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YUNUS ON GLOBAL MELTDOWN
Fantasy economy rocks
half-baked capitalism
Catherine Makino talks to Grameen Bank's founder in Tokyo
The Microfinance guru Prof. Muhammad Yunus says the global recession presents a historical opportunity for change. IPS Correspondent Catherine Makino interviewed him in Tokyo while he was on a visit to Japan recently. The conversation follows.
IPS: How are the poorer countries going to cope with the long economic recession?
Muhammad Yunus: They don't have any control over the situation because they are the victims. We need to urge the world to fix the mess by using G-20, the United Nations, the World Bank and the International Monetary Fund. But there isn't any easy solution.
IPS: Do you think the crisis will get worse?
MY: Maybe it will go deeper and continue to get worse. The first point I would like to bring out is that although this crisis has taken over all the pages of newspapers and all the hours of television, this is not the only crisis. There are other crises and we should not forget that.
IPS: What are the other crises and when did they begin?
MY: In 2008 the financial crisis began, but before it began the food crisis. The food crisis didn't disappear, it was simply overshadowed and it could get worse. And 2008 was the year when the oil crisis shot through the roof and that crisis hasn't disappeared either. They're just keeping their heads down, and at the next opportune moment it can come back again. There's also global warming and it's getting worse.
IPS: Why do you think these crises came together now?
MY: This big package happened in one particular time, 2008. The reason I'm reminding you is because it is not in the papers. I think all these crises have the same fundamentals, and are not a separate expression of different parts of society or different parts of the economy. They all emerged from the same basic default that we have inside the structures we have built and we have to address those before we can fix anything up.
IPS: Do you see that as an opportunity to fix a system that does not work for everyone?
MY: This is the greatest opportunity because the crisis opened up opportunities. If things go right - even if it is a little bit shaky- nobody wants to touch it because it's working. Now, if it's not working, everybody's upset, everybody's worried, so this is a good time to address those things. It is a good time to touch things we thought were sacred. We have to sink into this opportunity, pull all our energies and minds together on how to make this opportunity useful and use it right now. We don't want to miss this great opportunity in human history.
IPS: What's your opinion on how this crisis started?
MY: This crisis was not created by us. It was created by a very small number of people in one country (the United States). If a small number of people can create such a disastrous situation for all the people of the world, then something needs to be seen here, a lesson to be learned. They rocked the whole foundation of our system and created misery for so many people. Today's capitalism is half-baked.
IPS: How about the wealthy people who were affected by the economic crisis?
MY: Those who will be losing billions of dollars are worried about it, but when it comes down to it, they will still be left with billions of dollars, and similarity those who have millions will be left with millions of dollars. Their lifestyle will not change. The real victims are the three billion people at the bottom of the population who didn't contribute whatsoever to this crisis. They will be losing their jobs, incomes and food and it will get worse. They became the victims of the banking system, which we need to change.
IPS: Will the bailout packages help?
MY: We talk about the bailout packages which will get the economic machine moving, but no one is talking about the bottom half of the population. Can't they put at least 10 percent bailout packages for the people who have been victimised by all this? This is the issue we cannot forget, and I insist we do not go back to the same old 'normal' situation that we are coming from. It has to be a new normal situation which will create a new direction. It will be a bailout for the people who have been victimised by this institution.
Grameen's microcredit
IPS: How has Grameen Bank's programme of microcredit been affected by the crisis?
MY: We haven't been touched by the financial crisis. Big banks have floundered, but we haven't. Today we have eight million borrowers who take out 100 million US dollars each month, paying back 99 percent of the time. Our model can go all over the world, including developed countries. In New York City, Grameen America is lending to women.
We're also talking to China and India. There are a lot of migrant workers in China who are losing their jobs. Beijing is very interested in social business.
IPS: How would you change the financial system?
MY: I suggest the economic system be totally redesigned. It worked for big business and rich people, but it didn't work for two-thirds of the world because they were excluded from it. Nobody will get through the cracks in the new system. The financial system should be rooted to the ground, not making a fantasy economy built with castles in the air which was the root cause of these problems.
Today's business is profit making and we are human beings, not robbers. Presently business is based on selfishness, which caused the crisis, but we are also selfless human beings.
The new system should be inclusive of two-thirds of the world. For example, most people in the U.S. cannot even get a bank loan; they have to go through payday to get loans. Payday loans charge 100 to 500 per cent interest rates. This is the failure of the banking system. Everybody should be entitled to a loan. Grameen even lends to beggars, who will buy fruit or candy and sell it.
IPS: Your company is involved in social business.
MY: The common principle of social business is a company created to help a social problem. Grameen Danone has used social business to address malnutrition in Bangladesh. We produce yogurt with all the micronutrients mixed in and sell it to malnourished children, so they become healthy. This company is trying to solve the malnutrition of children by business, not charity.
IPS: What other joint ventures and multinationals are you working with?
MY: We have now developed social business along with multinationals to appeal to communities to convince people we are human beings and not robbers. We have Bangladesh Intel (which is NASDAQ, Internet technology for rural towns), Verolia Water (creates clean water in Bangladesh) INTC, Groups Dabibe (yogurt to help fight malnutrition for children) and we are talking to Volkswagen, Adidas and Alliance on new projects.
- Inter Press Service
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Sri Lanka: Humane incentive for
all people needed
Jehan Perera in Colombo
Sri Lanka was discussed for the second time in many months in the highest international forum, the Security Council of the United Nations. As on the last occasion, Sri Lanka was discussed without being on the formal agenda of the meeting. If the government had expected its allies on the Security Council to block the discussion, this would have been a disappointment. There seems to be a limit beyond which countries find it difficult to support each other in international forums.
The discussion on Sri Lanka at the UN Security Council is reported to have revolved around the humanitarian crisis involving the trapped civilian population in the north of the country. The United States and United Kingdom had backed a Security Council call for a humanitarian pause to enable humanitarian supplies to be sent into the area and to permit the evacuation of civilians. The usage of the term humanitarian pause rather than the more direct term humanitarian ceasefire was probably in deference to the Sri Lankan government's antipathy to any ceasefire that could be extended to enable the LTTE to rearm and regroup.
The government appears to be rethinking its position on the humanitarian crisis in the north of the country. In the face of the mounting international pressure on the government, its defence spokesperson Keheliya Rambukwella has said that the government is prepared to consider a humanitarian pause as called for by the UN. However, he also added that such a humanitarian pause would be subject to yet unspecified conditions that would depend on the prevailing ground situation. He also made an assertion that indicates that the government's resolve to defeat the LTTE on the military battlefield remains unchanged.
In the course of his statement to the media, the defence spokesperson is reported to have said that the safe zone for civilians, which is the last remaining territory under LTTE control, had turned out to be a killing field for the security forces who were suffering casualties because they could not retaliate with their heavy weapons for fear of hitting the civilian population. He had added that once the civilians were evacuated the security forces would eliminate the LTTE, as they would have unfettered use of air power and heavy weapons. The problem with this reasoning is that it will be resisted by the LTTE in order to deny to the government that military advantage.
International sympathy
The LTTE's conduct in firing at the government forces from the midst of the civilian population and preventing them from leaving is clearly unacceptable. This is also why there is so little international sympathy for the LTTE at this time. International sympathy is with the civilian population who are trapped and suffering immensely. When the international community asks for a ceasefire it is not because they want to give the LTTE another lease of life. The public statements issued by a variety of international actors suggests there is a consensus within the international community, barring some minor political parties in Tamil Nadu, that the LTTE must not be revived as a military force.
Unfortunately sections within the government appear unconvinced that the international community is genuine in their motivation to save civilian lives and suspect that the international community is still trying to save the LTTE to fight on for another day. Speaking to the Bar Association of Sri Lanka, President Mahinda Rajapaksa is reported to have said that a ceasefire would give the LTTE an opportunity to drag out the war for another 25 years. Likewise the LTTE and its supporters, especially sections of the Tamil diaspora, appear to be hoping against hope that the international community will force a ceasefire on Sri Lanka that would give the LTTE another chance to fight on.
More forthright statements by the international community and greater discernment by the government and LTTE leaderships are necessary if a humanitarian catastrophe is to be averted. There are precedents in world history where those at the losing end of wars have fought to the end, leaving no one alive on their side. One is the siege of Masada by the Roman army in the first century. After three months of siege, when the Romans entered the fortress inhabited by members of a Jewish sect, they discovered that its nearly one thousand inhabitants, including women and children, were dead. They had set fire to all the buildings and committed mass suicide rather than face certain capture, defeat, slavery or execution by their enemies. Masada has been interpreted as symbolising the determination of the Jewish people to be free in their own land.
Averting catastrophe
It is common knowledge in Sri Lanka that LTTE cadres wear cyanide capsules around their neck that they have pledged to swallow so that they will not be captured alive. It is not impossible to envisage a situation in which the last LTTE cadre who are cornered within the safety zone with the civilian population will fight to the very end to ensure that there are a maximum number of casualties. If such a scenario should materialize the consequences to the country could be very serious, quite apart from the tragedy of the people who become the direct victims. It will be distressing and internationally shameful to Sri Lanka if the fate of the President of Sudan might turn out to be nearer to home than currently imagined.
There is however a more favourable scenario that could be fashioned by the government if it is serious about a humanitarian pause. The government has demonstrated its flexibility in accommodating and not prosecuting members of Tamil militant organizations, including those of the LTTE, who are prepared to join the mainstream. Douglas Devananda and more recently Karuna are two former Tamil militants who are now ministers of the government. The latter in particular stands accused of major offenses against the government and the law while being a member of the LTTE, but is today part and parcel of the government machinery. The government needs to offer other LTTE leaders, administrators and cadre an opportunity to come out without their weapons and to be guaranteed similar protection of the government and the law.
In offering such an opportunity to the people still remaining in the LTTE controlled territory, it must also be noted that until recently the LTTE ran a parallel administration. There could be thousands of people who were a part of this administrative apparatus, who might not have wielded weapons, but had a relationship with the LTTE. They may have simply been doing a job and not subscribed to the LTTE's methods of violence. They need to be given an assurance of their safety once they cross over. The involvement of reputed international organizations in the registering of people who are coming out of the last remaining LTTE territory, and in monitoring of the welfare centres where those people will be temporarily kept, will be an added incentive for a final and voluntary movement of people to take place and a humanitarian catastrophe to be averted.
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ISLAMABAD DIARY
After seven-hour ordeal at Lahore
Jonaid Iqbal
In the midst of rejoicing all around in Pakistan Muslim League (Nawaz) fold the restored chief Minister, Shahbaz Sharif, was quite guarded in his reaction, saying, 'the ball is in the court of Pakistan People's Party.' They (PPP) were his earlier coalition partners. But, according to President Asif Zardari, who is also the co-chairman of the PPP, 'PPP Assembly Members will sit in the opposition benches though they have been charged to support and will not destabilize it. An indication, that PPP has welcomed the Supreme Court Order and would not resist the PML (N) government. In the words of Prime Minister Yousaf Raza Gilani this demonstrates PPP's respect for the people's mandate given in the general election held on Feb. 18 this year. But this also mean that Shahbaz's old PPP partners will not accept Ministerial posts.
The new situation is not worry for the restored Chief Minister, since a splinter group within the Pakistan Muslim League (Quad-i-Azam) Provincial Assembly members have assured their support. Could this possibly lead to suspicion of horse trading and also, perhaps, infringement of Political Parties Act?
Now after the restoration of status quo ante one might be permitted to reflect whether the expenditure of several billions of public money and effort in the past 31 days caused by an unwarranted imposition of Governor's Rule could be justified in the face of an attempt made by President Zardari (and Governor Taseer) to establish PPP's government in the Punjab - a move which eventually backfired.
Be that as it may, according to one lawyer, it was the first time that the Court had reversed its own previous decision. However, other lawyers agreed that it lies within the powers of an independent judiciary to reach this decision.
The new development has replaced the perceived horror of seven hours encounter between Army and the Police. The two successfully snuffed out the armed attack at the Police Training Centre, at Munawaon, near Wagah Pak-India border. A captured militant is stated to be from Miran Shah, the tribal area.
The report of this incident is due in two days, but Baitullah Masud, who has since confirmed that he was behind the attack, to counter attacks inside Pak territory by American drones. If Baitullah Masud is against American drones attack why he should attack units the Punjab police training school.
More likely, it confirms what Prime Minister said at the National Defence University, that Pakistan has strong defence to face outside attacks, it is yet to build up adequate capacity to face counter insurgency at home. This would ring true that Pakistan was under attack, as stated by Interior Minister Rehman Malik while talking to the Media after the Munawaon attack, and also confirms analysts who say the attack at police training school was an indication that that militants are now concentrating on attacks in urban areas.
The Lahore incident of Monday resulted in eight deaths, and injuries to about 100 people. Suicide bombers, exploded their bomb-laden vets to evade capture, in what a newspaper reported as Fidayeen-style attack
The attack also took away the sheen from President Asif Zardari's address to Parliament, where he asked Nawaz Sharif to be friend again.
But something else has also come up after US President Barack Obama in a new US policy on Afghan-Pakistan promised $ 1.5 billion annual aid to Pakistan. However, the grant was not a blank cheque, but payment would be made only after Pakistan took action to defeat the al Qaida and Taliban within its borders. At the same time US army and opinion leaders in the USA are focusing on Pakistan spy establishment, the ISI, repeating the old charge that it is also in contact with them (Taliban and Al-Qaida elements). Pakistan has repudiated this charge officially at all levels, including the Prime Minister.
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