A misquote by a climate scientist, a misjudgement by Obama?s political pundits and a (mis)auction by India?s cricket oligarchs?these are three distinct and totally unrelated recent occurrences and yet bound by one underlying nuance. The reaction to each threatens to spill over onto the public domain with potentially adverse long-term consequences. The point of this article is to illustrate the fact that the wall separating the different worlds of politics, environment, culture, finance, sports etc are now so porous that actions taken in one area will almost always have an impact in other areas. It is to reinforce the comment that in our connected world, the flutter of a butterfly?s wings in one part of the world can indeed trigger a hurricane in another part.
That the IPCC erred in including the alleged comments of an Indian scientist on the melting of Himalayan glaciers without rigourous scientific assessment or peer group review is beyond question. That this mistake should cast doubt on the credibility of the totality of the IPCC research on the dangers of global warming is ridiculous. There are over a thousand scientists who have penned their reputations on the conclusions of the IPCC reports. If anything, the error simply reinforces the point that the IPCC has repeatedly made. Climate science is inherently uncertain?the reports identify 54 areas of uncertainty?and there is therefore a continuing need for scientific research. The problem is that this error has given climate change detractors a further peg on which to hang their scepticism. Copenhagen gave them an onrush of adrenaline. These latest controversies have provided a further kick. All this would not matter were it not for the fact that global warming is a reality and that these detractors are complicating an already difficult transition to a post-Kyoto world.
Obama?s decision to impose swinging restrictions on banks days after the Democrats were battered in the Senate elections in Massachusetts was motivated by politics. The mid-term Congressional elections are less than a year away and Main Street is appalled by the apparent greed of Wall Street. The public needed to be appeased. Obama announced that ?deposit taking banks? would be prevented from ?own(ing), investing, sponsoring hedge funds, private equity funds, or proprietary trading operations that were unrelated to serving their customers?. He disallowed them in effect from trading on their balance sheets for their own profit. The problem with this somewhat peremptory and politically driven announcement is that it is neither ?workable, desirable or relevant?, to quote Martin Wolf of the Financial Times. It is not possible, Wolf writes, ?to draw and more importantly police a line between the legitimate activities of the banks and those unrelated to serving their customers?. It is one thing to draw up regulations but quite another to implement them. This is especially so in situations where the effectiveness of implementation depends on definitional precision. For, in the absence of such precision there is usually a spawning of ?shadow? institutions that operate outside the ambit of regulatory reach. Obama?s decision may well severely clip the wings of banks like Goldman Sachs and JP Morgan but it is not likely to reduce the vulnerability of financial institutions to systemic risk. The obverse could well be the case. The regulations could weaken the market-based foundations of financial and credit markets and that then could generate a residue of wider economic problems.
The decision by the cricket oligarchs to ?ignore? the Pakistani cricketers in the recent IPL auction will have ramifications well beyond the sporting arena. The IPL owners may have good reasons for their decision although it could not have been related to lack of talent. Some of the Pakistani cricketers on the block were unquestionably world class. But whatever the reasons, the consequences of their decision have caused a setback to the efforts to improve Indo-Pak relations.
Hitherto, the publics on both sides of the border have welcomed the interfaces that cricket has enabled. There are, of course, inconveniences created by history and geopolitics but there is always a hope that these inconveniences will be overcome when cricket is involved. This hope has now been shaken. This has as much to do with the decision to boycott as with the actors behind the decision. The perception that private citizens viz Indian business have ?insulted? the icons of Pakistan?s cricket has weakened the one relatively stable plank on which Indo-Pak relations has rested?the public desire to not let politics intrude upon sports. This ?misauction? may soon move off the Indo-Pak agenda but the wedge that it has driven between the two publics will be difficult to remove.
In time-honoured tradition, the finance minister will present the budget later this month. Taking a cue from the above occurrences, however, I would hope that his statement would be made within a frame that, while acknowledging the urgency of particularistic demands, will recognise the importance of broader and longer-term interests.
The author is chairman of Shell Group in India. Views are personal