The reverberations following the vote in favour of Britain leaving  the EU in the June referendum are being felt  not only in Britain but worldwide.  The prime minister, David Cameron was impelled to hold the referendum because the Tory party was split on the issue. The right wing of the party in favour of leaving the EU  were driven by  the racist anti-immigrant UKIP party  to match  its policies.  The wing of the party led by David Cameron, while in favour of remaining in the EU, during the campaign  highlighted the concession made by the EU to Britain of being able to restrict the rights of EU immigrants coming to Britain claiming benefits.  This wing of the party was backed by the industrialists, who have a big  market for exporting their goods to the EU. The Brexiteers on the other hand see the future for the British economy in strengthening their trade links with the US and the rest of the world. Racist and anti- immigrant views dominated the campaign.  David Cameron resigned  as prime minister and was replaced  by Theresa May, who has appointed a cabinet including three  right wing Brexiteers in key posts. They are Boris Johnson,   Foreign  Secretary, David Davies as Minister for Brexit and Liam Fox as Minister for the newly created Ministry of Foreign Trade. The change in government has strengthened  the right wing of the Tory party and bolstered  racist and xenophobic forces in Britain and the EU. There are tough battles ahead for the left wing parties in Britain and the EU  to combat these forces.

          The left in the referendum campaign was split as to whether to back  the “remain in” or “leave the EU” campaign. The Labour Party (LP), led by Jeremy Corbyn, while critical of the EU, voted to remain on the grounds that it was best to fight for workers rights within the EU together with other  left wing forces in the EU.  Most of the Labour   supporters voted to remain in the EU. On the far left, in the SWP, Socialist Party and Communist Party of Britain, the arguments  were for leaving, as this would lead to the downfall of the Cameron government, the Tory party would be in disarray and the political situation would move to the left. Following the success of the “leave” campaign, these far left parties  claimed that the working class, by voting to leave,  reacted to the Tory government’s policies of poverty wages, zero hour contracts and unemployment. In so doing they had delivered a  big blow against the establishment.  While it was the case that a section of the working class had voted  to leave the EU, to punish the government for its neoliberal policies, it was also a fact that the campaign conducted  by the  right wing Tories and UKIP, blaming immigrants for unemployment, falls in wages and the housing shortage,  had been swallowed  by  sections of the working class. These votes  helped swing the vote in favour of leaving the EU. In contrast to the SWP and Socialist Party, Socialist Resistance (SR) argued in favour of remaining in the EU. Although SR recognises that the EU bosses Europe and is wedded to neoliberal policies, any decision about whether to remain in or leave the EU has to be guided by which option best suits the interests of the working class. Its assessment was that in the carnival of reaction prevailing during the campaign,  it would be difficult for the left,  opposed as it is to the EUs neoliberal policies, to distinguish itself from the  anti-immigrant and xenophobic  stance of the  Brexit campaign. It predicted that the fall of the Cameron government would be followed by a further move to the right and therefore chose to support the “remain” campaign.

  In the aftermath of the referendum result Theresa May declared   “Brexit means Brexit”. The government has not given any indication when it will trigger the two year process by which Britain must leave the EU.   The likelihood is that with the Brexiteers dominating the government, it will go crashing out of the EU with no economic safety net beyond World Trade Organisation rules, entailing costly tariffs. The softer option is to negotiate an exit and a preferential trade agreement with the EU. In the racist and anti- immigrant atmosphere fuelled by British politicians during and after the EU referendum, there has been a steep rise in racist hate crimes. Jo Cox, a Labour MP, was killed by a fascist during the campaign and a Polish immigrant was murdered after the referendum. The UN has pinned responsibility for stirring up race hatred on rightwing British politicians. The new government is set to carry on with neoliberal policies and curbing immigration. In the midst of a challenge to Corbyn’s leadership of the LP, engineered by right wing LP members of parliament, left wing forces are rallying behind Corbyn. The policies he champions  offer the best option against racism, unemployment and  poverty pervading the country.

      In dealing with the economic implications of  Brexit for South Africa, the rating agency Moody’s (Fin 24. July 08, 2016) points out that in view of  the country’s integration into global financial markets, including its investment and financial links with Britain, it is the African country  most exposed to  any fallout from Brexit.  South Africa’s current account deficit leaves it vulnerable to short-term capital outflows amid changes in investors’ risk perceptions. It could therefore be adversely affected  if Brexit were to lead to increased risk aversion  and reduced investor appetite  towards emerging markets.  As an example of risk aversion by foreign capital, in the first quarter of this year, the current account deficit increased to -5% of GDP. This was mainly because there was a massive outflow of corporate dividends reaching $11bn, paid to owners of foreign capital (Patrick Bond, Pambazuka News 94847).

             South Africa is the largest recipient of British foreign direct investment (FDI) in Africa. Mining and quarrying and financial services are the main recipient sectors.  South Africa reported its lowest FDI levels in ten years in 2015,with Brexit related uncertainty  likely to reduce these flows even further. If Britain, in leaving has to sign new trade agreements with the EU  and this were to lead  to slower growth of the British economy, the South African economy might suffer, according to Moody. There is also the flow of tourists with 17 % of overseas tourists originating from  Britain.   Following Brexit, Britain may have to sign trade agreements with the EU and this could lead to slower growth of the British economy, which might have an adverse effect on South Africa.