Financial crisis a distraction, says Nobel winner

http://rawstory.com/news/2008/Finan...ner_120 3.html

12/4/2008

LONDON (AFP) — The global financial crisis is distracting attention from other pressing issues such as high food and energy prices, and environmental damage, Nobel peace laureate Muhammad Yunus told AFP Wednesday.

The Bangladeshi economist warned that not addressing those other issues would lead to a "much bigger crisis ahead" that would have political and financial implications.

"What we see as a financial crisis is a part of many more crises, which are going on simultaneously in 2008," Yunus said in an interview while attending a summit of business leaders in London.

"You remember the food crisis? It's still on, it didn't disappear. Simply, this (financial crisis) became much more pressing and everybody is paying attention."

He continued: "Then we have the energy crisis, it's still there... And then the environmental crisis, we have not solved anything about the environmental crisis."

Yunus, who along with his Grameen Bank won the Nobel peace award in 2006 for efforts to lift people out of extreme poverty by giving them small loans, said that any solution had to "address simultaneously all these four" crises.

"It's a framework problem: we have to have a framework which can address these issues about the lifestyle, about food production, technology, pricing, globalisation, tariffs."

Though food prices have dropped off recently, the United Nations' Food and Agriculture Organisation notes in a briefing that should not "assume that the world's food problems have been fixed."

Energy prices have also declined from highs of around 150 dollars a barrel in the middle of the year to under 50 dollars, but Yunus said the decline would be temporary.

The former economics professor noted, though, that the "worst kinds of disasters, which we have right now, are also the best of opportunities.

"Now, we should be looking at the opportunity part, in a big way, in a global way, and in a comprehensive way, together," he said.

In recent weeks, governments in Europe and the United States have pledged trillions of dollars in public funds to bail out financial institutions reeling from the credit crunch -- sparked by a crisis in the American sub-prime mortgage sector -- and re-ignite lending.

Most recently, finance ministers from all 27 European Union countries met Tuesday to discuss proposals for a stimulus plan totalling 200 billion euros (250 billion dollars), equivalent to 1.5 percent of EU gross domestic product.

Yunus criticised the government aid for banks, describing it as "bailing out the people who are responsible for creating this crisis but... not looking at the victims of this crisis.

"The real victims of this crisis are the bottom three billion people of this planet," he said.

"They are the ones who will be losing their jobs, they will be losing their livelihoods.

"It's the guy who has only one job for the whole family, he is the bread winner, he lost his job and the whole family suffers because of this. Nobody is paying attention to that.

"If you continue to ignore that, it will grow into a big political problem, a big financial problem, attached with the food crisis, the energy crisis and so on."