I recently visited the United Kingdom for a wedding of a dear friend. It was my first visit after the British voted to exit the European Union (Brexit) and my last visit was two months before the Brexit vote.
I recall during my visit in April 2016, discussions with my British friends centred on Brexit. Many held passionate views but all agreed that whatever the outcome, there is a imperative need to make it work.
The initial shock and fallout from the decision are well documented. But after a couple of weeks, the predicted political and economic apocalypse did not happen.
In fact things turned out better than expected despite the initial shock and the election of Donald Trump as the President of the United States further ameliorated the shock.
However, one year down the road, as the full effects and breath of Brexit take shape, a silent and pernicious outcome is taking place.
The UK economy has grown slower than the entire Eurozone for the second straight quarter this year despite the country being the fastest growing Group of Seven (G7) economy in 2016.
According to the House of Commons briefing paper SN06193, in 2016, financial and insurance services contributed £124.2bil in gross value added (GVA) to the UK economy, 7.2% of the UK’s total GVA.
London accounted for 51% of the total financial and insurance sector GVA in the UK in 2015. There are over one million jobs in the financial and insurance sector (3.1% of all UK jobs).
The UK had a surplus of over £60bil on trade in the financial and insurance sectors in 2016. In 2015-16, the banking sector alone contributed £24.4bil to UK tax receipts in corporation tax, income tax, national insurance and through the bank levy.
However, a new report has warned that the UK could lose up to half of its investment banking jobs over the next few years if the government continues to pursue a hard-line exit from the EU.
As many as 40,000 sales and trading and investment banking roles could move from the City of London to other European finance hubs as banks scramble to maintain access to the European single market once Britain leaves the bloc in 2019, according to estimates from consultancy Oliver Wyman.
The collapse of the financial services industry in the UK would severely cripple its economy and adversely affect the government’s finances, leaving reduced amount of money for important social services.
Hence, while the debate rages on between a hard and soft Brexit, let us focus on Malaysia and the lessons that can be learned from taking such drastic political decisions without fully appreciating its impact.
The new Opposition pact, Pakatan Harapan (PH) recently announced some broad policy proposals, which while beguiling, is devoid of factual basis.
PH claims it will abolish the Good and Services Tax (GST) but has yet to explain how it will plug a RM42bil loophole in the government budget.
This so called promise requires a more in depth critical evaluation due to the fact that British Petroleum (BP) recently announced that crude oil prices will not rise above US$55 a barrel in 2018.
Hence, Petronas will not be able to contribute more in revenue to the Malaysian Government in 2018.
PH says it will abolish tolls without giving a full and honest account on how it will come up with the money to compensate toll operators due to lopsided agreements, signed during the leadership of the coalition's current chairman.
It also claims that it will provide one million job opportunities without identifying how it will do so - from what allocation or which sector of the economy or from what investment.
PH also promises to stabilise oil prices within its first 100 days in office without taking into account simple rules of demand, supply and accounting.
If the coalition were to use subsidies to stabilise oil prices, what money will it have at its disposal after GST and tolls have been abolished?
Given that these promises are fanciful and completely lacking in common sense, Malaysians must ask themselves: can PH be trusted with government? The answer is a flat no.
Despite pretending to be a government in waiting, it does not have a shadow cabinet and a prime ministerial candidate.
Barisan Nasional (BN) on the other hands, not only offers solid and durable leadership, but at least you know where BN stands on a particular issue.
Also, the BN Government has delivered for the people with the Mass Rapid Transit (MRT) project as the latest example. Further, the BN Government has shown that it is ready to make the hard choices to ensure economic prudence and growth, such as rationalising subsidies, curtailing government expenditure and divesting from grandiose projects to stroke egos.
PH is politically insolvent because it has a vision that is a fairy tale, a leadership that thrives in sniping one another and an agenda that is self-serving.
BN on the other hand, is the best choice for the people because it knows what it is doing.
In the end, Malaysians must not take a political gamble like our British friends because experiments in governance rarely turns out well, more so for a society as complex as ours.
It is better to stick with a tried and tested political movement and appreciate the value of political stability.
> The views expressed are entirely the writer’s own.