“Paper” bread

If only paper were bread. After the discovery of paper would not be famine on earth. Today, the world can’t find a piece of bread. However, the paper is abundant: the wealth – is paper, confidence, trust – is paper, inheritance – is paper, almost everything in paper. Maybe it should have been, because from majority’s point of view the birth and death of human is paper. As a result, even, very warm realities have been etched on the paper, still they are always cold as ice – like the paper that shows statistics on global poverty and misery.

Moving for essence...

Now, the main problem for global economy is to slow the financial crisis, to achieve sustainability of financial institutes and at the end, reinforce the financial sector to support economic growth in the real sector.

It is very clear that, global financial powers and some developed countries mainly are worried from global financial crisis. Also, they popularize this financial crisis as a main problem for all global economy. Is the problem so actually indeed? Maybe, the issue is not so seriously like the “ballyhoo” around that.

The impact of current financial crisis to human development indicators is doubtless: ongoing unemployment, declining of incomes especially in developing countries etc.

But, approaching to this problem some differently, we face very interesting essences.

First of all, the main victims of the financial crisis are creditors of global loan markets. As a result, the subjects of global loan markets – big financial institutes make losses after interest rates declining and the increase of speculative capital stocks are weaken. And this process weakens their abilities on absorption of financial resources in the global level.

In spite of, the global financial crisis is continues for long time, some groups of economic systems generally are not living these problems in the world:  or they escaped from some waves, or didn’t infect with current crisis, in general. Here, local financial institutes develop sustainable, economic growth is going on and incomes rise.

On the other hand, the prices of exported goods and services from developed countries to theses economies falls. It means that, the cost of technological part of the new value added falls. Because of decline in aggregate demand in developed countries the unrealized part of supply rises. It leads to export of goods under lower prices to regions with low income level.

We may continue these arguments.

But, we see that, global financial centers and global economic powers almost show this crisis as an end of humanity.

Nevertheless, the “battle” mainly for the “paper”: convertible currencies - are paper, debt securities – are paper, benefits of rich institutes – are paper, almost everything is paper. And the “paper” is power, the power that always does the paper powerful.

But, when:

ü 1.4 billion people in developing countries, or rural areas account for three out of every four people living on $1.25 a day or less;

ü 22000 children die each day due to conditions of poverty;

ü 1.7 billion people lack access to clean water;

ü and finally, 2.3 billion people suffer from water-borne diseases each year

Why we don’t name these problems as a global crisis?

Which one is the main element for human requirement: minimum food and living norms, or convenient financial services and high profitable financial markets?

Of course, schools of economic theories say that, the financial sectors are supportive for real economy. Of course, schools of economic theories say that, aim of financial market’s development is to support real sector developments and as a result, to achieve human development targets.

If so, instead of deep problems of human development we will name the lack of “paper” as a global crisis. But, the humanity problem will go on: every five of us will be deprived of minimum social norms and living standards.

Statistical sources:

IFAD Rural Poverty Report
Human Development Report
UNICEF State of the World's Children
WHO Unsafe Water, Sanitation and Hygiene

 Aghanemat Aghayev