Nobel Prize winning economist Amartya Sen talks about globalisation and European protectionism

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Nobel Prize winning economist Amartya Sen talks about globalisation and European protectionism

Nobel Prize winning economist Amartya Sen talks about globalisation and European protectionism
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Indian born Amartya Sen was a distinguished but relatively unknown economist until 1998 when he won the Nobel Prize for economics. He was singled out for his ground breaking research into poverty. Currently a professor at Harvard he has studied globalisation deeply and an admirer of the welfare system in Europe and the safety net it provides for Europe’s population. But he also believes it practices a form of protectionism that hurts the developing world. The professor sat down for a one on one interview with our reporter Sergio Cantone.

Sergio Cantone, EuroNews: “Professor Sen, welcome to EuroNews. First of all, do you think that the EU is contributing to the fight against poverty in the world?”

Amartya Sen, Nobel Laureate in Economics: “I think two things that the Europeans have to think about more clearly. One is the issue of the access to commodity markets in Europe, because it’s still restricted and that makes a big difference to many developing countries, which would like to export more commodities to Europe. And the second is that the European model of a market based economy, supplemented by a social system of social insurance and so on, has to be more fully understood. There are big issues to be addressed within the European economy and these concern not only the developing countries interests, but also European countries: Does the counterproductive nature of agricultural policy in Europe make sense? Even for Europeans, not to mention Africans or Asians, or Latin Americans. A similar issue is to be addressed in the USA.”

Q: According to you is the EU protectionism a form of defence of the European social model?

Amartya Sen: “No, I don’t think it’s connected with the social model. If the agricultural prices are protected and commodity trade is restricted it is not in defence of the social model, that’s absolutely wrong I think. I mean, in fact the countries which are in some way the best examples of the social model, the northern countries, these are not countries which have been particularly keen on high agricultural prices. Yes, in certain amounts, but I think the high pressure has come from other countries. I think you have to unpack it: the social model is one issue, the commodity trade is another issue and they need distinction.”

Q: “ Do you think that from the protectionist point of view the EU is doing worse than the United States?

Amartya Sen: “No, I wouldn’t say they are doing worse, they are not doing a lot better either. You know, I don’t think that the USA is a particularly good model in this way, because I think Europe has many advantages one of these is that the practice of democracy is in some way more vigorous here.

The USA is the first democratic country in the world, you know, but democracy is both a matter of practice as well and Europe has great advantages, one of which of course is the plurality of power centres, being different countries which still have their sovereignty. Then there is the forum of the European Parliament which have the greatest importance, because it brings the perspective of different countries into the story and it provides a forum of public discussion of global issues in a way there’s nothing corresponding in America. So I think whether Europe is doing better or worse than America might give some comfort to the European thing while you think we are not at least doing worse than America. But that’s not enough of the comfort, Europe should be leading the world.”

Q: “China and India are two major economic powers now, and they have had a major impact on the oil prices. When do you think these unbalances will be reduced?”

Amartya Sen: “In the case of India, there is very little oil domestically, China has some more, but it needs more. And as a result, these are part of the reality of the energy crisis in the world. That’s not a problem of China and India, specifically. It’s a world problem. I think that the issues, which are raised more often, are those things, which are not really connected with normal economic growth in which the demand for fuel will grow up. And the particular success of the Chinese economy is in certain types of basically elementary engineering work very well done and in India information technology and increasingly chemicals and so on. And now, these are the ways the world economy operates: That some countries manages to raise productivity compared to their wages, dramatically. Now if it works in a way that is just, then that could be of benefit to the all world. Now what it does require t are two things, one is that it might require some adjustment in the rest of the world and within China and India itself.

But the other issue is being more innovative about what are the real advantages that Europe or America, and let’s talk about Europe in particular, have7;long backgrounds of skilled labour, enormous amount of experience in different areas and one has to see to what extend these could be models for the all continent to operate at a level which is efficient and just. “