Loomnie

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), originally signed in 1994, gave developing countries until 2005 to bring their IP laws in line with the new legislation. With respect to drugs, Indian, Brazilian, and Thai pharmaceutical firms could no longer copy drugs that American and European firms had created. Before 2005, however, these generic drug firms pursued a strategy of finding cheaper ways to produce anti-retroviral drugs (ARVs), and selling them to purchasers for a fraction of the price. A first-line treatment of drugs combining Stavudine, Lamivudine and Nevirapine decreased from $10,439 per person per year in 2000, to $99 in 2007. This burst open the oligopolistic market in the pharmaceutical sector, which due to the high barriers of entry had only seven firms producing all the ARVs supplied until 2000. This also forced originator firms to embark on discounting programs for developing countries, albeit to protect their brand images. This price drop was a significant factor in extending coverage in sub-Saharan Africa by 800% in the two years to 2005, as reported by the WHO. However, toxicity, severe adverse effects and resistance to first-line treatments require a switch to a second-line regimen. This second line, covered by the post-2005 TRIPS regime, means firms cannot copy the drug, and countries in need are prevented from importing generics. Second-line medicines are four times more expensive than first line, and in countries that come under the Organisation Africaine de la Propriete Intellectuelle – altogether, 16 francophone countries – 10% of patients need to change treatment every year. Thus drug expenditure will increase by 250% just to maintain current access programmes. Without rapid price reduction for second line drugs, health programmes will have to choose between treating new or current patients. It is no surprise that patent-holding pharmaceutical companies are seen as saboteurs in the battle against HIV/AIDS.

Go to the original piece on Think Africa Press for more detailed discussion of the issues.

Also, see this British Medical Journal’s editorial on how India is currently negotiating away its production of generic drugs. According to the editorial, “In exchange for market access in other areas of the economy, the EU wants India, a country with very low per capita incomes, to embrace tough new rules on ownership and enforcement of intellectual property for medical inventions.”

I first read of land acquisition deals in Africa about two years ago.  It was between South Korea’s Daewoo and the Madagascar government, and the details included leasing the land for 99 years, mainly for farming. The produce was to be exported, but Daewoo promised to invest 6 billion dollars over a period of twenty years in port facilities etc etc. The deal eventually fell through, primarily because of a change in government in Madagascar. Other deals in other parts of Africa were subsequently finalised.

A report prepared by IFAD in 2009 says that there have been ‘significant levels of activities’. In the five study countries on which the report is based, the available data showed that ‘an overall total of 2,492,684 ha of approved land’ had been allocated between 2004 and 2009. For perspective, ‘that is almost half the arable land of the United Kingdom and three times the arable land of Norway.’ In Sudan and Ethiopia alone, over the same period, the figures are 3.9m and 1.2m ha respectively.

The main reasons given for land acquisition include food security (remember the high prices of food in 2008), and biofuel production (EU has biofuel consumption targets; plus oil prices were also crazy high in 2008). Now, it has turned out that there probably are other issues underlying the acquisition drives.

From a new report prepared by the World Bank and leaked to FT, it seems that speculation might be a reason for what has now been described as ‘land grabs’. Speculators acquire land at extremely low rates, hold it for a while and then sell it off later at a higher rate.

The more troubling issue is that investors are crowding out poor, local farmers and producers. From Guardian:

They [the report] argue that investors crowd out the poorest local producers and at the same time invest little in improving the agricultural processes needed to meet the huge jump in world food production required to feed a burgeoning population.

There are also issues concerning the targetting of countries with weak land governance. Still from Guardian:

“Investor interest is focused on countries with weak land governance,” the draft said. Although investment deals promised jobs and infrastructure “investors failed to follow through on their investment plans, in some cases after inflicting serious damage on the local resource base”.

I am actually not too surprised by this. Land issues are extremely difficult issues in much of Africa. I wrote a column for Business Day on this sometime last year.

My general reaction to this is that land deals do not necessarily have to be bad. If African governments could make deals that favour their countries there wouldn’t be much to worry about. Sadly, however, we know that it is often not the case. As a kind of solution, the World Bank report recommends a Land Transparency Initiative

modelled on the Extractive Industry Transparency Initiative, which commits governments, mainly in developing countries, to disclose revenues from oil and mining groups to improve transparency on the deals. Critics noted that eight years after its launch, only Liberia, Timor-Leste and Azerbaijan, were full members of the EITI. But the draft said: “By establishing a consistent format for reporting on land acquisition and monitoring [the] process over time, it could provide access to information sorely missing.

Although it is doubtful whether this will work, it seems to be the only suggestion on the table at the moment.

Another one to watch.

1. Is China a developing country?
2. Swedish think tank wants to clean up relief deliveries with a new ethical aid tool
3. Why cycling in Berlin is a dream
4. The corrupt reign of Emperor Silvio
5. Don’t cry for Wall Street
6. Towards a new world economy
7. Why some Egyptians are becoming vegetarians

Reuters: The bank expects economic expansion of 4.6 percent in 2011 and estimates the region grew by between 1.0 and 1.1 percent in 2009, said Andrew Burns, the bank’s manager of global macro economic trends.

“Recycling Textile Technologies”

A workshop to be held at the Department of Anthropology,
University College London,
on June 14th 2010

This interdisciplinary workshop will bring together researchers who work
on textile recycling, including anthropologists, geographers,
historians, political economists, designers, and materials scientists.
This is with a view to develop a research agenda that explores
innovation in textile recycling technologies in the widest sense, and
how these succeed or fail in becoming socially embedded. Textile
recycling activities, as socio-technical systems, arise in specific
cultural contexts within global trading patterns, and their study may
incorporate the underlying relationships between people and things, raw
materials and technologies and the emergence of entrepreneurs and
innovators in social networks amongst other (f)actors.

We see at least three possible clusters of themes emerging, but welcome
further ideas:

1. Reinventing Old Solutions to New Problems?

Industrial recycling practises are specific, historically situated
socio-technical systems. While pre-industrial papermaking industries
used rags as a source of raw materials, 19th century textile mills
looked to recycled clothing as a cheaper source of raw material for the
wool shoddy industries. In the 21st century, the problem has changed to
what to do with mountains of cast-off clothing, and this drives the
search for technologically solutions appropriate to diverse cultural
contexts. Anthropological understandings of technology embrace
materials, makers, designers, and users in a relational networks
including socio-economic, political, and legal factors. In this broader
context, how are some old technologies being reinvented for the future,
and in what fields are new technologies being successfully developed?

2. The value of knowledge and skills in cultural contexts

As different cultures have developed different somatic skills and
practices, we wish to investigate the importance of tacit knowledges to
recycling. Consideration of these embedded knowledges within the global
perspective raises a number of questions specific to the processing of
waste textiles. How are knowledge and skills valued differently within a
textile waste industry compared to primary production? How intimately do
you need to know used textiles in order to process them effectively, and
how do differing levels of entanglement affect your social status within
a recycling system? For those who are bodily engaged with waste, how
valuable are these tacit knowledges and are they acknowledged by others?
And what are the cultural specificities of the valuing of people and
skills within different textile waste sectors? For example, there are
differences in skills and status between an immigrant rag sorter in a UK
factory, an illiterate migrant woman cutting up rags in an Indian shoddy
factory and the designer creating eco-textiles from recycled materials.
Do these differences come down to a narrowing of knowledge domains? Are
these limitations the only factors affecting personal value ranking
within global systems?

3. Networks of global trade

Since at least the early 19thC rags have been globally traded for reuse
and recycling industries. Many rag businesses are family businesses that
have been trading for generations, and have nurtured valuable networks
of business contacts that span the developed and developing world in
both directions. The movement of second-hand textiles across the globe
both creates social relations and at the same time is enabled by
pre-existing social contacts. Why is it difficult to start up a new rag
trade business? A related question is what can waste do as an actor in
international trade? For example, how does the trade in second-hand
clothing and textile waste facilitate the movement of other goods along
similar networks? To what extent is textile waste trade a conduit for
other licit and illicit goods? How might the degrees of regulatory
frameworks surrounding waste enable or inhibit other flows of goods, and
is this conducive to it becoming the visible front for invisible
commodity exchange? Is this particular to textiles, to waste or raw
materials in general?

Please send abstracts of no more than 250 words by Feb 28th to:
Lucy Norris lucy.norris@ucl.ac.uk AND Julie Botticello
j.botticello@ucl.ac.uk
Department of Anthropology, UCL.

This workshop is being initiated as part of the ESRC project, the Waste
of the World
www.thewasteoftheworld.org

From a policy brief from the United Nations University: We have already witnessed over the past year brave and even imaginative efforts by many developing countries in order to cope. Developing countries with the largest and strongest economies, such as China, India and Brazil, have shown encouraging early signs of recovery after implementing timely countercyclical policies. In many African countries governments have been proactively attempting to protect their economies. In many (including Botswana, Mauritius and South Africa) governments have increased their expenditure. Ghana, facing a large budget deficit, is negotiating assistance from the IMF. Kenya and Tanzania are carefully monitoring their economies. The African Development Bank reacted quickly by identifying the most vulnerable countries and making emergency finances available. Many longterm investment projects in Africa, many in critical infrastructure, seem to remain in place.

The fact that many developing countries can now act in this way is quite in contrast to their actions during previous global recessions, such as those in the early 1980s, 1990s and in 1998. Then, developing countries, especially those in Africa, were much less well-managed. Deficits were high and reserves were low. Consequently, when global growth declined, these economies shrunk substantially. This time around, with a few exceptions, developing countries have, on average, had more leeway: deficits are lower and reserve holding is much better. In Asia, valuable lessons were learnt after the 1998 financial crisis, the actions Developing countries should not expect too much assistance from the rich world implemented in response to this have resulted in their economies becoming less vulnerable to financial shocks. Many countries here, such as China and South Korea, accumulated large foreign exchange reserves in order to insure themselves against such crises. While this reflects on an international financial system that is not trusted by developing countries, it does show that developing countries can and will act in their own best interests.

It also needs to be pointed out that improvements in macro-economic management in many developing countries have resulted in improvements in governance – including improvements in many African countries. These improvements, including more robust democracies; more frequent elections; initiatives to reduce corruption and end conflicts; and to empower women, are largely home-grown. It would be very difficult to argue that they were the outcome of Western aid or pressure. This means that better governance, which leads to better resilience in the case of financial and economic shocks, have most often been achieved without, or even in spite of, Western aid.

If this crisis can ever be said to have a positive outcome, it may be that of developing countries showing that they can and should manage by themselves and collaborate with regional institutions and the UN development system. They still are – and this is another lesson from the crisis – very dependent on global economic growth, but unlike in the past, the extent of the rest of the world’s, in particular the West’s, dependence on developing countries is also becoming abundantly clear. Demand in the West will be low and sluggish for years to come. Global growth depends now more than ever on growing demand in developing countries. The days of the USA as a ‘consumer of last resort’ (as described by Joseph Stiglitz) are over.

The full document [pdf] is here

It is ‘the study of how to get rich without knowing how’.

What must we do to end world poverty? At last, an answer: OK, that’s too good to be true. There has been a search for sixty years for the right answer. Now most economists confess ignorance how to raise the rate of economic growth — how to progress more rapidly towards development and the end of poverty.

To get out of this dead end, I would respond to this question with more questions.

First, who is “we”? It seems like whoever “we” are, “we” must have unconstrained power to implement “the answer”, so “we” sounds like authoritarian leaders (national autocrats or World Bank officials dictating conditions).

Second, are “we” going to allow poor people to choose their own paths? Of course not, because “we” already know the “right answer” for them.

So this question only makes sense in approach to development that is authoritarian and paternalistic, using Top Down Planning, which in fact has been the prevailing – but unsuccessful – approach to development for six decades.

The paradox of development economics is that Development does NOT require any one person (Expert, Leader, or Aid Official) to have a comprehensive understanding of how to achieve Development (sort of like how evolution managed to happen on its own before Darwin).

(I am drawing on a lecture I gave here at NYU.)

Why is it so hard to figure out how to raise growth? Nobel Laureate Friedrich Hayek once suggested a possible answer:

The growth of reason is based on existence of differences. . . . {between} individuals, possessing different knowledge and different views. [I]ts results cannot be predicted . . . . [W]e cannot know which views will assist this growth and which will not.

Growth is innovation, and you can’t know in advance how to do the innovative thing, or else it wouldn’t be an innovation. Development is BOTTOM-UP outcome of lots of unpredictable individual successes and failures.

But this is not a counsel of hopelessness; in fact, it means economists can still say lots of useful things. You want an environment that is favorable for “searchers:” the private and social entrepreneurs who figure out these innovations. You want to create as many opportunities as possible through comparative advantage, gains from trade, and gains from specialization. This means individual rights, property rights, and not too much interference with markets or free trade. Public goods like infrastructure, health, and education are necessary, but arise best in response to demand, not determined by bureaucratic supply. This means a democratically accountable government. Individual freedom and democracy also allows social entrepreneurs to flourish.

Institutions are necessary to make markets work, but institutions also evolve from the Bottom Up, with pro-market institutions arising from values like individualism, trust, and respect for others.

So the paradox of development economics is that it’s the study of how to get rich without knowing how. As Hayek put it:

It is because every individual knows so little and… because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it.

From the website of the School for Advanced Research on the Human Experience:

One six-month fellowship is available for a female social scientist from a developing nation, either pre- or post-doctoral, whose work addresses women’s economic and social empowerment in that nation. The goal of the program is twofold: to advance the scholarly careers of women social scientists from the developing world, and to support research that identifies causes of gender inequity in the developing world and that proposes practical solutions for promoting women’s economic and social empowerment.

In addition to a $4,500/month stipend and housing and office space on the SAR campus, the Campbell Fellow receives travel, shipping, and library resource funds; health insurance; and the support of a mentoring committee of established scholar-practitioners.

The following criteria guide SAR’s selection of the Campbell Fellow:

• Citizenship: Applicants may not be U.S. citizens or permanent residents and must be a national of a developing country that is currently eligible to borrow from the World Bank.
• Academic Discipline: Applicants should be pursuing research in one of the social sciences: anthropology, economics, education, geography, history, law, linguistics, political science, psychology, social work, or sociology, or in an interdisciplinary field that incorporates two or more of these disciplines.
• Research Topic: Projects that identify causes of and/or solutions to gender inequity in the developing world, and thus contribute to women’s social and economic empowerment, will be favored. Sample topics include education and socialization of girls; globalization and the economic status of women; policies and practices toward family, reproduction, and women’s health; impacts of international and civil conflict on women; women’s roles in resolving such conflicts or sustaining civil society; media representations of women and the formation of ideologies of gender; the practice and process of gender-based development; and women in science and technology. SAR will select fellows on the strength of their clearly stated intention to serve their communities and countries of origin.
• English Fluency: To facilitate full engagement in the SAR intellectual community, applicants must demonstrate their fluency in English, such as through their record of professional interaction in written and spoken English.

Applications to the Resident Scholar Program are due on November 1st of each year. This fellowship is made possible through the generous support of the Vera R. Campbell Foundation.

The current issue of The Economist has this in a leader about mobile money in Africa:

ONCE the toys of rich yuppies, mobile phones have evolved in a few short years to become tools of economic empowerment for the world’s poorest people. These phones compensate for inadequate infrastructure, such as bad roads and slow postal services, allowing information to move more freely, making markets more efficient and unleashing entrepreneurship. All this has a direct impact on economic growth: an extra ten phones per 100 people in a typical developing country boosts GDP growth by 0.8 percentage points, according to the World Bank. More than 4 billion handsets are now in use worldwide, three-quarters of them in the developing world (see our special report). Even in Africa, four in ten people now have a mobile phone.

With such phones now so commonplace, a new opportunity beckons: mobile money, which allows cash to travel as quickly as a text message. Across the developing world, corner shops are where people buy vouchers to top up their calling credit. Mobile-money services allow these small retailers to act rather like bank branches. They can take your cash, and (by sending a special kind of text message) credit it to your mobile-money account. You can then transfer money (again, via text message) to other registered users, who can withdraw it by visiting their own local corner shops. You can even send money to people who are not registered users; they receive a text message with a code that can be redeemed for cash.ve a text message with a code that can be redeemed for cash.

Also check out their special report on mobiles in Africa

1. Is economics as a subject of study still attractive?

2. Is there a role for industrial policy in the developing world?

3. A collection of links to articles on What’s Wrong with Macroeconomics?

4. Financial crisis in Africa? Dr. Okonjo Iweala of the World Bank presents an analysis

5. Joseph Stiglitz on GDP fetishism

And, Bride-to-Be Throws Tantrum After Dress Disappears.