GLOBAL ECONOMICS
CHAPTER 5
BREAKING UP IS HARD TO DO
There is probably no more embarrassing experience for a Canadian than to be asked by a foreigner to explain why Quebec is contemplating secession. "Can't you Canadians solve your internal squabbling?" you are asked. You start by explaining Canada's history of linguistic and cultural duality since the Battle of the Plains of Abraham. Then you skip to the fight over official bilingualism and the October 1970 crisis. By the time you mention the French Language Charter, Bill 178, and the Meech Lake and Charlottetown accords, your non-Canadian friend is completely confused and begs to change the subject- He still doesn't understand why such a wealthy, seemingly prob- lem-free country stands on the edge of breakup.
Secession isn't supposed to happen in the polite company of the G7 group of industrialized nations. Yet in the past century there have been plenty of examples of breakups, both successful and unsuccessful, peaceful and violent. We tend to forget that even the most stable and prosperous federations have at one time or another been threatened by secessionist movements. The United States, whose sense of patriotism and national purpose is the envy of many Canadians, achieved this solidarity only after a bloody Civil War that resulted in more than 600,000 deaths and whose wounds took decades to heal,
We also forget that Switzerland, that prosperous land of sup- posed multilingual harmony, only adopted its present constitution after a federal army of 100,000 crushed a rebellion by seven Catholic cantons in 1847. Even tranquil, linguistically homoge- neous Australia faced the threat of breakup in the 1930s, when the state of Western Australia, protesting the centralizing policies of the federal government, actually voted for secession in a refer- endum. Interestingly, the British Parliament refused to accept the petition for secession because it didn't have the support of the federal government. As prosperity returned to Western Australia and the federal government provided more financial aid, the secessionist tendencies died away and Australia remained united.
There are other cases too: the division of Norway and Sweden in 1905; the Irish split from Britain in 1921; the breakaway of Pakistan from India in 1947 and Bangladesh from Pakistan in 1971; and the expulsion of Singapore from the Federation of Malaysia in 1965. In recent years, a spate of new states have emerged from the remains of the collapsed Communist world.
Yet there is no case of a successful secessionist movement in an advanced industrialized democracy like Canada. The Scots, the Catalans, the Basques and the Corsicans may grumble about their lot, elect secession-minded parliamentary representatives and occasionally even plant a terrorist bomb, but Britain, Spain and France remain united. Perhaps it's because these countries are sufficiently adaptable and prosperous to provide their minori- ties with enough in the way of power and money to satisfy their immediate demands. Or because, as democracies, they can allow their minorities to express their differences without going all the way to a split.
The Canadian case, however, is unique. Not only does the Quebec separatist movement control a powerful state apparatus-- the Quebec provincial government--but it gets to pursue its option with the active support of the federal state, through tax-deductible political contributions and a system that bends over backwards to be fair. There was no better example of this than Lucien Bouchard's trip to Washington in the spring of 1994, where the Canadian embassy did its best to set up all the right appointments in Congress and the State Department--in effect helping a dissident political leader go about his business of destroying their country.
For years, Quebec separatists have used the breakup of the union between Norway and Sweden in 1905 as an example of a peaceful split that had gone well for both sides. It clearly appeals to the social democratic leanings of the Parti Quebecois to cite the case of Sweden, although with Sweden's recent experience as one of the few Western countries with a debt crunch worse than Canada's, it's probably wiser for Jacques Parizeau not to pursue the comparison. The separatists should also be reminded that the division of Norway and Sweden wasn't quite as smooth as they would like us to believe.
Norway and Sweden were united in 1814, but the only thing the two countries shared was a king who controlled joint war and foreign policies. Otherwise, they remained separate, each nation retaining its own citizenship, government and courts. Norway resisted all Swedish moves to increase political integration. Conflicts in this sort of loose union were inevitable, but the buildup to actual secession took twenty years. What precipitated the final break was the decision by the Norwegian Parliament to push through legislation giving Norway its own diplomatic repre- sentation abroad, knowing that the king would veto the legisla- tion and bring on a crisis.
Although the break looks benign ninety years on, at the time there were threats of military force and considerable hard feelings. The political conflict preceding the split also exacted an economic toll on Norway for many years. And here's one aspect of the Norwegian split from Sweden that you won't hear from Parizeau. When Norway held a referendum to gauge public opinion on secession, it passed by 367,149 votes for and 184 votes against, or a margin of 2,000 to 1. No question here of 50 per cent plus one. One final fact: the currency union between Norway and Sweden that had existed since 1863 fell apart in 1914, nine years after the split.
The Irish break from Britain was decidedly more violent than the Norway-Sweden division, but it, too, is interesting for what it tells us about the process. Ireland's relationship with Britain had been bitter for centuries, and despite the legislative union of the 1800s, the Irish still considered themselves an occupied people. Nationalism, fed by poverty and emigration, continued to grow, and early in this century, violence mounted, leading to the Easter Rebellion of 1916, the declaration of an Irish Republic and its military defeat within a week. Violence raged again in the War of Independence from 1919 to 1921, which culminated in the estab- lishment of the Irish Free State, in which Britain agreed to give Ireland dominion status similar to that of Canada but left the six counties of Northern Ireland as part of the United Kingdom. There followed three years of civil war between the new govern- ment and the republicans who opposed partition of Ireland and other terms of the secession agreement. The final constitutional link with Britain was broken only in 1949 when Ireland became a republic.
The Republic of Ireland paid a high price for independence. The economy languished until the late 1950s, crippled by the Depression and shortages during the Second World War and weakened by isolationist policies. And the political aftermath of the split continues to preoccupy both countries more than seventy years later, the governments of Ireland and Great Britain only recently showing signs of being able to work together to address the continuing problem of Northern Ireland.
One postscript to the Irish-British split: the agreement signed on December 6, 1921, that cemented the formal split was only about five pages long, with eighteen brief sections. If only it could be so simple for Canada and Quebec, but a modem, heavily indebted welfare state such as Canada is much more difficult to divide.
Not all splits end up hurting the divorcees economically. The collapse of the brief federation between Singapore and Malaysia is a case in point. Singapore joined the Federation of Malaysia in 1963, but less than two years later the experiment was over, when Singapore was expelled by the rest of the federation. The failure of the merger has been blamed on racial conflicts between indige- nous Malays, the largest ethnic group in Malaysia, and the Chinese who dominated Singapore. Whatever the reasons, the two went their separate ways. But the breach hasn't stopped Singapore from becoming one of the most productive states on earth, or Malaysia from becoming one of the fastest-growing countries in Asia.
THE VELVET DIVORCE
It's the collapse of Czechoslovakia that gives Canadians the most food for thought- Dubbed the "velvet divorce" by many observers, the division of this federation of 15 million people came quickly and with no violence, in contrast with the ferment in the former Soviet Union and the carnage in Yugoslavia.
The quick breakup of Czechoslovakia was made possible because the Czechs, who initially supported the federation, decided that they had had enough of Slovak demands. It took place because the politicians wanted it. Most people on both sides didn't back the split and never had an opportunity to vote on it in a referendum. The story of what happened in Czechoslovakia is told, succinctly and from a Canadian point of view, in a recently published study, The Breakup of Czechoslovakia, written by Robert A. Young, a political scientist at the University of Western Ontario.
Czechoslovakia was formed after the First World War out of the ashes of the Austro-Hungarian empire and was a prosperous democracy until the Second World War, after which the country was absorbed into the Soviet bloc. What started Czechoslovakia down the road to dissolution was the collapse of Communism in eastern Europe that began in 1989 and the rapid political and eco- nomic changes that followed. The rise in inflation and the drop in gross domestic product that came on the heels of economic liber- alization was particularly hard on Slovakia, which was smaller and poorer and depended to a great extent on the armaments industry, which now found itself in crisis. But neither the Czechs rior the Slovaks wanted separation. In a public opinion survey conducted in 1990, 72 per cent of Czechs and 57 per cent of Slovaks favoured a federation. Only 6 per cent of the whole pop- ulation favoured a split. Yet by the end of 1992, the federation was history.
The Slovaks had become increasingly fed up with the status quo. Only 20 per cent believed that the federal government treated them fairly. Slovak nationalism was rampant and, under pressure from nationalists, the Slovak National Council, the legis- lature of the Slovak Republic, pushed through a language law making Slovak the only official language, limiting official com- munications in languages other than Slovak and outlawing offi- cial bilingual signs, a move reminiscent of Quebec's language law. In March 1991, intellectuals and the Slovak National Party published a Declaration of Sovereignty for Slovakia, which envisaged independence for Slovakia, including its own army, money and foreign policy but an agreement with the Czechs on continuation of a common state. It was to be a kind of sover- eignty-association.
While the Slovak leadership moved towards separatism, the Czechs continued to believe in the federation and even favoured increased centralization. Talks continued on a treaty that would have provided a new definition of the powers of the federal gov- ernment but by 1992, things were starting to come undone. In an election for the federal assembly, national parties more or less collapsed and the assembly came to be dominated by parties rep- resenting Czechs on the one hand and Slovaks on the other.
What's fascinating about the process that led to separation is that when the Slovaks initially pushed for greater autonomy, the Czechs resisted. Yet, like the rebellious teenager who always threatens to leave home until he is eventually kicked out, the Slovaks themselves never seemed convinced that they wanted to go all the way. The Slovak leadership declined to hold a referen- dum, unsure they would win, and began proposing a confederal option in which the Czechs and Slovaks would each have sover- eignty within a loose union.
Although they shied away from a referendum, Slovak politi- cians kept on pushing separatism. In July 1992, the Slovak National Council, the equivalent of Quebec's National Assembly, passed its declaration of sovereignty, a symbolic act which didn't formally end Czechoslovakia but provoked the resignation of Vaclav Havel as federal president. Havel said immediately that if a split did occur, he might run for president of the Czech Republic. With Havel gone, the Czechs realized the federation was finished and talks began on the final split. In September, the Slovak National Council adopted its own constitution. Yet the Slovak leadership still wanted something less than complete separation.
Anton Hykisch, the Slovakian ambassador to Canada and a Slovak member of Parliament from 1990 to 1992, said that a referendum was never held because no more than 30 per cent of Slovaks ever wanted separation. What they wanted was "a weak association between the Czech and Slovak states." Ambassador Hykisch recalls vividly encountering the Slovak leader Vladimir Meciar in the fall of 1992 after his initial talks with the Czechs. "He was very, very upset and confused- He told us that it was a terrible situation. The Czechs wanted to separate completely."
After a few months of talks on the terms of the split, Czechoslovakia died on December 31, 1992, and was replaced by an independent Czech Republic and an independent Slovak Republic.
Even though the Slovak declaration of sovereignty and the adoption of a constitution did not in themselves constitute separa- tion, these moves were effective in convincing the Czechs that the federation was finished. It may be no coincidence that the PQ government plans to have the National Assembly pass a declara- tion of sovereignty prior to the referendum. This move seems designed as much as anything to undermine Canada's resolve to stay together by presenting separation as inevitable even before the vote has been held.
Like Canadians outside Quebec, the Czechs for a long time ignored the rise of Slovak nationalism and continued to believe in the federal state, but they grew increasingly irritated by manifes- tations of Slovak nationalism such as the Slovak language law. They also began to feel that the Slovaks were holding up needed economic reforms that the Czechs were ready to proceed with, and were taking more out of the federation in terms of subsidies than they were contributing, (hi fact, as early as 1991 each side had prepared independent assessments of economic issues and the division of assets in case of a split.)
One Czech witness of the breakup of Czechoslovakia sees par- allels in the Canadian situation. He predicts that the PQ govern- ment will do all it can to damage the federation and irritate Canadians outside Quebec who will eventually tell Quebec to "go away" out of exasperation.
While the parallels with Canada are interesting, there are some fundamental differences. The Czechoslovak federation had only two members, not ten as in Canada. "As the republics assumed power and moved toward separation, the central government could simply wither away," Robert Young notes. "This is not true of most other federations, where the central government. .. must be the interlocutor of the secessionist unit." In other words, once the Czechs decided that the federation was over, they could talk directly with Slovaks about dividing the house because their loy- alty and effort was immediately transferred to the new Czech Republic. In our case, Canada would be diminished by the depar- ture of Quebec but it would still exist as a federation, making any eventual negotiations all the more complex.
Also instructive to Canadians is the fact that the Czechs ended up in a position of strength in the negotiations because once the decision was made to split the country they didn't want any half measures. Slovak efforts to gain approval for a new confederation of Czechs and Slovaks with shared citizenship and shared defence policy were rejected by the Czechs. As the Czech pre- mier, Vaclav Klaus, said at the time, "What we definitely want to avoid is to create some unknown, never-tried artificial combina- tion of two countries in some crazy form."
Once the decision to split was made, the negotiations were swift, taking less than four months, with the signing of thirty- one agreements including one establishing a currency union. Despite a customs union, trade relations ran into initial difficul- ties. Border points were established to control the movement of people and goods. Defence assets were split on a two-to-one basis, according to relative population size, as were movable assets, with fixed property going to the republic in which it was located.
But the currency union collapsed within six weeks, prompted by a run on Slovak banks. The Czechs didn't seem too upset by the failure. Ambassador Hykisch cries foul on this move, accus- ing the Czechs of secretly preparing special stamps to distinguish their currency from that held by the unprepared Slovaks. "We had no central bank. We had to create a new bank and a new currency in a few weeks." .
What's interesting about the effects of the split is that the Czechs seem more satisfied with the result than the Slovaks. The Czechs have managed to attract many times more foreign invest- ment than the Slovaks, who are still involved in a stop-and-go approach to economic reforms and privatization. A public opin- ion survey in mid-1994, eighteen months after the division of the country, showed that 57 per cent of Slovaks would have voted against secession if they had had a choice in a referendum.
Comparisons with Canada can only be taken so far, however. Unlike Slovakia, Quebec will never leave Canada without a refer- endum. Democracy is too well entrenched in Canada to allow politicians to ride roughshod over the popular will. Yet the Czechoslovak example does show how dangerous it is for voters who aren't interested in secession to give determined separatists a mandate to govern. Like the Slovak leadership, Parizeau will do all in his power, including passing a sovereignty declaration in the National Assembly, to set Quebec on what will be portrayed as an unstoppable march to secession. Quebeckers, including many who don't really want secession, may find turning back the tide harder than they anticipated,
The most significant conclusion for Canadians to draw from the Czechoslovak experience is that the side that has the least to lose can do the best in the negotiations. "The advantage in negoti- ations lies with the side that is least prepared to compromise," Young says. "Simply enough, leaders who are willing to accept the consequences of negotiations breaking down are able to extract concessions from their partner-opponents." While the Slovaks had that advantage at the outset, they lost it when the Czechs decided that the federation was finished and that they weren't willing to accept any kind of sovereignty-association.
One final lesson from the experience of secessions in other countries: Once the break is made, it is irreversible. Only when force has intervened, as in the American Civil War or in the after- math of Biafra's attempted secession, has unity been restored. Once Quebec leaves, it is gone forever.