Even in the negotiation process, millions of Brits already felt the impact of Brexit and well realised the fact that the political economy of Brexit is not a one-time referendum ballot box fun. Sarcastically enough, very recently, tens of thousands of Brits who were mainly voted “leave” out on the streets of London demanding the repeat of the referendum, so that they will stop UK to leave the European Union.
It is evident that the negotiation of Brexit, the formal divorce of UK from the European Union is seriously challenged the government of Prime Minister Theresa May and her leadership ability. Last week, her Foreign Affairs Minister and one of the chief architect of Brexit, Boris Johnson and her Chief Brexit Negotiator David Davis resigned from their post in protest of her handling of the whole negotiation process of Brexit. To put salt on her wound, President Donald Trump of the United States openly mocked her for not accepting his “advise and act accordingly” in his interview during his official visit of UK last week.
Historical documents shows the fact that all “Gaul”, an ancient region of Europe, corresponding to modern France, Belgium, part of the Netherlands, Germany, and northern Italy, is divided into three parts is how Julius Caesar began the first book of his “Gallic Wars”. Brexit Britain, like Gaul, is also divided into three parts.
Professor John Burton of Leeds University stated that the House of Commons is also divided into three tribes – Tory loyalists who vote for anything Prime Minister Theresa May wants. Labour Loyalist who back Jeremy Corbyn’s line which is as close to Prime Minister May as makes no difference. And independent Tory and Labour Member of Parliament (MPs) ready to put national interest before party tribalism. They are the swing MPs who in early skirmishes in the House of Commons made clear there will not be a majority for a No Deal or Crash-out Brexit.
According to Professor John Burton, Tories will not vote with Corbyn to defeat Prime Minister May to profit Labour politically as was seen recently. However, if the Labour leadership recalibrates its Brexit line to speak for the majority in Britain that wants the softest of Brexits it can influence national policy. Meanwhile the contours of the Brexit triptych are becoming clearer.
On the political aspect of Brexit, UK will leave the EU Treaty on March 29, 2019. From then on, no more UK ministers, no more UK Member of European Parliament (MEPs), and no UK Commissioner take any part in deciding EU rules, laws and policies. The UK thus forfeits not just its voice and vote, but in some cases also a veto.
Michal Makocki, a Senior Associate Fellow at the EU Institute of Security Studies (EUISS) stated that after political Brexit has occurred, the House of Commons takes back control. One of its first acts might be to uphold the core commercial interests of Britain throughout the ages, namely to keep open trade access for anything produced in Britain. The Commons could agree, for example, to stay in the Customs Union on a five-year renewable basis.
Regarding the economic or commercial Brexit, the key question here is as follows: How deep and how fast does the UK want a rupture with just-in-time-deliveries, customs free exports of made in Britain Nissans or Airbus wings or TV shows, or an end to foreign direct investment firms based in London?
Michal Makocki argued that, that may very well involve rupturing direct, unfettered access to the giant European market of half a billion middle class consumers and every public contract open to tender from the UK. At this stage, few still take seriously the idea of coming up with a trade deal with President Trump’s protectionist America. Things look no better with India, another large potential market. India’s top trade demand is visa liberalization for 1.3 billion Indians, a show stopper for any Brexiteer.
According to Michal Makocki, nothing stops the International Trade Secretary Liam Fox who is a lifelong anti-European, turning his department into an export-promotion power-house, but reason ought to prevail. Rest assured that the task can be accomplished without breaking with the EU Single Market or Customs Union.
Once political Brexit is consummated, commercial Brexit will seem less and less necessary. To begin with, during the transition period into 2021 and the possible prolongation Prime Minister May has asked for into 2023, there will be endless talks about every sector of Britain’s commercial relationship with its neighbors. Problems like freedom of movement will need careful handling.
In the end, something like along the lines of the relationship that Norway enjoys with the EU will emerge, though it will be called something else, probably a deep and wide association agreement. It won’t be easy to get there. Just consider that both pro and anti-Brexit advocates use the term “vassal state” to describe a Britain that, like Norway or to some extent Switzerland, trades openly with Europe. But it will be done.
Professor William Welsh of Michigan University stated that it is certainly regrettable that, as it stands, no ministers, elected British politicians or officials will ever again attend any meeting where the nations of Europe decide the EU rule-book. However, Britain with its global reach, professional military and deep intelligence networks can be an active bilateral player. According to Professor William Welsh, solution to problems like Galileo or keeping the European Arrest Warrant can be found if they are taken off today’s hothouse Brexit agenda and left to be resolved in what will be a continuing relationship with the EU over the next period.
Like Caesar’s Gaul, Brexit is divided up into three parts. In this case yielding a political Out, a commercial In, a geo-political contact and bilateral partnerships. This is workable, but still second-best. Given that the former Brexit Minister David Davis says: “A democracy that cannot change its mind ceases to be a democracy,” one wonders whether the British people will not be accorded a chance to change their mind once the real-life results of the June 2016 plebiscite are ready for all to see.
Much will depend on the EU’s economic growth and political stability in the period 2019-2024 over which Britain has no control. Brexit is for today, but not necessarily forever.
The political economy of Brexit
RUSSOPHOBIA
The Russophobia doctrine, which is still promoted, decade after its inception, is becoming dangerous by the day. When the presidents of the two most nuclearized states of the world system try to ease tensions between their respective countries, one would think this longed-for move would receive a warm welcome by all and sundry. To the surprise of many good willing people across the globe, the general assessment of the Washington political establishment about the Helsinki Summit was quite disturbing, to say the least! Instead of celebrating the ‘breaking of the ice’, a good portion of the players in the deep state became furious and visibly lost their usual contrived balance. If this consternation were centered on the account of selected issues and their deliberations, it would have been somewhat understandable, but it wasn’t!
It seems what has distressed the Washington political establishment that is under the direct diktat of the deep state was the fact that these two leaders were able to meet and discuss issues, (Syria, etc.) without much interference from anyone, including aides. Poor president Trump was at his wits’ end trying to rectify his statement (misread double negative) given at the Helsinki press conference. It was pathetic to see the president of the most powerful country verbally maneuvering his way to calm entrenched interests who do not want détente with Russia. To those novices innocent in the ways of the deep state, the message that is coming from Washington should be quite clear and instructive, even if it is dangerous (treasonous, etc.) If all efforts towards global peace have to be screened and preapproved by the same entities engaged (directly or indirectly) in promoting conflicts and dominations the world over, humanity’s already fragile existence would become even more precarious. Here again is our definition of the deep state, which we believe is more comprehensively descriptive. Deep state = the military-intelligence-industrial-banking-media-complex!
Weapons of mass destruction (WMD) readily available both in Russia and USA are mindboggling. Sadly, the ultimate decision to kinetically employ these arsenals still resides within the jurisdiction of the broader politicos. We consider this to be one of the gravest, if not the gravest shortcoming of the prevailing world order. Those of us who appreciate the immense destructive power of these human concoctions (WMD) sincerely believe in the establishment of a number of soberly inclined global and local institutions whose exclusive preoccupation would be WMD! It is hoped such institutions (composed of apolitical people representing all walks of global life) and their mechanisms will evolve in due course. Unfortunately such desirable instrument of political governance is currently unavailable to the world at large. Experience dictates the likes of the IAEA an intergovernmental organization (International Atomic Energy Agency, a UN outfit based in Vienna) will not be sufficient, going forward! Given such a scenario, all those concerned about global peace should be vigilante in protecting humanity from the recurrent stupidity of establishment politicos who are, by and large, devoid of the capacity to fully comprehend the bigger notion of creation, while myopically obsessing parochial interests/politics! Contrary to the view of the deep state, what the politicos in DC are displaying, particularly in regards to global peace efforts, might not help them win coming elections. The whole idea of a potential peace accord (which might not even be secured) is being foreclosed, a priori, by the deep state. This can only spell trouble to the reigning hegemon!
Even at the level of unconscious (we can even say ignorant at times) politicking, the current behavior of a significant portion of the political establishment in Washington DC, is bound to have a boomerang effect, say come next election. The sheeple (human mass) might not be well versed about modernity’s myriad complex issues, but it still retains the faculty, unlike the politicos, to segregate the chaff from the wheat! To the sheeple, war is bad and should be avoided while peace is good and must be pursued relentlessly. Non-stop war mongering might have had its days, say during the heydays of the cold war, but today the global sheeple is much more aware of the machination of the deep state. In the US, unthinkable issues (only few years ago), like the advocacy of ‘permanent peace’, not temporal ‘anti-war’ movements, ‘social democracy’, incorporating universal healthcare, free college education, affordable housing, equity, etc. have started to surface on the political fronts. These concerns have increasingly become campaign platforms for many newcomers to the political game. Don’t be surprised if incumbents advocating for entrenched interests are dumped in favor of more progressive candidates, all across the USA, just like the Bronx election!
Blinded by greed, the masterminds of project ‘Russiagate’ have become incapable of distinguishing between war and peace! Even countries in the EU, to say nothing about other nations, are concerned about the collective sanity of staunch advocates within the deep state. We say, don’t sweat the little things; like, hacking, bugging, election rigging, regime changing, etc. The US is already ‘Numero Uno’ in all the above, and no flimsy project as ‘Russia’s election interference’ (even if it is proven right) can dislodge it from its top position. Rather, think about the huge scare of cold war that might swiftly turn hot between nuclear powers. See the article next column, on page 41 & 44.
“If we’re going to solve many of the problems facing our world, then we’re going to have to find ways to cooperate in pursuit of shared interests. The Summit with Russia was a great success, except with the real enemy of the people, the Fake News Media. I look forward to our second meeting so that we can start implementing some of the many things discussed, including stopping terrorism, security for Israel, nuclear proliferation, cyber attacks, trade, Ukraine, Middle East peace, North Korea and more. There are many answers, some easy and some hard, to these problems…but they can ALL be solved.” President Donald Trump. Good Day!
ETHIOPIA: BUY OR SELL?
“What economy?” Asked this lady manager last week, pompously.
‘Ethiopian resumed its flight to Asmara, pretty soon we’ll have our navy back in Assab”
Teddy Afro is down…ISSU is up!
“The country has a budget” (with a huge hole in it!)
“The Emirates dished out a billion… or two or three, in handouts and investment…”
“Washington DC – the next stop for Dr. Abye Ahmed.”
“Why worry? The country continues to be euphoric, non-stop, for the last three months…”
I suppose one should only start worrying when the party is over. Fingers will be pointing at Dr. Abye, Ethiopia’s most popular and dynamic prime minister in decades, if things go wrong, particularly if the economy fails.
Upon reflection, Dr. Abye’s popularity rests on two legs: His rhetoric about Ethiopian unity and his idealistic promise of love and care for all.
The first leg is still looking fresh, the second one… well, I’ll let you reflect on it!
Some people are beginning to sense uneasiness about the economy or the absence of direction of where the government is heading. Many remained skeptical about the privatization scheme sketched out so far, aimed at revitalizing the economy.
Is AA going to articulate something we haven’t heard before? Is he going to propose a set of actions that have not already been tried in the way of revitalizing the small and medium enterprises?
We don’t know.
What we know is that the way ahead is complicated …The country is bankrupt. And government is weakening. Money, power…and hopes for the future…remain stuck, somewhere!
So the question is should you buy Ethiopia or look for new pastures?
Anyway, dear readers, Ethiopia has always been assessed in terms of its potential… it has been this way for centuries! There will be soon more discussions (I hope) on its potential. Discussions on the kind of economic system or arrangement it needs. Small forums are already popping up here and there. Political parties including those on the opposing sides (those that still exist) will hopefully do more analysis on what is needed? Where to look for capital investments that can diversify, modernize and rejuvenate our economy, coupled with an overhaul of the policy apparatus commensurate with those goals.
Come to think of it there aren’t many choices in terms of economic systems to choose from these days.
For over two decades Ethiopia officially claimed to be a developmental state. A government basically insulated from democratic debate and contestation on issues of economic decision-making. Those in charge borrowed, taxed, stole and defrauded all in the name of developmental states using whatever legal or non-legal means to bankrupt the country.
As a result the EPRDF gave the ‘Development State’ notion a dreadful name. And yet the traditional key goal of developmental state is the building of markets. Typically developmental states use trade policy, public financing subsidies, tax incentives and other industrial policies to build up their economies, in particular their manufacturing sector.
The free market approach would have countries only exploit their current ‘comparative advantage’ as if it was naturally determined and static condition, whereas a developmental state would view comparative advantage as dynamic and changeable over time, and to be manipulated in a long term process of constant industrial upgrading.
Now there are many people arguing that the free market will fix it all and send us all into nirvana. These folks ignore the critical role states play, in not only making markets but also supporting technological development and innovation. These free market critics of state intervention have long claimed that the private sector can do it all by itself – if the state would just get out of the way. They want to ignore that a satisfactory market economy capable of maintaining itself does not arise from our energetically doing nothing. They don’t want to acknowledge today’s economy is an artistic construct, requiring the existence of strong state authority.
Yes, dear readers, the state has unique coordination and convening powers and ability to pool risk, create markets and provide public goods that the private sector cannot undertake. In fact the debate over the role of the state in development is largely settled. As empirical analyses indicate adequately designed economic and political institutions have positive effects on growth and wealth.
Many also believe the dispute about capitalism vs. socialism have come to an end, the current discussion is more about which kind of market economy ensures a positive economic and social development in a country. The question in fact is how states can best carry out these functions or rather how states can establish humane and workable economic order.
Ethiopia should therefore explore for an economic arrangement that would produce beneficial results for all. Our underlying philosophy should be based on building a competitive economy that (i) guarantees property rights, (ii) ensures lowest price volatility (low inflation – to coordinate economic activity efficiently), (iii) embraces open access to domestic and international markets, (iv) ensures the consistency and stability of economic policy, and ( v) makes sure that not only consensus is realized by all people, but that there will be mutual benefits from the implementation of institutions.
No, we should not seek to centrally plan the economy, or to let unrestricted free market go awry, but to put in place a socially responsible political economy that in contrast to neoliberal ideas of free markets protects the individual and its environment from the sort of homogenization and strife that markets bring about.
Remember there is no rocket science, magical secret, or something fishy in, say, South Korea’s development miracle and economic and political freedom some five decades back. It is the outcome of an economic management system that has been put in place in tune with vision of the political leadership to let everybody cherish the taste of sustainable progress.
There is no reason we cannot repeat that feast today!
Ethio telecom gets new boss
After serving for the last five years, Andualem Admassie (PhD), CEO of Ethio Telecom, has been replaced by Frehiwot Tamiru, who was a former employee and current board member of the company.
Besides Andualem over 40 individuals who were working in different positions of the company were relived on Wednesday.
Andualem is now assigned as Director of the Higher Education Relevance and Quality Agency.
Frehiwot previously worked in the former Ethiopian Telecommunication Corporation as deputy CEO for Internal Support Service, and then left to set up her company Doxa IT Technology Plc. Recently she was appointed by the new Prime Minister Abiy Ahmed (PhD) as board member of Ethio telecom.
Frehiwot told Capital that she will announce her priorities when she assumes the position next week. Frehiwot has an MA from Open University.
According to the official website of DOXA IT Technology PLC, it is a company of excellence and solution oriented, established to provide IT services and solutions.
Andualem is a graduate of PhD in Business Administration from Bulacan State University.
He also graduated with M.A. in Education Leadership and Management, B.Sc. in Business Education, Diploma in Accounting, Diploma in Project Management and Certificate in Mathematics.
According to his LinkeIn profile he stated that these programs have immensely helped him to build his competencies in many fields.
In a related development Habtamu Tegegn (Eng), director general of the Addis Ababa City Roads Authority, has been appointed as director general of the Ethiopian Roads Authority (ERA), replacing Araya Girmay. Araya became State Minister of the Ministry of Transportation.
