Carlos Westendorp, secretary general of Club de Madrid, present at the VI Astana Economic Forum, offered an exclusive interview to CaleaEuropeana.ro, in which he talks about the economic crisis and the ways to get past it.
Calea Europeana: We are here, at the Astana Economic Forum, a very important meeting at an economic and political level. So last year, you held a presentation regarding the opportunities and challenges of economic integration, What has changed since? What is the situation now?
Carlos Westendorp: Economic integration is necessary because all the challenges are suffering are global and the only answer to these global challenges is by global responses. There are very few organisations that respond globally to these challenges. Second best is Regional Integration Schemes. (…) Referring to Europe, the Europe’s problem with the crisis was that the integration was monetary only, but not economic. And it may work in times of economic development, in times of economic boom, but whenever there is a crisis like the one we’re in, then there is no collective response, it has to be more integration in the economic field.
Calea Europeana: You used to be principle advisor to Felipe Gonzales, Chairman of the Reflection Group established by the EU Heads of State and Government to assist the European Union to anticipate and meet the challenges facing in the period 2020 to 2030. In the mean time, we had almost a failure, with Lisbon Strategy, now we have Europe 2020 strategy. Europe is now facing difficult challenges in this period, is this a reason to rethink it, to reconfigurate it?
Carlos Westendorp: The strategy is very valid. In the report in 2010, many fields were identified as critical, the immigrations, we have to take into account the fact that our societies are getting older, so the problem of retirement, pensions is going to become a serious problem in 2030, there are energetic problems – countries that are oil producing, but oil is not going to last forever, so we need to diversify the economy. Politically, the European Union, if they want to be of relevance in international affairs, now that center of gravity is shifting towards East, then EU must be united if it wants to be a credible actor in the international field. So there were many challenges, and the conclusion was “yes, we can”, we can we can go with these challenges if we integrate and do the things we have to do and some of these are in 2020 strategy, but the problem is now , we are in the middle of a crisis and the immediate thing is to get of this crisis.
Calea Europeana: Everybody is asking when are we going to get out of this crisis, but the question is how. Who is getting us out of the crisis?
Carlos Westendorp : I think nobody is going to get out of the crisis without putting their strength on it. Of course, there are countries in this world that are not in this crisis yet, but they may be. If there is no economic activity in the one of the most important actors in the world then the crisis will spread. So we have to get out of the crisis and we also need to support from other countries. The Chinese currency is devalued, so this is a problem additional to the one Europeans have. We need to do everything that we can.
Calea Europeana: You said earlier that “yes, we can”. It is a transatlantic slogan, President Obama’s actually. Do you think it could work for Europe?
Carlos Westendorp: Yes, we can do it, but we have a lot of work to do, it’s not going to happen as a miracle, we have to do our job very well. The problem is how can we get out of this crisis with this pressure to just austerity, just reducing cost, just reforming the labor market. The situation now is that so austerity is leading to a flat encephalogram, there is no economic activity, we have to intelligently combine austerity measures with stimulation measures.
Calea Europeana: As you probably know, Romania was one of the countries affected by the crisis and one of the first countries in Europe, 25% of the salaries. The model seems to spread all over Europe.
Carlos Westendorp: At first, the difference between east and west divisions was bigger, now the economic difference is less acute. The difference in coping with a problem of balance of your budget, is also very big because there are countries that are unbalanced. Now, what we all have to do, all of us , is to reduce the deficit, but we can not do it over night, we need time.
Calea Europeana: And people are paying the price.
Carlos Westendorp: The people are seeing that we are reducing our salaries, we are reducing our employment, while at the same time we are rescuing the banks. So, those who created the crisis, are now the beneficiaries of it. We are living in a very critical political and economic moment, we have to act quickly.
Calea Europeana: Now we are in the east, we are looking to Kazakhstan, Russia… also today, here is going to be a discussion regarding a solution that countries such mentioned before could offer to EU in order to get out of the crisis. Is this possible?
Carlos Westendorp: Unfortunately, no matter how much we would like that Russia and Kazakhstan to do that, it’s not going to happen. We have to work all together, each of us have different situations. Russia has very important and natural resources, like Kazakhstan, but the resources are not sufficient to create jobs, you need to diversify the economy, you can have all incomes come from oil, but oils isn’t going to last forever and oil production is not labor intensive so oil production covers something like 10- 12 % of the total work force. Diversifying the economy is the way in which this country’s reaching natural resources creates jobs. Immigration is an important factor for countries in the EU, it’s a global solution, we can not do it by ourselves.
Calea Europeana: Regarding the situation in Romania, we are for almost six years, a European member state, and in the few years before the crisis we felt the prosperity and the effects of entering the EU. Now, we are paying the costs because of the crisis. You have a very important experience, almost 25 years with Spain, inside the EU.
What is the main advice you would give to Romanian government, Romanian people? Some of them are running out of patience because there are less European funds, we have the lowest rate of absorbing funds in the EU. We didn’t use the money in the crisis like Poland and there is a pessimistic approach that Eurobarometer is revealing.
Carlos Westendorp: It is like that but not only in Romania, but also for the rest of Europe. The EU is becoming less and less popular because citizens believe that the main reason of this crisis is the lack of good action from EU, and it is not fair because the EU is doing what it can do, it is a very important instrument. Something is clear, we are not going to out of the crisis by ourselves, we need to do it all together; we have the euro for those who are in the euro-zone, it is a very important measure, but it is not enough, we need to go on further integration, but salvation is inside Europe, not outside Europe. I understand that Europe is losing support, but some guilt of this situation, mental attitude lies on the national governments complain, blame the Brussels. And it is not true, it does not mean that the European Union is doing what they could do, the problem is not from EU, but from Germany. it is the country that is benefiting from the present situation because they have the euro, a lower currency than the deutsche mark would have if they were different countries. And those paying are the rest of the Southern countries, Romania, Spain, Italy, Portugal throughout these austerity measures.
Calea Europeana: So we are paying the gasoline for the German engine
Carlos Westendorp: That’s right. Because we are buying their products, also. We are in an impossible situation. The only solution is a real European integration in the field of economic and fiscal integration.
Calea Europeana: Is it also a matter of credibility. People seem to be losing their interest and credibility in the European leaders.
Carlos Westendorp: In all leaders. Also in Spain, politicians are not well considered, they are losing support because there is a crisis and they do not see politicians responding their demands, not solving their problems. The citizens are living worse than they were living. The problem with Romania is that you came late, but countries that came before to the EU have benefited from the integration. In Spain, 10 years ago, the Eurobarometer for index popularity was very high, nowadays, they are very low. Why? Because of the crisis.
Calea Europeana: How long do you think this difficult situation will last in Europe?
Carlos Westendorp: I am not a prophet, but I know what I wish. And I wish that this would start recovering soon, I can not say how soon, it depends on many factors.
Calea Europeana: Can you give a message to all the people interested in European affairs, global affairs that are watching us?
Carlos Westendorp: I would say that in Europe is raining now, it’s not good weather, but we all should work together for the common good.
Club de Madrid is the Largest World Forum of the former chief of states and government.
About Carlos Westendorp y Cabeza: In 1999 he was elected Member of the European Parliament representing the PSOE. He served as Chairman of the Parliament’s Committee on Industry, Trade, Energy and Research until 2003. In 2003 he was elected Member of the Madrid Regional Assembly and Speaker on Economy of the Socialist Group.
He was co-founder and Executive Vice-President of the Toledo Center for Peace and is now member of its board. After the elections of 2004 he was appointed Ambassador to the United States of America, a position he occupied until 2008.
He is currently principal advisor to Felipe González, Chairman of the Reflection Group established by the EU Heads of State and Government to assist the European Union to anticipate and meet the challenges facing in the period 2020 to 2030.
Svyatoslav Anatolyevich Timashev. Collective Nobel Peace Prize 2007 – Honored Scientist of the Russian Federation
Svyatoslav A. Timashev is a member of the Interstate Council on the issue of “heavy reliability pipelines”, a member of the Scientific Council and the Dissertation Council, the American Society of Mechanical Engineers (ASME), the editorial boards of domestic and foreign journals and a founding member of the International Association for design reliability and safety.
Svyatoslav A. Timashev, a Russian citizen, was awarded a collective Nobel Peace Prize for developing methods of CO2 sequestration from the earth’s atmosphere and its disposal, together with a group of scientists of the Intergovernmental Panel on Climate Change, who together formed the International Meteorological Organization and the United Nations Department of Environmental Protection in 2007.
For his achievements, Svyatoslav Anatolyevich was awarded the VSNTO (All-Soviet Union Council of Technical Society) (1969), the medal “For Valorous Labour” (1970), the Expert Public Education Badge (1984), a COMADEM Magazine prize for the best publication in 2000, and was dubbed Knight of Justice – Commander of the Sovereign Order of the Orthodox Hospitaller Knights of St. John of Jerusalem.
S.A. Timashev shaped a new direction in the theory of reliability of large mechanical systems, solved the problem of optimization of the critical systems operation in multi-level governance class. He is the holder of nine copyright patents and author of more than 250 publications, including 19 monographs.
Svyatoslav Anatolyevich created software systems for the optimal management of the operation of oil and gas pipelines, three generations of industrial electronic systems of vibration protection, vibration diagnostics, tribodiagnostics and monitoring of energy machinery and equipment and is the founder of a new section in the theory of reliability monitoring.
He developed the scientific bases of the theory and a fundamentally new method for optimizing the operation of a complex object by the criteria of reliability and safety, as problems of multilevel governance of stochastic processes of degradation and recovery. These systems are used successfully in the Russian oil and gas industry, aviation, heavy engineering, metallurgy and other industries, as well as in university educational laboratories.
All these works have received wide domestic and international recognition, as evidenced by the election of S.A. Timashev as a member of the RF Academy of Quality Problems, a member of the Washington Academy of Sciences (USA) and the Fulbright Academy of Science and Technology (USA).
On July 26 the laureate S.A. Timashev celebrates his 79th birthday and the 58th anniversary of the start of science teaching career. He was born in Harbin, northeastern China, one of the main transit points for trade with Russia. He graduated with distinction from the Ural Federal University (formerly the Ural Polytechnic Institute).
From 1987 to the present time Professor Timashev has been the head of the Reliability Laboratory of the Engineering Complex Problem Division at IMET UNC AN SSSR. He is also Director and Academic Advisor at the Science and Engineering Center “Reliability and service life of large systems of machines” at UNC AN SSSR.
VIDEO Astana Economic Forum. Interview with Eric Maskin: Kazakhstan can be a force for modernization in the Eurasian region
Interview taken by Razvan Buzatu, from www.caleaeuropeana.ro, with Professor Eric Maskin, PhD, Nobel Laureate for Economics, Adams University Professor at Harvard University.
He is renown at international level for laying the foundation of mechanism design theory. During his career, he contributed to game theory, contract theory, social choice theory, political economy as well as other areas of economics.
Razvan Buzatu: Professor Maskin, thank you very much for accepting this discussion for Calea Europeana. First of all: why Astana?
Eric Maskin: Well Astana is now holding one of the big economic forums in the world so it’s a natural place for people who are interested in issues of our time to meet. So, I’m glad to be one of the many participants.
RB: Well, Astana these three or four days is becoming the center of the world, right, and speaking about economics and how the world works at this moment, how do you see Kazakhstan involved in the global economy?
EM: Kazakhstan has an interesting position economically and geographically. It’s close enough to Europe so that it has close ties there, but it’s also close to the Far East and given its pivotal location we can expect great things from Kazakhstan in the future.
RB: Do you think that it can play a regional role in the Eurasian region?
EM: I hope it does. Kazakhstan seems to be forward looking, progressive country and I think it can be a force for modernization in the Eurasian region.
RB: Professor Maskin you’ve designed a well known design mechanism theory, and I was wondering if you can share with us a little bit of your thoughts on how can design mechanism theory, involving also Kazakhstan, can have positive implications on the European Union economy and Eurasian economy.
EM: Well, mechanism design theory is all about how do you create the institutions for aligning incentives. Of course, each country has its own goals which are not necessarily exactly in alignment with other countries’ goals and it is the function of international institutions to reconcile possible conflicts, this could be done through international organizations, through treaties, through political unification, but mechanism design teaches us that is not enough to, say, write a treaty, say, to promote trade, but the treaty has to be written with care to make sure that all the countries who are going to be signing this treaty actually benefit from it and that may involve a series of concessions on both sides, concessions about giving something up but the benefits from conceding is that now you have an international institution which enables you to take more from other countries.
RB: Very interesting, I was talking a little bit earlier with the Deputy Director General of the World Trade Organization, and he said that the new Bali Package that they established in December last year was a negotiation and was a break through, it was basically a new step forward for the WTO in terms of negotiating between India and China and also Cuba and USA, and also USA and India, so they reached to some sort of an agreement, some sort of compromise so that they can benefit economically; in this sense it resembles a lot with the design mechanism theory.
EM: It does in deed and in fact I think that the principles from the theory have now permeated people’s conciseness enough so that when these treaties are hammered out mechanism design theory plays a role.
RB: I will go now to the other side of the world: I believe you know very well what happened in Ukraine at the end of last year and the begging of this year. How do you see mechanism design theory, using mechanism design theory, in establishing a balance in the actors that are involved and are interested in what the path of Ukraine will be in the future.
EM: That’s a very difficult question, if I knew how to solve the problem of Ukraine I would be able to perform miracles so I don’t have any magic bullets for solving the Ukraine problem. All I can say is that we know from theory that the answer to conflicts is not typically the way of isolation and I would be worried if as a result of the tension in the Ukraine, if Russia for example became more isolated from the rest of the world and from Europe in particular to the extent that the countries continue to communicate with one another, continue to trade with one another, continue to cooperate with one another, that’s the way that the international tensions are resolved. Breaking of communication, breaking of trade I’m afraid that’s the risk of heightening tensions even further so I very much hope that the isolation doesn’t occur.
RB: Thank you very much. The theory is that the trade, at the trade level, in the Ukraine nothing has stopped but at the political level there are tensions. How do you see these things going hand in hand because some of them said “listen, it’s a real crisis” and at the trade level they say “we know it’s a crisis but we are still functioning”.
EM: “still functioning” for the time being. I think that unless they improve politically there is bound to be an economic cost in a longer term. Eventually, there can be lags either way. Economics lead politics or the other way around but not indefinitely, ultimately the two go together.
RB: Can we use the game theory and the Nash equilibrium with your theory, integrated? Is that possible?
EM: Well in fact, my theory, mechanism design, is part of game theory and uses game theoretic tools like Nash equilibrium as part of its analysis.
RB: And do you think they should be used integrated?
RB: How do you think we can do that?
EM: How can we apply them to…
RB: a certain event around the world, any kind of event?
RB: Use the 3 theories integrated to find a possible solution, not the solution, to an event in the world.
EM: Well, the first thing is to try to make precise what the goals of each of the parties are, but to recognize that there will always be some uncertainty about that. In games theoretic term these are games of incomplete information “I may know my goals, but I will never know your goals completely so I have to recognize that I’m operating in a situation of uncertainty. But game theory has developed tools to study interactions under uncertainty. On top of that, one way of resolving uncertainty is through a mechanism which is just an institution for international interaction. So that I think is the integration that you are calling for. Looking at the initial situation which involves a conflict of interests which is not completely understood because of the incomplete information, but layering on top of that an international mechanism, a treaty, for example or a trade agreement which brings the various parties closer together in agreement in their interests.
RB: One last question if I may? Do you see the European Union as a global actor? Like becoming the United States of Europe?
EM: I hope it will move in that direction. The European Union has successfully integrated some of its economic policy, namely the monetary side, if it can work on its other side of economic policy, namely the fiscal policy, and integrate that, I think it has a chance of having a comparable force with the USA on the global scene, but without that kind of fiscal integration I’m afraid that it will never quite have its act together.
RB: Well professor Maskin, thank you very much for taking the time to talk to us. I’m Razvan Buzatu, for Calea Europeana, from Astana.
“Journalism education: from theory to practice” – I International Summit of Journalism “G-Global: World of the XXI century”
In the course of the VII Astana Economic Forum and the II World Anti-Crisis Conference “Eurasian Economic Club of Scientists” Association and “Success K” media agencyorganized a panel session on “Journalism education: from theory to practice” as part of the I International Summit of Journalism “G-Global: World of the XXI century”.
The session discussed the issues of how to organize cooperation between journalists and experts in other fields such as IT, statistics, graphic and interactive design in education, and how to transfer this experience in journalism.
The event was attended by Co-Director of National Security Journalism Initiative & Medill School of Journalism, Northwestern University, Timothy McNulty; Director General of the Channel 7, Aziza Shuzeeva; Professor, Head of the Media Communication and history of Kazakhstan Department,Aygul Niyazgulova; Managing editor of Caspian Publishing House, Charles Van Der Liu; Director of the media school at “Kazmedia center”, Dana Rysmuhamedova; Editor-in-chief, “Finanz und Wirtschaft”, Martin Gollmer; Director of Radio “Astana”,Gulmira Karakozov. The session was moderated by the Chairman of the Board RTRC “Kazakhstan” Nurjan Mukhamedzhanova.
Most people think that it is not necessary to get a special education to become a journalist. As in case that no one will be able to do the surgery except a surgeon, no one can know better the professional tricks of historian, economist, lawyer and journalist, – shared an opinion Gulmira Karakozov, Director of Radio “Astana”, in the course of the session. Therefore, I strongly against this majority opinion. In 2005, Kazakhstan had 19 high school faculties, branches and departments that prepared professionals in journalism, and half of them belonged to the philological and historical faculties. I would like to say, the capability of journalists who were trained by linguists or historians, and taught in accordance with tutorials on journalism will not be high. This is a stumbling block in the preparation of professional journalists. Students must be taught by a person who has experience practicing in the field of journalism, – she stressed.
Recall, a purpose of the I International Summit of Journalism “G-Global: World of the XXI century” was creation of an information platform for interaction of economics, global journalism and latest technologies.
First, in Astana well-known media persons, bright bloggers, leaders and representatives of the world’s largest media holdings, website developers, website editors, newspapers and magazines editors, scientists, who demonstrate their achievements in the media, media tools and technologies, tried and tested skills in building information business and economic knowledge in the field of journalism brought together.
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