Sean McLaughlin: Brexit parallels with Cape Independence (and why it belongs in the bin)

The UK's Brexit experience offers lessons for Western Cape independence movements, highlighting the challenges of economic integration, administrative burdens, and constitutional barriers. Advocates overlook crucial issues like currency stability, trade deals, and border control. Independence risks significant disruptions, while national reform through devolution could better address regional aspirations without harming South Africa's unity and economy..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here. .By Seán McLaughlin.The decision of the United Kingdom (UK) to leave the European Union (EU) gained momentum on the premise that UK was confident about its economic place in the world. Divorce ourselves from the indebted Greece and Spain, and sign trade deals with the booming English-speaking world, the argument went. Its beauty was in its romantic deception – the UK trades more with the Netherlands than the entire commonwealth..How the tables turn. Since then, the UK has regressed significantly whilst those same economies of Southern Europe have staged significant recoveries..Western Cape Independence movements in the Referendum Party (RP) and the Cape Independence Party (CIP) have a similar rallying cry in that the rest of South Africa is failing so the Western Cape must hide behind the Great Wall of the Karoo..A first is that is a selfish argument. .It was not neighbourly behaviour of the UK to 'kick-its-friends-when-they-were-on-the-ground.' .In the mid-2010s, the EU was struggling with issues from the Eurozone Sovereign Debt Crisis Round 3 (Greece), immigration influxes and terrorist attacks. Instead of offering assistance to overcome these issues, the UK proceeded to break apart the union for the first time. This not only added to a list of problems but drove enormous wedges between political classes, families and friends. .Regions within countries and countries within trade blocs assist each other in more ways than commonly considered. For example, Northern Ireland – my homeland – runs budget deficits with the UK national government. However, the inordinate amount of Northern Irish citizens living in England and thereby contributing to the UK exchequer in the first place is never counted in such figures. .The experience gained of the successes in the Western Cape government run by the Democratic Alliance (DA) ought to be replicated should the party take over the government of Gauteng sometime around in 2029..A second is that the administrative burden can be crippling, and integration so deep. .Brexit took the work of around 25,000 civil servants over a four-year period (on the UK side alone)..And the UK was never part of the EU's border free Schengen Zone nor the single currency area of the Euro. .The Western Cape participates in these two South African equivalents – it uses the Rand currency and shares immigration policy. .So, what would the Western Cape currency be? Do the CIP and RP understand how disruptive currency divorce is? Do they have monetary policy experts?.The reason why the Greek flirtation with leaving the Eurozone rolled on for seven years was that everyone involved understood that the damage from currency divorce would have scarred the country for a generation..The loss of trust, market volatility, erosion of savings, hyperinflation. Those are a few of the consequences. Would Cape Banking deposits or savings before 2027 be in Rand and anything after that in Cape Rand? Will criminals continue to use the Rand? Who will call in the circulation of the Rand in the Western Cape? Would markets interpret it positively for an Independent Western Cape? Might they not and the Cape Rand start to tumble? .Maybe this was not such a good idea after all..Understanding the Difference: Schengen area and Eurozone.The Times.I advance a lot of questions, and the burden of proof should rightly be on those advocating radical change from the status quo. The RP and CIP manifestos address none of this and look more like wedding invitations. That such individuals' ideas could gain mass is concerning..The same applies to immigration policy. Will all South African citizens be entitled to live in the Western Cape? If not, who determines who will? Who will police a hard border in the Karoo? Who will police maritime traffic flowing from Plettenberg bay to Gqeberha? Who will pay for all of this?.The last thing that South Africa needs, on top of its current multiple problems, is a breakup of the union. How many civil servants will be needed to negotiate this divorce? 50,000?.A third is the customs union. SA forms of the world's oldest customs union – SACU – the Southern African Customs Union. That also includes Botswana, Namibia, Lesotho and Eswatini. .That means that these countries broadly share regulation on traded goods within a single duty-free area. Goods destined for these other countries pass through SA ports, and SA in turn compensates these countries. In the case of Eswatini, SACU receipts were around 42% of the government's budget in 2023/2024..So, what is the CIP and RP's policy on a customs union? Will it be a part of SACU? Who will negotiate the divorce? What might the government of Botswana have to say about this or do in return? Have they thought about regulation governing shampoo and rabbit food? Who will stop and check these at the border? Do they know you cannot sign a trade deal independently if you are part of a customs union?.An irony of Brexiteers was wanting to divorce from a customs union when many regions are seeing coming together in customs unions such as ASEAN in Southeast Asia. That eases and reduces trade regulations..More countries in the same trade bloc also provides more leverage in external trade deals. An independent Western Cape negotiating external trade deals would be a David and Goliath situation. Are chicken producers in the Western Cape okay with US chlorinated chicken flooding the market in the event of a US-Western Cape free trade deal?.If the answer to all these questions is 'keep-things-broadly-the-same', then what is the point? That would create uncertainty. The Western Cape may soon find itself crumbling under the administrative and logistical burden it has volunteered for. .Brexit reversed 40 years of integration in everything from regulation on fire alarms to cooperation in university research. The Union of South Africa is much older from 1910..A fourth is the constitutional roadblock. I direct any readers to Sizwe Mpofu-Walsh's assessment of how a vote for succession is not possible within the current constitution. A two thirds majority would be required in parliament to change the constitution. That seems most unlikely. .A fifth is that there does not appear to be unity at this early stage. There are at least two pro-independence parties, The Referendum Party (RP) and the Cape Independence Party (CIP). I do not know if these movements are deeply divided but it may suggest a divergence in what a 'liberated' Western Cape would look like. .This was clear in the Brexit debate. Vote Leave at times offered a libertarian vision of post-Brexit Britain, with no borders nor regulation. Leave.EU offered more of a fortress Britain type. The two visions were incompatible, and one would always cry foul..A sixth is that the SA media should consider the consequences of giving airtime to ideas that may sound good but are in practice very dangerous. The media can make the unthinkable become the inevitable. Therein lies another Brexit parallel, in calling the referendum, the British Broadcasting Corporation (BBC) had to give equal airtime to the arguments of the Leave Campaign. Professor Michael Dougan at the University of Liverpool asserted that Brexit was among the most deceitful campaigns in British political history. A vote to leave based on correct information is one thing, a vote to leave based on incorrect information is another. .Four years after the Brexit agreement, pharmaceutical companies bemoan the loss of half their market..Productivity and investment has flatlined in the UK. The Economist in April this year pointed out that around 61% of Britons now regret Brexit and would oppose it if asked again..The Economist.Panorama.I sympathise to a small degree with the idea of the movement. The prospect of a market-leaning breakaway in the Southwest is also a counterbalance to pursuing a road to Zimbabwe at a national level..The movement's growth could even provide impetus for reform at a national level. Let us assume the Democratic Alliance, (DA – which governs the Western Cape but is not pro-independence), brokers a deal. Instead of calling a Referendum on Independence, more powers such as policing are devolved in return for liberalisation of the economy in certain areas. .There are proven Oil and Gas reserves offshore the Western Cape. That may come into play if the movement gains momentum. But SA's loud environmental lobbies have prevented exploration and there likely lies reserves along the entirety of SA's coast..The Bin.I acknowledge the Western Cape success story. The DA deserves credit for its clean governance there, both in the municipalities and in the provincial government, (despite continued inward migration). The record would suggest that the devolution of policing – as most countries in the world do – would also make the Western Cape much safer..Nonetheless, the Western Cape success story does not chime with a lot of people elsewhere in the country for various reasons..Independence advocates should remember that the Western Cape's continued success relies on the assumption that the good governance of the DA will continue..Prior to the 2024 elections, the Western Cape was the only one of SA's nine provinces in which the DA governed. The pro-market leaning of the DA appeared to clash with what the Marxist-inspired ANC was 'doing-to-us' at a national level..Then following the 2024 elections, the DA assumed governance at a national level, coalition government in KwaZulu-Natal and may in time lead the government of the capital province of Gauteng. .These are the years for South Africans to push in moving the dial towards a successful act of union, free from race-based politics for the first time. .The CIP did not gather enough signatures to stand in the 2024 National elections. The RP received 4,206 votes nationally, or 0.03% of the total. .Most seem to have the good sense that breaking up the Union of South Africa is an idea that belongs in the bin. .Read also:.Cape Independence: Phil Craig's fight to redefine South Africa's political landscapeBizNews Briefing – Syria, Iran impact on SA; De Beer on Zille; Cape IndependenceDreams, myths and realities of Cape Independence: Terrence Corrigan.*Seán McLaughlin is a Political Scientist and Data Analyst.

Sean McLaughlin: Brexit parallels with Cape Independence (and why it belongs in the bin)

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