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TheIndian EXPRESS
www.indianexpress.com

NEW DELHI l THURSDAY l JULY 26 l 2012

The Indian EXPRESS

BECAUSE THE TRUTH INVOLVES US ALL

VER since the clashes between Bodos and migrant Muslim groups in 2008, Kokrajhar, the seat of administration of the Bodoland Territorial Council (BTC), has held an uneasy peace. Trouble had been brewing for the last few weeks, after minority student unions and non-Bodo tribes began pressing their demand for greater representation in the BTC. After the July 6 shooting of two Muslim youths, suspicion had been directed at the now-defunct Bodoland Liberation Tigers (BLT) and four of its members were killed, touching off full-scale rioting. More than 40 lives have been lost and nearly 1.7 lakh people displaced. The army has finally been called in, but crucial time may have been lost because of the state governments inability or unwillingness to read the warning signs. The area under the BTCs jurisdiction has seen undercurrents of tension even after the Bodo Accord of 2003. The Bodo movement has its roots in the agitation against tribal land being acquired by immigrants. Land is a fundamental issue in the region that remains unresolved. On the other side of the divide, the minorities and non-Bodo tribes allege discrimination in political representation, since the BTC structure has given a larger

Govt could have reacted faster, before the violence escalated. It ignored the warning signals
say to the Bodos. Over the years, this power-sharing arrangement has appeared to rest on increasingly unstable ground. Finally, the Bodo Accord failed to ensure a round-up of the arms of the erstwhile BLT. Still in circulation, they sharpen the edges of the already fragile equations between groups. Both the state and the Union governments appear to have misread and mismanaged the situation in a district that has witnessed large-scale clashes in 1993, 1994, 1996 and as recently as 2008. While the 1996 violence between the Bodos and Adivasis saw 200 people killed and 2.2 lakh rendered homeless, Bodo and immigrant Muslims clashed in the other three instances, taking a toll of over 100 deaths in 1994 and then again in 2008. Not only would these clashes spread to neighbouring districts in the Lower Assam region, but the geographical location of Kokrajhar has always threatened to give the unrest a more ominous fallout. Kokrajhar, after all, is the landlocked Northeasts narrow passage to mainland India through the chickens neck. If the current trouble had been anticipated and adequate and visible security provided for at the first sign of trouble, the Northeast would not have been virtually cut off from the country.

Kokrajhar, unheard

Poachers, not tourists, are to blame for dwindling tiger population. Tourism ban is no solution
There is certainly a crying need to tone down the aggressive tiger tourism prevalent in certain parks. The number of tourists and the accompanying commercial activities that have sprouted in and around the area too should be regulated and managed. It is the abdication of responsibilities and the lax enforcement of regulations by the government that have forced the court to step in. Things should not have come to this pass. But conservation does not exist in splendid isolation. The people are and should be made stakeholders in the process. They should be sensitised on everything, from light and sound pollution to waste disposal in tiger habitats; not driven away. They could be the eyes and ears to seek out what is going wrong in these areas. In fact, it was the world outside the Sariska Tiger Reserve that sounded the alarm that the big cat, even a pug mark, had not been spotted in six months. What is needed is a workable balance between the demands of conservation and the pleasure and the edification that nature tourism provides to people. An outright ban is certainly not the glimmer of hope that is needed to break the bleakness of the story so far of tiger conservation in India.

Tiger myths

HERE are no two views on the imperative to protect the tiger. However, the Supreme Courts ban on tourism in core areas of tiger reserves raises questions on how it should be done, and whether a draconian clampdown on tourism is the best way to protect the big cat. The interim order, which is in force till the court finalises guidelines for protected areas, could in effect see an entire reserve being cordoned off from the people. The order is of a piece with the guidelines drafted by the Union ministry of environment and forests that seek to phase out tourism in critical wildlife habitat in five years. Last year, in an affidavit in the apex court, the National Tiger Conservation Authority too said that core critical tiger habitats should be kept inviolate and only management interventions be allowed. While the court and the ministry have the tigers interest at heart and it should be so, considering the number of big cats has come down from 100,000 at the turn of the 20th century to a mere 1,700 now they are holding the wrong end of the stick. And beating the public with it. Tourism is not guilty of whittling down the number of tigers, poaching is.

ROSECUTORS in the United States and regulators in Europe have begun a widespread criminal investigation into the manipulation of the benchmark interest rate London Interbank Offer Rate (Libor) by traders working for global banks. Largescale arrests could be made in the weeks ahead. Individual arrests will run parallel to regulatory proceedings against top bank managements to determine active collusion in the manipulation of Libor post the global crises of 2008. Libor was like an article of faith for decades as it acted as a benchmark rate for trillions of dollars worth of financial instruments on a daily basis. For instance, an Indian company borrowing threeyear money from a European bank would be charged Libor plus 2 or 3 per cent, depending on the companys own creditworthiness. Even nations borrow from the international market at Libor plus some percentage points. So in the world of global finance, Libor was implicitly trusted by all. This trust, in a sense, was the long preserved legacy of the western finance capital system. That trust has now somewhat broken down. In some ways, the Libor scandal dwarfs all other financial scams because it strikes at the very root of the system. To get an idea of the sheer scale of the systemic manipulation one just has to look at the total volume of financial instruments, including derivatives, which were traded on the basis of Libor. According to The Economist, over $800 trillion worth of financial instruments were traded on the basis of Libor. So if banks understated Libor by 30 basis points (0.3 per cent) the actual impact of this on $800 trillion worth financial instruments could well be over $2.2 trillion. This means there was a gain or loss, depending on which side of the trade you were, of $2.2 trillon which is more than Indias GDP. So, one can get some idea of the scale of manipulation that occurs by just artificially lowering Libor

Fall of Libor
The scandal may irreversibly dent global finance institutions built in the 19th century
M.K. VENU
by 0.3 per cent. The situation is now ripe for hundreds of class action suits by investors, like pension funds, who may have lost precious money by the understating of Libor by banks. The circumstances in which Libor was manipulated is also very interesting. It flows directly from the 2008 financial meltdown on Wall Street. To understand how this happened, it is important to know how the Libor is determined purely on a consensus basis every morning at 11 am by the leading global banks. Simply put, some 20 top global banks sit together every morning at 11 am to decide at what rate they will lend to each other for one day. Therefore it is called an inter-bank offer rate. bottom 25 per cent rates quoted by banks are cancelled and an average of the middle 50 per cent is taken. In normal times, when the market is healthy and robust, there wouldnt be much difference between the outlier and average rates. Indeed, they would be very closely aligned, with wafer thin difference, which is also a sign of markets functioning well. But after the 2008 global crisis the banks went into freeze mode and were not lending to each other freely because of the fear psychosis that money may not come back. The typical fear is you dont know which bank is in how much trouble. In such a situation, it became difficult for banks to quote exactly what their likely overnight borrow-

LETTER OF THE WEEK AWARD

Barclays has now announced an elaborate $150 million investigation into how rogue traders in its own system colluded to manipulate the Libor. However, it is impossible to imagine that the regulators, and indeed governments, did not have an idea that the inter-bank rate determination had become nontransparent after the global financial meltdown. To give a crude example, determining Libor must have been a bit like discovering real estate prices India where the markets are run by cartels. Now it is revealed that senior Bank of England officials were warned in an internal note even in 2008 that dishonest estimates of daily borrowing costs were being submitted by banks. At a broader level, one could conclude that the credibility of the famed finance capital institutions created in the 19th century by the white, Protestant business leaders is getting irreversibly damaged now. The New York Times columnist David Brooks puts it succinctly, Over the past half-century, a more diverse and meritocratic elite has replaced the Protestant Establishment (of the 19th century). People are more likely to rise on the basis of grades, test scores, effort and performance. Yet, as this meritocratic elite has taken over institutions, trust in them has plummeted. Its not even clear that the brainy elite is doing a better job of running them than the old boys network. Would we say that Wall Street is working better now than it did 60 years ago? For India, the current state of global finance poses some deep dilemmas. While India cannot disengage from the global finance capital framework as it needs large doses of foreign capital and technologies to fund its growing infrastructure needs, it will have to be far more nuanced in the way it draws its lessons from the current financial system, which is increasingly revealing its rotten core. The writer is managing editor, The Financial Express
mk.venu@expressindia.com

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EDITOR
IN Bad Timing Rahul (IE, July 22), Tavleen Singh has correctly pointed out that what Rahul Gandhi meant by a larger role was a more prominent place in the government. He is already playing a large enough role in the Congresss party affairs. The Congress is perhaps aiming to return to power in 2014 with Rahul Gandhi as prime minister. The country is passing through a difficult time with high inflation, rampant corruption and policy paralysis. Public anger against the Congress is mounting. Rahul Gandhi is free to up take any role he wants in the government but turning the tide in the Congresss favour will be no mean task. M.C. Joshi Lucknow THE vacuum in leadership

Letters to the

Take the lead

While India cannot disengage from the global finance capital framework as it needs foreign capital and technologies to fund its infrastructure needs, it will have to be far more nuanced in the way it draws its lessons from the current financial system, which is increasingly revealing its rotten core.
This is done essentially to smooth out short-term liquidity in the banking system as one bank may need urgent cash to meet some overnight exigencies while another may have surplus cash. So the rate at which banks borrow from each other overnight becomes the basis of all other interest rates in the market, whether it is for six months, one-year or five-year loans. This is how Libor affects all other interest rates in about 10 currencies globally. Libor is determined every day through a consensus process. The British Bankers Association asks each bank to put down its own likely cost of borrowing overnight. Different banks give different figures. The top 25 per cent and the ing cost would be for the purpose of determining Libor at 11 am in the morning. Since normal inter-bank borrowing was not happening after the 2008 Wall Street meltdown, global banks started understating their overnight borrowing rate to just show that they were still in great health. Everybody had a vested interest in stating a lower Libor. The cat was out of the bag recently when Barclays Bank management revealed that it quoted a more genuine Libor rate, which was 30 basis points above all others. In banking, this is quite a big difference and signifies serious abnormality in the financial markets. Eventually Barclays, seeing others were understating, also fell in line.

DESH GAURAV CHOPRA SEKHRI

T IS apt that London will be hosting the 2012 Olympics. In 1948, the last time it hosted the games, the world was recovering from World War II. The resilient and feisty host nation put a game face on what had been a torturous time for Europe. In 2012, London will be tested again as an aching Europe prepares to battle economic woes. London, unlike most other Olympic cities, is a legacy in itself. It is possibly the most recognisable city in the world, so hosting the games and creating its own set of memorable moments is a challenge. The stark contrast between the grandiose Beijing Olympics and the low-key London 2012 is as much a product of design as it is of accident. These are the green Olympics, and the environment, along with the future use of the infrastructure, is what will define London 2012. These Olympics will be about sustainability, and the economy of investment. London doesnt need a grand opening, a jawdropping closing ceremony or infrastructure that shapes the worlds imagination of what an Olympics moment is supposed to be. Instead, London 2012 is meant to inculcate the best practices and thrift in times of global crisis. Legacies are what define Olympics. When a city wins a bid to host the Olympics, the opportunity lies in creating

After the grandiose Beijing Olympics, a low-key London 2012

infrastructure and building collateral support to ensure that the residents of the host city benefit in the future. Most cities dont live by that ideal, and Beijing was the perfect example of facade-focused creation that lives only in memories and pictures. Today, none of the fabled stadiums or centres is in usable condition. It is this repeated focus on short-term creation that has led to the now well-known White Elephant Syndrome. London 2012 plans to limit spending, ensure that the infrastructure blends seamlessly into the city without any skyline alrings, London is actually trying to buck the trend by sharing the wealth of infrastructure created with other cities in the United Kingdom. Ideally, a young city which builds from scratch once it gets the Olympics should look at sustainability, since it is creating everything from the inception stage. That said, its admirable that London is trying to set an understated tone for the grandest stage in all of sports, despite the challenges of having to deal with a bustling metropolis and outdated transportation systems, not to forget an irate popnisable brand in the world, behind only the Apple phenomenon. People felt Beijing 2008 would be a hard act to top but the Olympics brand has grown by leaps and bounds, and there can be no fathomable reason for this to change. Although most Olympics have enabled a complete facelift for the cities that hosted them, this is hardly a prerequisite for success. In fact, in an era where the Commonwealth Games, Delhi 2010, created a global furore with its inability to curb expenditure or justify infrastructure creation, sustainable and low-key games may in fact be exactly what is required from the Olympics this year. However, the London games may get flak if they fail to keep the expenses within the budget or to dazzle with the no-frills aesthetic. Especially since Rio de Janeiro, centre of the new economic growth hub, is preparing for back-toback mega events the FIFA World Cup 2014 and the Rio Olympics 2016. But its time now for London 2012 to set the tone for muted splendour and understated legacies. The world is watching and theres a lot at stake. If history repeats itself, London 2012 will weather yet another storm, and set the tone for future games to emulate. The author is a sports attorney. Views are personal.
express@expressindia.com

The austerity games

in the Congress and the general mood of uncertainty is reflected in Rahul Gandhis diffidence in accepting a position of responsibility in the party or the government. The Congress has a difficult task ahead preparing for the 2014 elections with no promising leaders, and most party members reluctant to take the reins. In the absence of a strong binding force at the top, the Congress will also go the same way as the other political parties, much like the BJP fragmented and , caught up in internal feuds. S. Kamat Bardez

Fighting the dragon

TS almost a cliche to talk about Indias possible demographic dividend, when all the young people will enter the labour force, increasing productivity. Or to point out how young a nation it truly is. According to Census 2011, half the country is less than 25 years old, and about 65 per cent is under 35. Indias median age is 25 well below China whose median age is 35. Sheer numbers, then, should make it surprising that India also has a political class that is, on average, a full 40 years older than the average citizen. A new report in The Economist underlines this yawning age gap between Indias people and its political leadership. The report, compiled with data from national governments of 10 nations and the UN, also shows that the gap in the ages of Indias people and its politicians is the

Why are Indias young represented by one of the worlds oldest political classes?
highest among the nations studied, which includes the other BRIC nations and advanced countries like the US, Japan, Britain and Australia. Germany records the least difference between its politicians and the people they govern; the gap is only eight years. But that has more to do with an older population than with younger politicians. The youngest policymakers are found, surprisingly, in Russia, the only BRIC country not to be a gerontocracy. Its median age is 38 and its politician is a sprightly 47year-old on average. It is striking that the rich countries on the list with the exception of the US, which has both the youngest population and oldest political class for an advanced nation have political representatives who are relatively young, while the developing world seems to prize, or accept, greying leaders.

Grey and greyer

These are the 'green' Olympics, and the environment, along with the future use of the infrastructure, is what will define them.
tering manoeuvres, and that the legacy stadiums and other associated infrastructure are reusable or even moveable. Detachable infrastructure is unprecedented, therefore a parallel ongoing process is strategising how the existing infrastructure can be re-designed, expanded or contracted, based on the city plans. After all, this is the very reason why London won over Paris while bidding for the games. London 2012 has focused on veering away from the ideal of legacies. Unlike other host cities in the past, which jealously guarded the treasures of the ulation that feels its tax money could be better used elsewhere. The infrastructure has been created along lines that have not been tried and tested so far. Democracy comes at a cost, and London will not have the breathing space that Beijing had for budget fluctuations and infrastructure enhancement. For a tournament that boasts of being green and environment-friendly, the ongoing controversy around sponsorship by Dow Chemicals is hardly a ringing endorsement of such a project. The Olympics rings are the second most lucrative and recog-

the patriot (IE, July 21) is a fine analysis of the Chinese Communist Partys doubleedged policy of supporting nationalism for its political interests and suppressing it when people protest against the governments misrule and fight for democratic rights. To some extent, this is true of all governments in the world. However, even the United States, the main market for Chinas merchandise, has not been able to stop Beijing from holding democratisation hostage to nationalism. It seems that the US, the selfstyled champion of democracy and human rights, does not want to cross swords with any country in this region. Satwant Kaur Mahilpur

MINXIN PEIS Party and

Game changer

Prosecution of journalist hackers is not an indictment of the British press as a whole

why these cases are handled with the utmost dispatch. When all is said and done, there will be those who interpret the charges announced yesterday, whatever ensues, as corroboration for their view about the excesses and general depravity of the British press. But those same people should also consider that, without the revelations about Milly Dowlers phone and the public outcry it caused, the police might have left their investigations on the backburner. And how did those revelations reach the public, but on the pages of the British press? From a leader in The Independent, London

Tarred with the same brush?

PRINTLINE

William Arthur Ward

WORDLY WISE

Adversity causes some men to break; others to break records.

HE Crown Prosecution Service announced that eight people would face charges of conspiracy to intercept communications without lawful authority... The list of those charged was headed, by accident of the alphabet, by two former News of the World editors Rebekah Brooks and Andy Coulson.... The anguish caused, especially by the Milly Dowler case, makes it highly desirable that all the evidence be examined openly and in court. All those charged deserve the opportunity to clear their name or to know that they have been convicted according to due process, rather than in the court of public opinion. And while fast-tracking is hardly an option, there are human and political reasons

Rahul Sharma is in a fix after he tested positive for drugs following a raid on a rave in Mumbai (After being tested positive, Rahul Sharma left out of Team India, IE, July 21). One wonders if the selectors on the Board of Control for Cricket in India knew of this before choosing him for the national side. But the BCCI has never been known to be transparent in its dealings. In spite of everything, one can only empathise with Sharma, who is a Kumble-style leg spinner. He will be a sad loss to the team. Ganapathi Bhat Akola

PROMISING cricketer