IBON –Brexit referendum win another sign of neoliberal policies failure

June 29, 2016

by IBON Foundation

Research group IBON said the prevailing vote for Brexit is the latest political affirmation that neoliberal globalization-driven integration like the European Union (EU) is failing. The Philippines will have an advantage if the incoming Duterte administration appreciates this as the latest sign of the major emerging countercurrent to reckless neoliberalism.

There was a referendum on whether the United Kingdom (UK) should remain or leave the EU on June 23. Brexit, the term coined for “British exit from the EU”, won by a 52 to 48 percent margin.  However, this was only a referendum vote and it is still unclear when and how the UK will officially exit the EU.  There are already calls and a petition for a second referendum to be held. Post-exit policies also remain unclear.

The Brexit win is a political consequence of bad economics, said IBON. Because of the very neoliberal globalization policies it staunchly implemented and advanced, the EU economy and Europeans are struggling to recover from the global economic crisis.  This has led to growing skepticism among the British on its EU membership, and fears that this will eventually bring down the UK economy.

The groups also stated that UK economic growth now is slower than in 1973 when it joined the European Economic Community, which eventually became the EU.  According to official UK statistics, growth is much lower from 7.1% in the first quarter of 1973 to 2.1% in the first quarter of 2016.

The declining UK economy has led to increasing joblessness, low wages and is creating an underclass of poor, said IBON. The country’s unemployment rate rose from 3.9% in the first quarter of 1973 to 5.1% in the first quarter of 2016. Despite improved employment rates in recent years, wage growth has also slowed meaning an increase in low-paying jobs.   Bank of England data showed that wage growth fell from 3.3% in May 2015 to 1.9% in February 2016. Meanwhile, latest data shows overall UK poverty incidence rose from 15.9% of the population to 16.8%, the 12th highest among EU member-countries. Austerity measures and severe cuts in public spending have been used to stave off the worsening effects of the economic crisis.  But these have fueled dissatisfaction with the UK’s leadership and direction, which has now been expressed through the spontaneous Brexit movement.

IBON also noted that an actual Brexit creates the possibility of more independent and perhaps even protective economic policies in Britain.  This may even eventually spread further if the exit stance spreads to other European countries like France, Spain, Italy, Greece, and others.

This can serve as a cue for the Philippines. The country’s neoliberal economic policies should be adjusted accordingly away from neoliberalism towards greater economic nationalism and more pro-Filipino and democratic measures, said the group.