Marcell Sihombing, ANT
The UK has officially voted to leave the European Union after 43 years as an integral part of the Eurozone. Britain’s pro-Leave supporters have won the so-called Brexit (British Exit) referendum - a vote in which the vast majority of the voting age population participated in to determine whether the UK should either leave or remain within the European Union (EU). In the event, the Leave campaign triumphed over the Remain campaign by 52% to 48% of the popular vote.
According to Xin Hua London, 71% of the British electorate turned out to vote in the referendum, with more than 17 million people voting for the UK to relinquish its membership of the EU. Meanwhile, 16 million people voted for the UK to remain an EU member.
Commenting on this issue, Vice-President Jusuf Kalla expressed his belief that the triumph of the pro-Brexit voters was founded upon their longing for a return to the triumphs of the country's past.
“Historically speaking, I think England is a majestic country which used to reign over many territories across the globe, however the country does not feel so independent as a part of the EU,” asserted Vice-President Jusuf Kalla from the Vice-President’s Auditorium at the Vice-President’s Jakarta Office on Friday, 24 June 2016.
Vice-President Kalla stated that he understood why so many British had become pro-Brexit during this referendum campaign and noted that they had declared 24 June, 2016 as the UK’s “Independence Day”. However, the Vice-President also noted that the Brexit vote was likely to have a number of negative consequences on both the UK and the EU’s economy and trade relations.
“Leaving might represent a display of nationalism [for Britain], however [trade] protection across various sectors will surely increase,” asserted Vice-President Kalla.
The Vice-President pointed to the fact that as a member of the EU, the UK had unrestricted access to trade with 27 member states which was completely free of export and import taxes and tariffs. Moreover, the UK was able to attract foreign investment, as it was seen as a base from which to reach other EU member states.
“Indeed, foreign investment in the UK has already begun to plummet as a result of a lack of access to the Eurozone,” asserted Vice-President Kalla.
Ahmad Heri Firdaus, an economic expert from the Institute for the Development of Economics and Finance (Indef), expressed his confidence that the Brexit vote would ultimately have little to no impact upon the Indonesian economy as a whole.
“Indonesia has nothing to fear, because the Brexit vote will not have any significant impact upon the country’s economy. The EU itself will feel the most impact, and it may also affect developing countries such as Indonesia. However, in the long term, things will remain stable,” asserted Mr. Firdaus when asked for his expert opinion by Antara in Jakarta on Friday, 24 June 2016.
Mr. Firdaus further asserted that most of the negative impact of the Leave vote was likely to be suffered by the UK itself. Meanwhile, despite the UK’s status as an Indonesian export country, Indonesia still has other partnerships with other EU member states to cultivate, such as Germany and Spain.
Mr. Firdaus also stated that employment would become a major issue in the future, in light of the fact that the EU is founded upon the principle of so-called “Free Movement” of labor. By leaving the EU, the UK will no longer be able to enjoy this privilege and the movement of labor will become limited. As a result, EU laborers currently working within the UK’s borders will eventually have to relocate to another country such as Germany, France, or the Netherlands.
Moreover, the UK itself will have difficulty sourcing new laborers in order to support and develop its domestic economy. Around 800,000 Polish citizens, for example, currently live and work in the UK. Meanwhile, any foreign employees who remain in the UK will probably be subject to different treatment, such as no longer being entitled to receive social security and allowances.
“The growth of UK industry will slow, which means that their import activities and our export activities to the UK will also slow down,” asserted Mr. Firdaus.
On the ongoing UK-Indonesia economic relationship, Darmin Nasution, the Coordinating Minister for Economic Affairs, asserted that although the UK was set leave the EU, Indonesia could still enter into a bilateral Free Trade Agreement (FTA) with the UK. The government is also currently negotiating with the EU in a bid to finalize the European Union Comprehensive Economic Partnership Agreement (EU-CEPA) which should hopefully improve Indonesia’s international-trade outlook.
(hs/sp)