Combating international tax avoidance and evasion, corruption and weak governance are crucial if Africa's people are to benefit from the continent's vast natural resource wealth, according to former United Nations secretary general and chair of the African Progress Panel Kofi Annan. He pointed out that trade mispricing, or losses associated with the misrepresentation of export and import values, alongside other illicit outflows cost the continent $38.4-billion and $25-billion respectively between 2008 and 2010. Annan called for a rule-based global system on tax transparency to be developed with the G20. All foreign-owned companies should be required to disclose the ultimate beneficiaries of their profits, he said. Switzerland, the UK and the US – all major conduits – should also signal their intent to clamp down on illicit financial flows. He extended this call to players from other developing nations who have become increasingly active in Africa in the oil, gas and minerals realm. Annan called on major investors in African extractive sectors such as China and emerging investors such as Brazil to also engage. He raised concerns over the structure of investment activity by foreign companies operating in Africa, which is characterised by the extensive use of offshore-registered companies and low tax jurisdictions, and in some cases the complex use of shell corporations.
Health equity in economic and trade policies
This year’s Africa Progress Report rejects the view that Africa is blighted by a “resource curse” – an affliction that automatically consigns the citizens of resource-rich nations to a future of economic stagnation, poverty and poor governance. Instead, the Panel argues that the malaise that has afflicted natural resource management in Africa is caused by the wrong domestic policies, weak investment partnerships and failures in international cooperation. This will require decisive leadership by African governments, backed by multilateral action and a commitment by foreign investors to adopt best international practices. There is cause for optimism. Global market conditions point to another decade of high prices for natural resources, creating an environment conducive to economic growth. The report argues that improvements in policies, in public finance management and moves towards greater accountability enables Africa to escape the boom-bust cycle associated with past upswings in commodity markets.
The World Health Organisation (WHO) is involved in a debate related to intellectual property rights over a dangerous new pathogen, the Middle East Respiratory Syndrome (MERS) virus. This report records that the virus was sent to Erasmus without authorisation of the Saudi government, which has sovereign rights, and which has criticised Erasmus' intellectual property stance. When Erasmus eventually began sharing the virus, they did so under a material transfer agreement (MTA) with very strong provisions to protect the university’s own intellectual property, prompting objections from some scientists. Erasmus is reported to have submitted a patent application the content of which is unknown, due to normal procedures at patent offices where publication of applications is delayed for six months or more from the time of their submission. The raising of patent and sovereignty issues over emerging viruses at the World Health Assembly suggests that controversies caused by intellectual property claims over newly identified pathogens will continue to occur unless broader solutions are found to allow viruses to be distributed to researchers while protecting sovereign rights, the author concludes.
The TRIPS Council of the World Trade Organisation (WTO) decided on 11 June 2013 to allow Least Developed Countries (LDCs) to delay implementation of the TRIPS Agreement until 1 July 2021. At the end of this period, LDCs can request further extension. The terms of the June 2013 decision this time are better than the terms in the previous extension, granted in 2005, says South Centre. This is attributed to the determination and skill of the LDC Group, led by Nepal, during month long negotiations between the LDC Group and developed country members of the WTO. The new extension period is for eight years, starting on 1 July 2013. This is longer than the seven and a half years transition period provided in the 2005 decision. It is also significantly below what the LDC Group had asked for in its formal proposal IP/C/W/583, in which the Group had requested that the transition period should last so long as the country remains an LDC. The 11 June 2013 decision has also removed the condition introduced in the earlier 2005 decision that LDCs cannot roll-back the level of implementation of the TRIPS agreement that they have already undertaken in their national legislation.
This paper highlights the importance of bridging the gap between the extractive sector and productive value chains in Africa in order to foster sustainable transformation and development. In particular, the author stresses the importance of and industrial policy that promotes links between the extractive sector and agriculture and that identifies areas where extractive industries can contribute to value added production.
The inequality debate, the idea of ’trickle-down’ – that the poor can be made less poor if the rich become richer, as this will increase demand for goods produced by the poor – is argued by the author to have failed at the global level, just as it failed at the country level. The current model of globalization is creating a global economy which systematically excludes most of the global poor. The author raises that to accelerate progress in reducing poverty after 2015 – and especially to have some hope of eradicating poverty in a meaningful sense in a period of decades rather than centuries – this needs to change. We need to shift from a model premised on the unrealistic assumption that the economic benefits of growth will automatically trickle down to the poor to one where the considerable economic benefits of poverty reduction and eradication will bubble up to the rest of the economy. This means focusing economic policy on poverty reduction, not growth, particularly in rural areas, where poverty is greatest. The author suggests options for doing this, in public works, cash transfers, income generation, rural electrification and public health and educational services. In most countries, this would require substantial improvements in tax systems, and an increase in tax collection capacity, which would itself be costly.
The landmark decision by the Indian Supreme Court in Delhi to uphold India's Patents Act in the face of a seven-year challenge by Swiss pharmaceutical company Novartis is a major victory for patients' access to affordable medicines in developing countries, according to Médecins Sans Frontières (MSF). The court ruling was made on 1 April 2013 in the face of a seven-year legal battle with the pharmaceutical manufacturer. Novartis first took the Indian government to court in 2006 over its 2005 Patents Act because it wanted a more extensive granting of patent protection for its products than what was offered by Indian law. In a first case before the High Court in Chennai, Novartis claimed that the act did not meet rules set down by the World Trade Organisation and was in violation of the Indian constitution. Novartis lost this case in 2007, but launched a subsequent appeal before the Supreme Court in a bid to weaken the interpretation of the law and empty it of substance. Instead of seeking to abuse the patent system by bending the rules and claiming ever-longer patent protection on older medicines, MSF calls on the pharmaceutical industry to focus on real innovation, and governments should develop a framework that allows for medicines to be developed in a way that also allows for affordable access.
Much has been said in the media about the health innovation and access to medicines impact of the recent decision of the Indian Supreme Court (SC) in the Novartis case. But there are broader implications, argues the author of this article. The ruling is also a revealing tale about the changing role of developing countries in the global intellectual property landscape and the growing influence of the judiciary in these countries in the implementation of international intellectual property rules. The worldwide attention received by the Indian SC ruling and its global implications could represent a turning point, as the Novartis judgment marks the first time that a decision by a judicial authority from a developing country in the area of intellectual property has been so closely scrutinised and so extensively commented upon internationally. The Novartis decision might be spearheading a world where judicial decisions from countries such as China, India and Brazil have an increasing global reach and contribute to shaping global approaches to intellectual property. It is also more generally reflective of the growing assertiveness of developing countries, particularly emerging economies, in the current global intellectual property landscape. However, the author cautions that only the future will tell us is if such a choice is ‘exceptional’ as it touches the highly sensitive issue of drugs affordability – which is of great political and social concern in India – or if it is signalling a broader trend.
The request by least developed countries (LDCs) to push back the date on which they would have to enforce intellectual property rules under the World Trade Organisation (WTO) is the subject of ongoing informal consultations between delegations, as the deadline is fast approaching. Particularly at stake is the time period of the extension, which developed countries would prefer to be limited. Although a large consensus has emerged to grant an extension to LDCs for complying with TRIPS, developed countries voiced their preference for a time-limited extension at the WTO’s March 2013 meeting. Another problem for developing countries is the so-called “no roll-back clause,” which seeks to ensure that if LDCs have granted intellectual property protection to some products, they cannot go back on this decision. LDCs consider this clause as a hindrance to their ability to use policy space. A delegate from an LDC country said that it is important that the extension be awarded as long as a country remains an LDC because many LDCs do not have a technological base. Without that technological base, LDCs would not be able to benefit from intellectual property protection, which might actually hinder their development.
South Africa plans to overhaul its intellectual property laws to improve access to cheaper medicines by making it harder for pharmaceutical firms to register and roll-over patents for drugs, according to the Department of Trade and Industry (DTI). Central to the reforms is closing a loophole known as "ever-greening", whereby drug companies slightly modify an existing drug whose patent is about to expire and then claim it is a new drug, thereby extending its patent protection and their profits. If approved by parliament, the changes should mean cheaper medication for cancer and HIV and AIDS in South Africa. DTI said its policy position was to ensure a strong system that will not grant easy patents, arguing that granting easy patents would open the door for extensions on the original patent. South Africa's position was supported this month by a ruling from India's top court that dismissed an application by Swiss drugmaker Novartis to win patent protection for its Glivec cancer drug. Lobby groups such as Doctors Without Borders (MSF) want South Africa to follow India's example and add a specific clause preventing companies from gaining patents on existing drugs, in a move that would help generic drug manufacturers.