Nobel Winning Economist: Financial Crisis a Distraction

Agence France-Presse
December 4, 2008

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.

• A d v e r t i s e m e n t

“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.”

• A d v e r t i s e m e n t

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.

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This article was posted: Thursday, December 4, 2008 at 1:40 pm

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