50 Shades of Brexit

Today, the UK government, acting on the advice of its people in England and Wales, but against the wishes of those in Scotland and Northern Ireland, has sent notice that it will leave the European Union in 2 year’s time. It has triggered the now famous Article 50. Just as in real life divorce, none of the parties involved has any idea what the eventual cost will be and whether life will ever be better again. In future years, we will try to reassure ourselves that it could have been much worse but if we are honest we will have to admit it was painful. It may be that our country will not exist as a United Kingdom at the end of all this. As a nation and as a continent, we are in the trough of the change curve surrounded by uncertainty and reasons to be fearful. Unforeseen consequences lurk around every corner.

Is the uncertainty so essential to the experience? Why is the Government’s Change Management Team (prosaically known as the Department for Exiting the EU) not able to offer a realistic, straightforward and non-partisan description of the essential factors which will frame the divorce? It might also focus on outlining those many things that will stay the same. Hang on though; the need to admit that EU immigration will continue at much the same level as today makes that a bit tricky. But it surely will. The British economy is close to full capacity and we will need the young, hard working eastern European workforce to maintain its momentum and, by the way, pay for my future healthcare. I can already hear the howls of outrage from those that voted for Brexit mainly because they were fed up with multi-consonent, slavic tones in the doctor’s waiting room.

There is much discussion of the cheque that the UK will have to write to secure its freedom. Estimates range from zero to 60billion Euro. The idea that we can leave for free must be fanciful. The EU, like most national economies, is in debt in its own right; some estimates suggest to the tune of 300billion Euro. It is obvious that since the UK has contributed to the debt, then we will have to pay back our share, net of assets. More likely, we will refinance the amount and add it to our own sovereign debt. In the grand scheme of things, the amount involved is not large when compared with UK national debt which is measured in trillions. However, whatever the amount, it will certainly become the source of populist outrage and just maybe voter remorse of which there is currently no sign.

Another dark shade of uncertainty is that surrounding our future trade relationship with the EU. In trying to simplify this, pessimists paint a picture of day 1 of a hard Brexit in 2019 in which the ports of Calais and Dover are choked by hundreds of trucks waiting for customs clearance under World Trade Organisation rules. Has no one heard of the digital solutions which are already in every day use to handle such transactions?

The next 2 years and longer will be a rough ride for the UK and Europe. We could make it just a little less traumatic by replacing some of the politics with some honest communication underpinning well structured change management.

Talk Talk

I have been in South Africa for the last 3 months. I blogged earlier, quite optimistically, on the slow progress that the country is making towards a more equal and race blind country. Since then I have tried to soak up the important trends and to learn more about what is really happening here.

Two very different data points struck me as relevant:

The first relates to an entrepreneur trading informally in the Eastern Cape. He refused financial help offered by a government agency charged with promoting the cause of micro and small businesses;  arguing that he would then become like a child of the agency and less able, rather than more, to stand on his own feet. This self reliance is a characteristic of people here, evolved from pioneering ancestors of all races and surely a reason to be hopeful.

The second relates to the recently updated corruption perception index. This places South Africa in 64th place of a 176 countries. The country scores slightly above the global average. This is probably better than most South Africans would predict. A real positive is that almost no one thinks this is anywhere near good enough.

There is a vibrant media here that is outspoken in its fight against government waste, corruption and big business collusion. Radio talk shows (Shado Twala on SA FM for example) provide a platform for equally vociferous members of the public. This same vibrancy also perhaps feeds the pessimism of people here.

The progress of South Africa (a member of G20 remember) towards a fairer society is undoubtedly hindered by her small tax base. Extreme income inequality means that less than 10% of the population contribute 99% of the income tax. Unemployment at about 25% and a thriving black economy are major factors and tax payers are unlikely to be encouraged if they think their tax contributions are finding their way into the pockets of corrupt officials.

SA is proud of her constitution and she has worked hard to establish functional government at national, provincial and local level. In doing so, I think the mark has been overshot. The straight forward language of the generation of ANC freedom fighters, many educated in the old eastern bloc, has been replaced by something else.  When interviewed, civil servants and politicians tend to get mired in fashionable phrases and gobbledegook; currently every initiative is labeled as part of the hoped for radical socio-economic transformation. It is not enough to claim to encourage just entrepreneurship. It must be social entrepreneurship. There is a strong sense that there is a lot of multi-sylabic talk and little action.   This seems to me, to point to a need for  government to be stripped down to the essentials in order to deliver more rapid and sustainable change.

So am I more or less optimistic about South Africa after 3 months of privileged existence here? Is this country another Zimbabwe waiting to happen as many here would have you believe? I do not think so. South Africans are protective of their right to dissent. They see through the talk. There is too much that is good here and a healthy set of checks and balances upon which citizens now insist.