Friday, January 14, 2005

How the CIA sees the world in 2020

Here is the Report of the National Intelligence Council's 2020 Project. Not a bad job, although I noticed right away they aren't even consistent about PPP vs nominal FX rates when estimating the sizes of economies or standards of living.

Some interesting excerpts:
"...Asia will alter the rules of the globalizing process.  By having the fastest-growing consumer markets, more firms becoming world-class multinationals, and greater S&T stature, Asia looks set to displace Western countries as the focus for international economic dynamism—provided Asia’s rapid economic growth continues."

"The number of US engineering graduates peaked in 1985 and is presently down 20 percent from that level; the percentage of US undergraduates taking engineering is the second lowest of all developed countries.  China graduates approximately three times as many engineering students as the United States.  However, post-9/11 security concerns have made it harder to attract incoming foreign students and, in some cases, foreign nationals available to work for US firms.b  Non-US universities—for which a US visa is not required—are attempting to exploit the situation and bolster their strength." 

46 comments:

Anonymous said...

Inconsistency about PPP vs nominal FX rates when estimating the sizes of economies or standards of living has always been one of my pet peeves in such reporting.

Regarding the second excerpt, I am sure all have read the recent NYT article on the decline of foreign student enrollments.

"U.S. Slips in Attracting the World's Best Students

By SAM DILLON (NYT) 1906 words
Late Edition - Final , Section A , Page 1 , Column 2 "

What is noticeable is the 50% drop in people taking the GRE from India (and similar from China) over the last two years! I believe the overall number coming from India is about the same as before (definite drop from China), but I am not sure about the 'quality'.

Plus, how many of them are staying and enriching the US economy? Anectodal evidence suggests to me that a significantly larger fraction of foreign students are going back to their native countries, compared to the situation 15 years ago. But I do not have the numbers...

MFA

Anonymous said...

http://www.nytimes.com/2005/01/14/business/worldbusiness/14yuan.html?pagewanted=all&position=

A Chinese Revaluation May Not Help U.S.
By KEITH BRADSHER

GUANGZHOU, China - Nearly the size of an old station wagon, a bright orange machine here mashes plastic pellets into rows of six-inch-long blue clips for hospitals across the United States. Pan Guotao, a 29-year-old worker from a village in northern China, sits on a plastic stool next to the machine and wields a straight razor to slice apart the clips, which are used to hold ice packs in plastic sleeves.

It looks like a simple operation, but it lies at the heart of the American trade deficit with China.

Anne

Anonymous said...

http://www.nytimes.com/2005/01/13/business/worldbusiness/13oil.html

China Goes Beyond Oil in Forging Ties to Persian Gulf
By BORZOU DARAGAHI

BAGHDAD - Lured by the world's largest oil reserves and some markets considered too risky by Western companies, China is quickly becoming a major economic player in the Persian Gulf, making deals in transportation and technology, showcasing its consumer goods and shoring up agreements to meet its enormous energy needs.

'The current state of business ties between China and the gulf states is definitely growing, with an interest from both sides to expand ties,' said Christian Koch, program director at the Gulf Research Center, an independent institute based in the United Arab Emirates. 'Oil is certainly the most central aspect to the relations, but ties should not be seen exclusively through that prism.'

Anne

Anonymous said...

http://www.metmuseum.org/toah/hd/rvd_d/ho_1999.222.htm

Portrait of Nicolas Trigault in Chinese Costume
Peter Paul Rubens (Flemish, 1577–1640)

Thought you would enjoy this :)

Anonymous said...

http://www.nytimes.com/2005/01/14/business/14norris.html

U.S. Tech Exports Slide, but Trash Sales Are Up
By Floyd Norris

Who says the United States cannot compete? Trade statistics may indicate the country is slipping in technology, but we're still tops in trash.

In the late 1990's, those who counseled Americans not to be worried about the growing trade deficit pointed to "advanced technology products" - a category tracked by the government that reflects what it calls leading-edge technologies. The United States was running a sizable trade surplus in that area, and shipments of those products were rising much more rapidly than other exports.

All that has changed. In November, the United States had a record trade deficit of $5.8 billion in advanced technology products. For the most recent 12 months, the deficit was $36.9 billion, also a record.

And where is the strength? The trade surplus in what the government calls "scrap and waste" is rising.

Anonymous said...

Anne forgets to sign incessently, thinking she is already known :) Ha.

Anonymous said...

tp://www.nytimes.com/2005/01/14/arts/music/14cond.html?pagewanted=all&position=

Call Me Madame Maestro
By BLAIR TINDALL

THE road to conducting one of the world's great orchestras could have been arduous for a 4-year-old girl beginning to learn music on a homemade piano in Dandong, China, in 1977. But because of the pioneering examples set by female conductors in China at that time, Xian Zhang, now 31 and the assistant conductor of the New York Philharmonic, could look to a solid lineage of women for inspiration.

"My teacher at the Central Conservatory was female," she said of Wu Ling Fen, who also had studied with a woman. "That makes me the third generation of female conductors in China."

Ms. Zhang, who came to the United States in 1998, was a winner of the 2002 Maazel-Vilar Conductors' Competition. A confident, articulate young woman, she spoke passionately about training with her mentor Lorin Maazel and working with the Philharmonic - an orchestra she described as exceptionally professional and supportive.

After warming up her crisp yet fluid baton technique with a children's concert in December, she made her subscription concert debut with the Philharmonic on Wednesday. In the first of four concerts shared with Mr. Maazel, she led Benjamin Britten's "Four Sea Interludes" from "Peter Grimes" and the world premiere of Mark-Anthony Turnage's "Scherzoid," a Philharmonic commission.

Anne

Anonymous said...

tp://www.nytimes.com/2005/01/14/arts/music/14cond.html?pagewanted=all&position=

Call Me Madame Maestro
By BLAIR TINDALL

THE road to conducting one of the world's great orchestras could have been arduous for a 4-year-old girl beginning to learn music on a homemade piano in Dandong, China, in 1977. But because of the pioneering examples set by female conductors in China at that time, Xian Zhang, now 31 and the assistant conductor of the New York Philharmonic, could look to a solid lineage of women for inspiration.

"My teacher at the Central Conservatory was female," she said of Wu Ling Fen, who also had studied with a woman. "That makes me the third generation of female conductors in China."

Ms. Zhang, who came to the United States in 1998, was a winner of the 2002 Maazel-Vilar Conductors' Competition. A confident, articulate young woman, she spoke passionately about training with her mentor Lorin Maazel and working with the Philharmonic - an orchestra she described as exceptionally professional and supportive.

After warming up her crisp yet fluid baton technique with a children's concert in December, she made her subscription concert debut with the Philharmonic on Wednesday. In the first of four concerts shared with Mr. Maazel, she led Benjamin Britten's "Four Sea Interludes" from "Peter Grimes" and the world premiere of Mark-Anthony Turnage's "Scherzoid," a Philharmonic commission.

Anne

Anonymous said...

Darn, darn, I hit publish twice. That is what comes of signing my signing my name. But, notice a Chinese conductor who as a girl was inspired by women conductors in China. Would you have thought the girls in China in 1977 might be inspired in the arts by other women :)

Anne

Anonymous said...

Very interesting articles.

Personally, I (and I think many Indians) greatly envy the progress made by/in China. Bad economic policies, a result of the colonial experience, were of course a major reason for India to lag behind.

Another reason, I think, is that India is really a multi-ethnic country (with more religions and languages than EU, for example), and so progress is a lot slower. But as Richard Nixon once put it, those who complain about India being governed badly should wonder that it is governed at all!

Another factor is (was?) the lack of the American "can do" attitude (not simply privatization). Earlier, a lot of people who were enterprising simply emigrated. Now people in India are more self-confident, inspired, I think, by the Chinese (who seem to have overcome some of their own inferiority complexes vis-a-vis the West).


To quote Robert Lucas: "Once one starts to think about economic growth it is hard to think of anything else." The current dynamism in Asia is wonderful to see. I never though we would see so much in such a short time, certainly in my lifetime. Who says economics is a dismal science? :)

MFA

Anonymous said...

"The current dynamism in Asia is wonderful to see. I never though we would see so much in such a short time, certainly in my lifetime. Who says economics is a dismal science? :)"

Nice. Though I am finding more of a focus on China just now, India strikes me as no less interesting and impressively developing and no less a model China must attend to. But, I must make of point of paying more attention to India.

Anonymous said...

MFA

All your comments on India and Indian experiences will teach me much. Time for me to learn more about the arts in India.

Anne

Anonymous said...

http://www.nytimes.com/2005/01/15/international/asia/15china.html?pagewanted=all&position=

China Promotes Another Boom: Nuclear Power
By HOWARD W. FRENCH

DAYA BAY, China - The view from this remote point by the sea, with lines of misty mountains stretching into the distance, is worthy of a classical Chinese painting. In the foreground, though, sits a less obvious attraction: one of China's first nuclear power reactors, and just behind it, another being rushed toward completion.

There are countless ways to show how China is climbing the world's economic ladder, hurdling developed countries in its path, but few are more pronounced than the country's rush into nuclear energy - a technology that for environmental, safety and economic reasons most of the world has put on hold.

In its anxiety to satisfy its seemingly bottomless demand for electricity, China plans to build reactors on a scale and pace comparable to the most ambitious nuclear energy programs the world has ever seen.

Current plans - conservative ones, in the estimation of some people involved in China's nuclear energy program - call for new reactors to be commissioned at a rate of nearly two a year between now and 2020, a pace that experts say is comparable to the peak of the United States' nuclear energy push in the 1970's....

Anne

Anonymous said...

Certainly the infrastructure development advocacy and support by the Chinese government brings to mind the periodic massive American programs of 150 years.

Anne

Anonymous said...

http://www.j-bradford-delong.net/movable_type/2005-3_archives/000166.html#comments

Tim Geithner Worries...
Greg Ip reports:

WSJ.com - Fed Member Cites Risks to Economy: In a speech yesterday, Timothy Geithner, president of the Federal Reserve Bank of New York, said markets have priced in a very optimistic outlook for the U.S. and world economies. But he said there are many risks to this outlook, which makes it all the more important that the Fed keep inflation low and the federal government rein in its budget deficit....

But Mr. Geithner said the risks to this positive outlook include: rapid growth in government debt in the U.S. and other countries; 'unprecedented' external imbalances, in particular the large U.S. trade deficit; and -- in an apparent reference to China -- some countries' use of fixed exchange rates that interfere with the resolution of those imbalances. China pegs its currency at what critics say is an artificially low level to the dollar, enabling it to run a large and growing trade surplus with the U.S.

Anne

Anonymous said...

Silas sends home money to support parents and brother and sister. The money is sent to Nigeria, along with funds from many Nigerians living abroad. Now in Nigeria there is a surplus of saving, so Nigerians in turn invest in America or Europe or South Africa. How is the Nigerian government to encourage more domestic investment?

Anne

Anonymous said...

Were we fairly wealthy in Nigeria or Chile or Indonesia we might invest at home, but we would at least as readily invest abroad to diversify and protect assets. The Australian economy is a lot more sound than the Indonesian, and building in Australia makes sense for Indonesians. Then when I think about how important it is for China to assure domestic investment flows, I can understand the reason for capital controls and why attracting international investment for export industries seems so important. Keep potential investment money in China and attract all the international capital possible.

Anne

Anonymous said...

Were we reasonably wealthy and living in Hong Kong in 1997, we would have made sure we had substantial assets and the right to residency in Canada or Australia or America or England. Protecting assets in many countries seems to me to lead to investing in the most developed economies. Real estate has been a remarkably sound investment in developed countries despite cyclical swings. Why should we be surprised that capital flows from developing economies? The need is to find ways for developing economies to attract capital as India and China especially have.

Anne

steve said...

It isn't surprising that capital flows from developing to developed countries. "Developing" in most (not all) cases means that legal and financial systems are not reliable, and that those with capital might find a better risk-adjusted return in a developed economy.

What is disturbing about current capital flows is that Asians are buying our debt more than they are investing in our country.

Perhaps there is a Modigliani-Miller theorem on this, to the effect that in an efficient market it doesn't matter whether foreigners buy our debt instead of our equities or property. But I myself am dubious...

Anonymous said...

Yes, yes. There is a difference in buying debt and directly investing, and directly investing would surely be better for us and done knowledgeably better for Asians.

Anne

Anonymous said...

MFA

There seemm so many ways in which India and China model for each other currently that I find no reason not to be realistically optimistic for both growth paths.

Anne

Anonymous said...

http://www.nytimes.com/2005/01/17/business/worldbusiness/17oil.html

Alert to Gains by China, India Is Making Energy Deals
By KEITH BRADSHER

NEW DELHI - India's prime minister warned on Sunday that China had moved ahead in securing worldwide oil and natural gas supplies, the bluntest expression yet of energy worries among Indian leaders. In the last two weeks, they have pursued a series of energy deals that have surprised global markets.

"I find China ahead of us in planning for the future in the field of energy security," Prime Minister Manmohan Singh said in a speech here at the convention of India's oil and gas industry. "We can no longer be complacent and must learn to think strategically, to think ahead, and to act swiftly and decisively."

Like China, India has a fast-growing economy but stagnant domestic oil production, which has led to a rapid rise in energy imports, at a cost that has soared with high oil prices.

Indeed, India has become even more dependent than China on volatile producing countries in the Middle East, buying nearly three-quarters of its oil from them now, compared with less than half a decade ago.

Government-owned Chinese oil companies have been busy in the last two years buying large stakes in gas fields in Indonesia and Australia and exploring possible investments in American and Canadian energy companies. After staying relatively quiet until recently, Indian companies, also government controlled, have completed their own agreements in recent days.

Anne

Anonymous said...

Notice that India and China can model for each other, and this can be healthy for each country.

Anne

Anonymous said...

Paying for the Past in 2005
By Joseph E. Stiglitz

"High oil prices are a drain on America, Europe, Japan, and other oil importing countries. The increase in America’s oil import bill over the past year alone is estimated to be some $75 billion. The effect is just like a huge tax that transfers wealth to the oil-exporting countries.

"If there were any assurance that prices would remain permanently above even $40 a barrel, alternative energy sources (including shale oil) would be developed. But we are now in the worst of all possible worlds—prices so high that they are damaging the global economy, but uncertainty so severe that the investments needed to bring prices down are not being made."

Anne

Anonymous said...

http://www.nytimes.com/2005/01/16/magazine/16SOCIAL.html?oref=login&pagewanted=all&position=

A Question of Numbers

Since the establishment of Social Security in 1935, government actuaries have been crunching data and projecting the future of the system. Why don't they see a crisis looming?

http://www.nytimes.com/2005/01/16/magazine/16TAXES.html?pagewanted=all&position=

Breaking the Code

Deftly, year by year, step by step, the Bush administration has been reinventing the American system of taxation. And the story of this revolution is not over.

Excellent in-depth articles....

Anne

Anonymous said...

American investment in energy efficieny and production may be too limited, but is energy investment in China and India too limited or solely limited to assuring diverse supply alternatives? What of energy efficiency in China and India? Europe at least has pushed hard for more energy efficiency, but I wonder even about Japan in recent years.

Anne

Anonymous said...

An aisde:

The director of endowment investing at Harvard is leaving after a most successful 15 years. But, why should there not have been a successful 15 years of investing by an intelligent manager? Why are a number of private and public pension funds in difficulty? How much is difficulty?

Since 1976, the return on the Vanguard S&P Index Fund has been 12.4% a year. How is it possible that pension fund investments in stock for 10 or 20 or 30 years could not have been a roaring success unless the management of the investments was inept?

Anne

steve said...

Anne,

The Harvard Management Company vastly outperformed the large indexes in the last decade or so. We are talking returns in excess of 20%. They were also very early into commodities (timber!) and other investments that did very well. Even their fixed income group had unbelievable returns lately. You can find the data in the Chronicle of Higher Ed, or in the Times articles a year ago in which various (stupid, in my view) alums expressed dismay over the managers' compensation.

HMC was/is the equivalent of a very high caliber hedge fund, and they were getting their managers for about half the market rate of compensation. There is no free lunch - if you believe in active management, then you have to pay for the investment talent capable of achieving outperformance.

Also, this wasn't a case of great stock pickers beating indexes (although there was probably some of that) - these guys had expertise to find unusual asset classes (in possibly inefficient markets) that would perform well. You have to pay for that expertise.

Anonymous said...

Anne,

Your viewpoints are very interesting and wise. (though I have a hard time keeping up with you!) Regarding India, you might find the Nobel economist Amartya Sen's writings quite interesting.

(example http://www.nybooks.com/articles/17608
Passage to China
By Amartya Sen )

Regarding energy efficiency, I think China had an explicit policy that car models made/sold in China from 2005 on have to meet European standards. Their consideration is energy independence/security. No idea how close they are to actually implementing it. Sadly, I do not think India has a similar policy.

I was a lot more pessimistic about India when I first left the country (almost two decades ago). I think when one is immersed in a society/culture, one sees a lot of the problems "up close and personal" and despairs, and one often loses sight of the bigger picture. I think too much historical and cultural baggage (like in India) is often a hindrance than help. Plus, I failed to understand the destructive power of bad economic ideas.

Now I am more optimistic. When one sees more than one country (better still civilization), one realizes there are failings everywhere (ok, I am sounding old now :)). Also, criterion for happiness/fulfillment at individual and societal levels is not a "universal value" (ex: Europe and US have chosen different public health care policies).

MFA

Anonymous said...

Steve

I do agree. What the Harvard managers did with asset allocation was terrific, from resource purchase to buying emerging market bonds. You will not find me complaining about Harvard's endowment management :) What puzzles me, is why we find case on case of pension fund managers making miserable returns when the last 30 years have been so fine for returns simply from stock or bond indexing.

Anne

Anonymous said...

MFA

Amartya Sen is wonderful, and I have read and listened to him often and will continue to do so. I will pay closer attention from here to comments by you and others on Indian culture.

Anne

Anonymous said...

http://www.nytimes.com/2005/01/18/business/worldbusiness/18hainan.html?pagewanted=all&position=

China's Latest Capitalist Beachhead
By DAVID BARBOZA

SANYA, China - China's leaders once tapped Hainan, this small sunny island off the southern coast of China, to be one of five experimental laboratories for capitalism. Hainan was supposed to compete to become a new Hong Kong, even a future Singapore.

But more than a decade later, even as China's hot economy bubbles over with success in places like Shanghai and Shenzhen, Hainan is, well, still an experiment, like a lone laggard.

It seems as though this place, despite its postcard-perfect views and year-round summer sheen, might be called one of China's earliest glitches on the road to capitalism, an isolated patch of somewhat undeveloped land that had once captured leadership attention, wads of cash and many talented Chinese wanting to strike it rich.

'The early 1990's experiment in Hainan was a failure,' said Li Renjun, a professor of economics at Hainan University in Haikou, on the north coast of the island. 'It has taken Hainan almost 10 years to recover from that failure.'

The vast sums of capital that flowed into Hainan never built factories or brought migrant workers to its shores, experts say. Instead, they mostly lured speculators, real estate developers and financiers - many of whom dashed away when things began to collapse in the mid-1990's.

But now Hainan is hoping to be reborn as a different sort of place; optimists here like to call it the next Hawaii.

Anne

Anonymous said...

http://www.nytimes.com/2005/01/16/weekinreview/16china.html

It's Just Business, Nothing Geopolitical
By KEITH BRADSHER

HONG KONG — Shut up and keep buying.

Few countries are benefiting as much as China these days from the international status quo - and Beijing knows it. So, as American criticisms of China have shifted from human rights to the value of its currency and the aggressiveness of its trade practices, Chinese leaders have tried hard to keep the peace while exporting ever more.

China's economy is doubling in size every 10 years, and personal incomes have been climbing steeply, especially in the cities. Trade with the United States plays a huge role in that growth, as investors around the world pour money into Chinese factories that make goods destined mainly for the American market....

Anne

Anonymous said...

http://www.nytimes.com/2005/01/17/international/asia/17zhao.html?pagewanted=all&position=

Chinese Leader Purged for Supporting Tiananmen Protesters Dies at 85
By JIM YARDLEY

BEIJING, Monday - Zhao Ziyang, the former general secretary of China's Communist Party who was stripped of power for supporting the students during their 1989 pro-democracy Tiananmen Square protests, died in a Beijing hospital on Monday, his family said. He was 85, and had been in a coma since Friday after suffering a series of strokes.

For the past 15 years, Mr. Zhao had lived under house arrest not far from the government offices where he once led China.

During his long confinement, he had become a powerful symbol for those Chinese who believe the government must reassess its bloody crackdown at Tiananmen. He blamed top leaders for ordering the military assault, and he refused to embrace the official line that the demonstrations had been a "counter-revolutionary rebellion."

In what would be his last public appearance, Mr. Zhao visited students at Tiananmen on May 19, 1989. He pleaded with them to leave, apologized for having arrived "too late," and warned that the authorities were planning to remove them. It is now clear that Mr. Zhao made the visit directly after being fired by China's Politburo.

Martial law was announced the next day in a prelude to the crackdown on June 3-4, when soldiers fired on protesters throughout Beijing, killing hundreds, possibly more. Mr. Zhao's visit to Tiananmen was also notable for the dazed-looking aide, captured in a famous photograph, who accompanied him: Wen Jiabao, now China's prime minister.

Anne

Anonymous said...

Aside:

Going back to the post on "Extreme Male Minds," would that include my dear Lawrence Summers? What is it about such biological conceits, or is that part of the male genetic structuring? Oh well :)

Anne

Anonymous said...

Harvard Chief Defends His Talk on Women
By SAM DILLON - NYTimes

Lawrence Summers stood by comments he made suggesting that gender differences may explain why fewer women succeed in science and math careers.

Anne

Anonymous said...

http://www.nytimes.com/2005/01/18/opinion/18tues2.html

India's Choice

For an AIDS patient in a poor country lucky enough to get antiretroviral treatment, chances are that the pills that stave off death come from India. Generic knockoffs of AIDS drugs made by Indian manufacturers - now treating patients in 200 countries - have brought the price of antiretroviral therapy down to $140 a year from $12,000.

That luck may soon run out. India has become the world's supplier of cheap AIDS drugs because it has the necessary raw materials and a thriving and sophisticated copycat drug industry made possible by laws that grant patents to the process of making medicines, rather than to the drugs themselves. But when India signed the World Trade Organization's agreement on intellectual property in 1994, it was required to institute patents on products by Jan. 1, 2005. These rules have little to do with free trade and more to do with the lobbying power of the American and European pharmaceutical industries.

India's government has issued rules that will effectively end the copycat industry for newer drugs. For the world's poor, this will be a double hit - cutting off the supply of affordable medicines and removing the generic competition that drives down the cost of brand-name drugs.

But there is still a chance to fix the flaws in these rules, because they are contained in a decree that must be approved by Parliament. Heavily influenced by multinational and Indian drug makers eager to sell patented medicines to India's huge middle class, the decree is so tilted toward the pharmaceutical industry that it does not even take advantage of rights countries enjoy under the W.T.O. to protect public health.

Anne

Anonymous said...

Steve and MFA

Do consider carefully the New York Times editorial on the proposed change in India's drug manufacture laws. Now here is indeed a profound ethical question in what should and should not be limits to sharing intellectual property as the property is amassed at increasingly different rates in richer and poorer countries.

Anne

Anonymous said...

Steve and MFA

Let us consider carefully the New York Times editorial on the proposed change in India's drug manufacture laws. Several times I argued with John Rawls and Lawrence Kohlberg that setting ethical problems in rich and poor countries would provoke different solutions. Kohlberg would ask whether we might steal a drug to save someone dear to us were we too poor to afford the drug. I was always struck by the ethical choice not applying to people for whom life saving drugs were beyond stealing. What of southern Africa? Now here is indeed a profound ethical question in what should and should not be limits to sharing intellectual property as the property is amassed at increasingly different rates in richer and poorer countries.

Anne

steve said...

Anne,

Summers raised a stink, although I don't feel his underlying scientific point (that the distribution of cognitive abilities might be different between men and women) is necessarily wrong. However, it is very plausible that societal factors (i.e., gender role expectations, subtle discrimination), which we can actually do something about, have as large or larger effect on the number of women in science in technology.

Regarding IP and developing countries, I don't feel there is any ethical reason for developing countries to follow IP conventions established by developed countries. There may be practical reasons for them not to flout these conventions, but in principle they should do what is best for their own people. The harder question (which I think you focused on) is what our responsibilities are here.

Should US companies just donate their IP rights to developing countries, so that cheap drugs can be made available there? How is this different from my urging GM to make cars available at cost in Africa? Or urging Steve Jobs to donate some of his iPod revenues to famine relief? Are they unethical for saying no?

Anonymous said...

Anne and Steve,

I have to think harder about it.

I think the patents in medicine are sometimes not reliable. Often, there is bio-piracy, which unless a country is strong enough, it is hard fight against.

Two (old) examples:
http://www.atimes.com/ind-pak/AI17Df01.html

Biopiracy-friendly laws worry neem battle winner
By Ranjit Dev Raj

NEW DELHI - A prominent Indian intellectual rights campaigner who successfully battled to have European patents to a transnational corporation (TNC) for pesticides from the neem tree revoked, says the battle against biopiracy must begin at home.

Vandana Shiva, leader of the ''Neem Campaign'' which challenged the patents at the Munich-based European Patenting Office, says the case has shown not only the ''friendliness'' of the United States but also that of the Indian government to TNCs. The cancelled neem patents were jointly held by the European drug TNC W R Grace and the US Agricultural Department. ''We wanted to show collusion between Western governments and TNCs in biopiracy but the attitude of the Indian government was not particularly encouraging,'' she told IPS.


http://www.atimes.com/ind-pak/AI17Df01.html
Will India stomach Japanese curry patent?
By Ranjit Dev Raj

NEW DELHI - It is enough to get Indians hot under the collar. Curry, that fiery, condiment-laden sauce so essential to Indian cuisine, is in danger of falling to Japanese patent hunters.

There have been other overseas claimants to the ownership of curry. Not long ago, the British Tourist Authority declared it Britain's national dish in acknowledgment of its phenomenal popularity among restaurant clientele in London.

But the British were never so proprietorial about curry as Hirayama Makoto and Ohashi Sachiyo - two enterprising Japanese who have a patent application pending on the pungent preparation. If granted, the patent could give them exclusive rights to the process of making curry: ''by adding extracted spices to ingredients like cut and processed onions, heating the mixture, adding curry powder and heating until the mixture becomes viscous''.

Devinder Sharma, an expert on food security and patent issues who blew the whistle on the Japanese, warns that such piracy of traditional knowledge is bound to increase in future thanks to lack of initiative by the Indian government. ''India and other developing countries desperately need to get their act together before the 'Millennium Round' of the World Trade Organization in Seattle on November 30,'' he warns.

Anonymous said...

Another related article.

If I understand correctly, the MNCs are now going to make it harder for poorer countries to get cheap drugs from India. India itself might be able to get away with the Drug Price Control Order. Plus, there are talented scientists in India who will be able to take advantage of the new opportunities. But this is likely very bad news for the poorer countries.

I am not sure this decision is good by textbook economics wise; seems to me more like the strong (and powerful lobby) dictating terms to the weak.

BTW, how is China handling this issue?

http://www.atimes.com/atimes/South_Asia/GA08Df06.html
Drug headache for India
By Indrajit Basu

...

For over three decades, beginning from the 1970s, India only had process patent laws that local drug companies used to their advantage for any drug discovered elsewhere in the world. An Indian drug company for instance could develop any drug as long as it found a new process to make it, and over the years, as local scientists became masters in process technologies, every major blockbuster drug in the world ended up in at least 10 copycat avatars in India. The local industry gave this practice a fancy name - "reverse engineering" - but to the global drug industry, it was plain and simple copying.
...

Most MNCs and the WTO feel that the biggest positive consequence of a new patent regime on a country like India is the fact that its people will now have easy access to cutting-edge drugs. However, there are apprehensions about price and drug availability in the new regime. "The new regime rules out the availability of low-cost medicines," says Rajinder Sachar, a former High Court judge and an industry expert, while D G Shah of Indian Pharma Alliance fears, "Since patented drugs would be sold exclusively by patent holders, it may affect availability. Hundreds of smaller companies made these drugs and ensured their availability across the country." It was to deflate the high prices of medicines and make them available across the country that Indira Gandhi - Indian prime minister who was assassinated in 1984 - did away with the product patent regime in 1971.

MNCs, however, counter that such fears are exaggerated. "From 2005, the number of new drugs receiving patent protection will only be a handful since only those invented after 1995 can get a patent in India," says S Ramakrishna, director of Pfizer, India. "As it takes over eight to 12 years to test and develop a new drug, there will only be a trickle of new drugs after January 2005 - and these are drugs largely unknown to us today. It is, therefore, entirely false and alarmist to claim that thousands of existing drugs will get patented and prices of medicines will shoot up. Nothing of that sort will happen." Moreover, according to Commerce Minister Kamal Nath, the emergency clauses in the TRIPS agreement empower a government to acquire a patent to meet emergencies. "The Drug Price Control Order, which determines the prices of key drugs, is still in place. With such provisions, the fear of price rise is misplaced," says Nath.
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Anonymous said...

Howard Georgi (Harvard physicist) had a real nice talk on the subject (women in physics) recently.

Regarding Summers' statement, I guess as a man I felt quite ashamed that no man stood up to criticize him at the forum. It was not just what he said, but the glib manner in which he discussed it (his experience with his daughter) which unsettled/offended me. I think gender discrimination is quite real sometimes.

My wife, who was in a top biology program, constantly felt that she was not being treated seriously, and quit her Ph.D. since she could not take it anymore. This, even though she was better than *ALL* her male colleagues.

I think men can often be unaware about subtle ways in which they discriminate. Some of it is intentional, some is unintentional, but present, IMHO. I think as an outsider to US society (i.e., non-white immigrant), I notice it personally as well, but I learn to *work around* it.

Anonymous said...

BTW, some of the popular univ texts have an Indian Edition, so they are priced a fraction of the US price. I wonder if it will be similar with drugs.

BTW, about "80 percent of the active ingredients in US prescription drugs are made overseas." What is the breakdown, I wonder...

http://www.atimes.com/atimes/South_Asia/DL21Df02.html

Anonymous said...

MFA (previous two posts :))

Anonymous said...

Interesting posts, MFA.

Anne

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