[AS PREPARED FOR DELIVERY]
"Building a Knowledge Base for Innovation and Creativity to Promote Development"
Successful technological catch-up that leads to structural transformation is essential for countries seeking to diversify their economy and pursue sustained and inclusive growth. In this regard, the experience of several developing countries, particularly in Asia, demonstrates the important role of strong industrial policies with linkages to Science Technology and Innovation and proactive trade policies. The LDCs must already start taking steps to avoid becoming overly specialized in low value-added production by establishing knowledge and innovation intensive manufacturing activities that can promote development.
An enabling policy framework to support such a transition for LDCs does exist, but a more coherent approach is required specifically targeted at achieving such a transformation. Equally LDCs must be more proactive in making use of and pursuing existing flexibilities and policy space available to them. Since the start of the recent economic crisis, there has been a growing recognition of the critical role of the State and public policy in fostering economic performance and long term-growth.
A resurgent interest in industrial policy has important implications for the establishment of science, technology and innovation capacities. Sound government involvement with a strategic perspective will be needed and, in this context, policies aimed at promoting structural transformation of the economy are likely to place less emphasis on allocative efficiency and more on strengthening the capabilities, relationships and institutions in which knowledge is generated and diffused.
A major component of such a strategic perspective is the establishment of a functional national system of innovation. The experience of successful emerging economies proves that significant poverty reduction is not possible without, among other factors, a determined effort by the State to encourage and support technological knowledge absorption, diffusion and application by the productive sector. Without sustained and proactive national policies and an enabling international environment that support and promote technological learning and catching-up in the LDCs, these countries will be more and more marginalized from the global economy.
With regard to an enabling international environment, several regimes currently exist and have been partially successful but still fall short of even their own initial intentions. For example, Article 66.2 of the TRIPS Agreement requires that developed countries provide incentives to promote technology transfer to LDCs. Joint research by UNCTAD and the International Center for Trade and Sustainable Development (ICTSD) shows that between 1999 and 2007, of the 292 programmes and policies reported under Article 66.2 of the TRIPS Agreement, only 31% were found to target LDCs specifically. Even this percentage is probably inflated, as a number of those initiatives that were reported to be targeting LDCs directly do not really involve technology transfer. Only one LDC, Rwanda, has made use of the so-called Paragraph 6 system, which constitutes an important flexibility under the TRIPS agreement. It facilitates the exportation of pharmaceuticals to countries without domestic manufacturing capacity. However, current agreements still have a long way to go in order to achieve their stated objectives with respect to the transfer of technology.
Clearly LDCs could make better use of TRIPS flexibilities but have not been able to do so, either because of a lack of outside technical support or because of their own capacity limitations. So far, only a handful of LDCs have provided the TRIPS Council with their intellectual property priority needs assessments (Bangladesh, Rwanda, Sierra Leone, Tanzania and Uganda), and the majority of those that have, did so with external technical assistance.
In general, differences in the capacities and needs of countries should be taken into account when discussing IP regimes. UNCTAD has, therefore, been at the forefront in suggesting that intellectual property regimes need to be tailored to a country´s specific level of development and adjusted to meet specific development objectives. There is wide agreement now that a one-size-fits-all approach is not suitable for all countries or all purposes. As noted in the LDC Report 2007, almost all LDCs are net importers of technology and depend on externally generated knowledge, implying that the current IPR regime may hinder or prevent catch-up strategies. This dependence locks poor countries even more firmly into a low technology, low value-added growth path and further widens the knowledge gap between them and developed countries - where more than 97% of world´s patents are held.
One attempt to address this problem at the multilateral level was made by the WIPO Development Agenda. The Agenda was a landmark decision taken by WIPO Member States and recognizes the need for flexibility in the international intellectual property and technology transfer regimes. Such flexibility would permit individual countries, and especially LDCs, to tailor their national IP laws and policies in a manner that serves their development objectives.
In my view, there is scope for increased collaboration among international organizations, NGOs, governments and the private sector to elaborate a development-friendly IP regime and technology transfer regime that better meets the needs of LDCs. UNCTAD´s technical assistance in the area of IP and technology transfer supports LDCs within the flexibilities they are granted under international instruments. In this way, countries are better able to meet their specific development objectives, such as greater access to medicines, access to knowledge, innovation and technology transfer. I would very much like to see our respective organizations work together more in joint research and technical assistance efforts especially for the benefit of the LDCs.
One highly successful example of cooperation between organizations was the partnership between UNCTAD and ICTSD, in Geneva, which produced the seminal Resource Book on TRIPS and Development. The book is a widely quoted and authoritative reference guide on the full range of TRIPS Agreement flexibilities available to LDCs and other developing countries.
Technical assistance is also essential for many countries. UNCTAD recently assisted the Government of Rwanda in elaborating an intellectual property policy that was supportive of their development roadmap, Vision 2020, and this policy was adopted in March of last year.
As I mentioned in my opening remarks, flexibilities or policy space do exist for LDCs within IP and technology transfer regimes but they are often underutilized either because of a lack of capacity in LDCs themselves or because of conflicting clauses in other agreements. UNCTAD´s most recent Least Developed Countries Report, published in November, called for the creation of a "new international development architecture" (NIDA) for the LDCs. Such a proposal may provide the global framework needed to make these measures more workable. Among other measures, it calls for a more coherent approach for providing LDCs with the best possible chance of benefiting from science and technology and lifting IP restrictions on the transfer of knowledge.
Moreover, UNCTAD has previously argued in its 2007 LDC Report that alternative knowledge governance models ought to be considered as well, including open source mechanisms. Non-propriety mechanisms for knowledge governance may indeed be better suited to poor countries trying to catch-up. Choosing the right strategy to improve LDC´s knowledge ecology therefore goes beyond fine-tuning the existing IPR regime, and needs to consider a range of mechanisms in a coherent fashion.
Ladies and gentlemen, I will stop my remarks there and hand of the floor to the next speaker.