Bitter ashes are tossed on the 'remains'

The defeat of the "remains" in the United Kingdom June 23 referendum on its EU membership leaves lessons for Asean -- despite the fact that it does not follow EU's model of regional economic integration. Unlike the EU, Asean has not allowed for harmonised fiscal and monetary policy, and the free movement of labour and capital. Neither does it have selective equivalents of Schengen visas, euro currency, etc. although it allows an Asean "minus x" formula for certain projects. What can Asean gather from the Brexit success?

Assess perceived versus actual net benefits continuously

Membership in any grouping is always subject to the rationale of benefits exceeding costs. It behooves leaders to continuously study their constituents changing the calculus of such perceptions. This is the sentiment of one "remain" supporter in the British parliament and others in the EU who were surprised by the vote.

Many in Asean do not communicate these citizen sentiments regularly except for occasional reports to mark milestones. All are content to say the Asean Community is a work in progress, even by the end of December in 2015 when it was supposed to have been launched.

These net benefits perceptions are in contrast to the reality of solid numbers behind economic ties -- the flow of people, things, and money -- necessary for starting public debates, but not sufficient to win people to one's side.

Three modern EU and UK concerns -- migration, terrorism and Russia -- have been intertwined with the weak recovery of the world economy since the great financial crisis of 2008 -- inevitably impacting all economies. London, a key financial centre of the world, and Northern Ireland and Scotland voted to remain in the EU, but lost to the rest of the UK whose people must have been overwhelmed by their feeling of a net negative position by remaining in the EU.

In this regard, more granular and detailed survey questions should be designed to probe the minds and hearts of citizens of the new century. Big data should be mined, but new questions must be asked. Traditional survey firms may miss the nuances of smaller groups and how they interact with other smaller groups on various political, economic and social issues, the key to understanding the present world.

Recognise various types of chaos in the new century

The 21st century is a chaotic or VUCA world. We may know little or a lot of citizen's feelings in a socially networked world, and similarly for the predictability of the actions of leaders faced with problems. Combined, we are worse off not knowing where we are on either side of the governance market.

This was exactly how those who campaigned for the "remain" side of the referendum felt -- a close vote which in hindsight could have been made favourable to their cause had they changed strategies. The cold logic of economic numbers no longer cause people to behave rationally.

An investment downgrade and a probable economic slowdown may not have been seen as probable or bad by the "leave" voters. Indeed, their perception of job security may no longer be just a case of outsourcing fear, but domestic economic malaise that may result to jobless growth in certain regions.

Indeed, policy makers in the UK, EU and Asean will have to deal with different generations as we face longer lifespans: Younger people postpone marriages, live longer with parents and impact on housing demand; productive workers and entrepreneurs are more globally mobile (geographically and electronically); and retirees' pension plans and medical benefits are eroded by inflation and various expectations, thus redirecting certain types of consumer spending.

Keep economies and mindsets open

Open regionalism of Asean born in the late 20th century must be preserved versus the EU fortress mentality that emerged from post-World War II. Both groups started largely as responses to avoid regional political conflict, but economic linkages now define their raison d'être.

As Brexit is a reality, a number of groups in EU are suggesting similar divorces. In Southeast Asia, the fear of pandemics, the Pacific Ring of Fire, and climate change could be the common enemy Asean should unite against. Indeed, the reason why intra-Asean trade is much smaller than that of intra-EU or intra-Nafta trade is that it has adopted open regionalism as its philosophy, extending it to the Asia Pacific Economic Cooperation. Trading with other regions rather than a Fortress Asean insulated from other world markets is what has defined Southeast Asia. Yet Asean's relative openness is far from the EU's in other areas, thankfully.

Asean has Mutual Recognition Agreements to allow for skilled labour movement -- but it is in less than 10 professions, and its implementation is constrained by national legislation and bilateral negotiations. Fear of massive migration from Indonesia to Singapore is solved with transient workers in one island, preserving the fiction of a single regional production base that is the goal of the Asean Economic Community by December 2015. The financial integration is not about to replace what some bankers argue already exists with technology innovations allowing for cross-border transactions.

Will Brexit inspire economic separatism? Singapore's founder Lee Kuan Yew once deemed separation from Malaya as a death knell for its economy. But its open economy was continuously re-positioned to meet global market opportunities.

Sub-regionalism in Asean may in fact be the answer to prevent exits. A more robust Brunei, Indonesia, Malaysia and Philippines east Asean growth area can be a better answer to the Mindanao challenge.