By Yu Xiang, visiting scholar at Harvard University, director of the Economics Office at US Research Department under the China Institute of Contemporary International Relations
The United Kingdom held a referendum on June 23 that resulted in 52 percent of voters deciding to leave the European Union. The UK’s withdrawal offers several revelations, such as to maintain its stability, the supra-national actor should enforce limits on the number of member democracies to join in. The EU is a democratic experiment on the largest-scale after the Second World War, where several nation states had agreed to sacrifice parts of their sovereignty. Having more member states makes an international organization more difficult to operate.
Should we really expect 28 sovereign states to stay on the same page? And now with Brexit, can 27 member states stay united for much longer?
Additionally, traditional methods of opinion poll should be changed. Before the referendum, many polls released had shown Remain, slightly ahead, demonstrating that people were not satisfied with the EU, but wanted to stay in.
A possible reason to explain the discrepancy between the polls and actual results may be that due to the sensitivity of the referendum as Leave voters sought to hide their true intentions with pollsters.
The inaccurate poll results were misleading, since Remain campaigners had been less vigilant. Jeremy Corbyn, leader of the opposition party, was blamed by Labor Party voters for not campaigning hard enough.
Hence, better-designed questionnaires with more scientific methods deserve greater attention, otherwise polls can be devalued.
Accordingly, common people’s feelings have begun to hold weighty influence over elitism. The referendum has displayed how voters are turning against the so-called refined plans of political and economic elites.
Before the vote, media opinion, financial organizations and lottery corporations had all claimed that Brexit would be disastrous. UK chancellor George Osborne said Brexit would cause a 3400 pounds loss for each British family in a short time, followed by a tougher medium and long-term negative outlook.
Mark Carney, Governor of the Bank of England (Britain’s central bank), used to keep a low-profile on public policies, but stood out against Brexit.
The British from the lower social ladders had demonstrated a stronger inclination towards Brexit than was expected due to social problems including immigration, refugees, and terrorist attacks. When there’s a decision between sense and sensibility, people usually choose sensibility: wanting to leave the EU regardless of costs.
The interference of international community has had limited influence over Western developed countries. Before the referendum, the Remain camp had garnered much support from important people and organizations in the international community. United States President Barack Obama called on the British to stay in the EU, during his visit to the UK in April. He said the UK would “wait in line” to negotiate business pacts with the US if it left the EU.
German Chancellor Merkel and French President Hollande had endorsed the UK to stay in the EU. Prominent business circles had expressed grave concerns over Brexit.
The European entrepreneurship roundtable gathered its members to write an open letter and publish it on a German periodical, asking the UK to stay in the EU.
Financier George Soros warned that once the UK left, the pound-to-dollar exchange rate would tumble, since the Bank of England had very limited intervention means to deal with financial market fluctuations. “Brexit will only make speculators zillions, while the British people becoming poorer and poorer.”
Yet, it seems external pressure could not get its way. The Brexit referendum may push the currency value of the pound back to rational level. Judging from current British economic development, the pound has become one of the currencies with the highest value expectations in the world.
On June 20, Soros said in an article posted on The Guardian that if Britain left the EU the pound would drop by 15 to even 20 percent, from the contemporary 1.46 to somewhere below 1.15. Constant high expectations on the pound’s value may not be good for the British economy.
In 2015, the International Monetary Fund said the currency value of the pound was overestimated by 5 to 15 percent. After the referendum, the pound fell, serving as a coercive adjustment. And in a short time of overselling, the pound is sure to return to a rational level.
Western countries may follow the UK to use a referendum to resolve thorny issues. The ruling party may take more issues for a referendum to win over voters when popular dissatisfaction occurs.
In 2012, the contemporary UK Prime Minister David Cameron signed the Edinburgh Agreement with Salmond, chief minister of the Scottish local government, leaving the tough Scotland Independence Issue to public voting.
Yet, Cameron got lucky since the Scottish voted to stay in the commonwealth. This time, he wanted to gamble again on the EU issue, but failed. It is likely that other European countries will hold a referendum on leaving or staying in the EU.
Meanwhile in an aging society, opinions of senior voters should be highly-attended to. During other referendums, campaigners had attached great importance to young voters, using new methods including social media to lobby for their support.
Only 27 percent of voters between 18 to 24 support Brexit, while 57 percent of people between 55 to 65 and 60 percent of voters above 65 support Leave.Senior voters said they have lived during the days when Britain was forced to fight wars so they have the stronger feelings for wanting to be independent. Their stance indeed had decided the referendum results.
( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )
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