure and will be liquidated should they fail to obtain 95% marks . . . will also be liquidated if they fail to gain 75% votes in a popularity poll. . .”

How can you expect Sushil Koirala and KP Oli, who are sick, to work 20 hours a day? How can Pushpa Kamal Dahal and Baburam Bhattarai, who have blood in their hands, suddenly become angels? The mass suffering caused by the massive earthquake could be a revolution for them by another name or means against democracy.

So folks, before we blame our leaders for their incompetence, lack of drive or lack of empathy, let us blame ourselves for electing such people. If they have changed colors after the election, let us hold them to account in the coming polls. Meanwhile, let us join our forces to compel the government to respond to our imperatives.

Murari Sharma: How to prevent losses in another massive earthquake in Nepal

A 7.9 Richter scale earthquake hammered Nepal last Saturday. The number of the dead has crossed 7,000 and still counting. It is expected to go over 10,000 deaths and nearly one-fourth of the Nepali population has been affected. It could have been worse if the quake had hit at night when people were sleeping. Invaluable cultural heritage and billions of rupees worth of private property has also been lost.

Nepal, located in a high-earthquake zone, cannot prevent tremors but it can reduce death and destruction when another tremor pummels it.

The death toll would not have been this big if necessary precautions had been taken to protect people and property before this seismic convulsion. Geologists, construction engineers, and disaster mitigation professionals have known for decades that Nepal is located on the fault line where the South Asian tectonic plate collides with the Eurasian plate. It was not a matter of if, but when, a major earthquake would shatter Nepali lives.

I had learned about this possibility 25 years ago when I headed the division of the Ministry of Home that deals with disaster preparedness, rescue and recovery. At that time, the national disaster committee, chaired by the home minister, had taken decisions to spread disaster education widely to the grassroots and to develop and implement construction codes and standards to mitigate the impact of disasters.

Unfortunately, nothing much seems to have been done about it over the years. We tend to think about disaster preventing and mitigating measures shortly after a disaster unfolds a horrible tragedy and makes us wiser. But we soon forget about the calamity, become complacent and move on, without doing anything to protect ourselves in the future.

The wanton death of more than 10,000 people in this earthquake — nearly as many as were killed during the decade-long Maoist insurgency — should unequivocally inform us that the complacency extracts an extraordinary price from us. We ought to realize that Nepal is in league with Japan and the US state of California in earthquake risks and learn from the measures to mitigate their perilous impact on people and physical infrastructure.

But before we begin to focus our energy on the future preparedness, we ought to deal with the crisis in hand efficiently, effectively and, of course, equitably. But that seems not happening.

The victims are crying for rescue, recovery, food, medicine and shelter. However, political parties have locked their invidious horns to cash in on the disaster. Besides, the government of Nepal (GON) and some of its national and international partners are at loggerheads as well. The GON has asked non-governmental organizations (NGOs) to distribute relief materials in coordination with its mechanism and to channel their relief money through the Prime Minister’s Relief Fund or through an existing outfit, if they were registered after 25 April 2015. NGOs have slammed the government for this provision.

While political parties jockeying for advantage is repulsive, both the GON and NGOs are intriguingly partly right and partly are wrong. For the government, the victims in Barbak, Kathmandu, and Charikot are equal and they should receive equitable support from the state and the international community. Such equitable treatment becomes possible only if assistance is channeled through or coordinated by a single source.

The government is also eager to prevent vested interest groups from exploiting the people’s vulnerabilities at this critical time to advance their parochial goals. There have been reports that some international and national NGOs have been pushing their brand of religion together with their assistance. That is something the government should not allow to happen.

The critics of the government are right that the single door provision slows down relief distribution and puts the victims in the harm’s way further. The provision creates an avoidable bureaucratic delay and discourages the good Samaritans from getting involved spontaneously. Among the critics, some are gold-hearted citizens and organizations. Others are the vested interest groups who have their own narrow objective to promote leveraged by relief measures.

Can you meet the expectations of both sides? Largely you can. The government should not ask everyone to deposit their monetary contribution to the PMRF and relief materials to public agencies. That is going a little too far. It should rather insist that other agencies coordinate the distribution of money and materials with it, so it can avoid the same victims receiving relief from multiple sources.

Similarly, NGOs should not refuse to coordinate their relief efforts with public agencies for the sake of equity and justice as well.  The reason is that, driven to do it quickly, NGOs often limit their operations in relatively accessible area. Consequently, several NGOs may provide their assistance in a few accessible areas and a few victims, while those who live in remote and inaccessible areas and are needier might have none.

This is not time for either inter-party or government-NGO rivalry. Although time is running out, there is still hope for many missing victims to be rescued alive. Recovery of the dead bodies quickly is also essential for the closure of the case. The surviving victims need to be protected from hunger, disease and vagaries of nature.

It appears that there are enough resources around by now, leaving the challenge of their judicious distribution among the victims. The Nepalis themselves have raised millions of rupees and collected tons of relief materials. The international community has generously contributed money, personnel, means of transportation and goods — foods, tents, medicines, etc. What we now need is reaching the affected areas and distributing the basic things that people need to survive until they can grow their own food and build their own houses.

Once the rescue and recovery phases are over, Nepal ought to focus on rehabilitation and disaster preparedness, which has been left neglected for too long. To be sure, some work has been done in Nepal in this area over the years. But this earthquake proved that considerably more must be done in the future. We can learn from Japan and California, which are located in high earthquake areas.

The latter has developed a useful plan — California Earthquake Loss Reduction Plan 2007-2011 — which can be found at:

The California plan has had interrelated 11 elements and 44 strategies. Safe construction standards, research into safe and cost-effective construction, public education and information, making the existing structures more earthquake-resilient, improved land use planning, etc. are the key elements of this plan. These measures should be adapted and improved to fit our requirements.

While Nepal is subject to frequent earthquakes, this is the second major trembler in the last 100 years. In 1934, an 8.3 Richter earthquake had killed more than 8,000 people Kathmandu. Even though that casualty figure looks smaller than this time, it was much bigger proportionately, given that only a small number of people lived in the Nepali capital in those days.

Next time, it could be worst. It will be foolish to repeat the same mistake again and again. We should be better prepared for the next major earthquake before the two plates collide again and destroy invaluable lives and valuable properties.