Thursday, October 03, 2019

BWorld 370, Universal healthcare via lower medicine taxes and tariffs

* This is my article in BusinessWorld last September 19, 2019.

Among the ironies of government health policies regardless of administration is their cry for “cheaper medicines” — and then they impose various tariff and taxes on medicines that make these products more expensive.

I checked the tariff and duties for imported pharmaceutical products at the World Trade Organization (WTO) and I was surprised to see that zero tariff in medicines is imposed by a number of our neighbors in the region while the Philippines imposes a nearly 3% tariff, aside from 12% VAT on medicines (See Table 1).

Other countries have higher medicine tariffs: Nepal has 14%, Pakistan 11%, Laos 10%.

This coming Monday, Sept. 23, there will be a UN High-Level Meeting (UN HLM) on Universal Health Coverage (UHC). Their theme is “Universal Health Coverage: Moving Together to Build a Healthier World.”

The UN and WHO send this virtue signaling to member-country governments to further raise taxes, impose more prohibitions and restrictions on “unhealthy” products to achieve a “healthier world.” So that the Philippines’ Department of Health, Department of Finance, other agencies create new legislations and regulations to implement this signaling.
But people around the world have been living healthier and longer, even before UHC was coined and before various taxes or tax hikes on alcohol, tobacco, sugary drinks and food were imposed (See Table 2).

Related to this, a new report was released this week, “Accelerating access to medicines: Policy recommendations for achieving the health-related Sustainable Development Goals.” It was produced and co-signed by 15 independent and non-government think tanks from 14 countries including the Geneva Network (UK), Minimal Government Thinkers (Philippines), and four others from Asia.

The report has noted that government itself is among the causes of expensive medicines and thus recommended three ways to reduce medicine costs: reduce taxes, abolish tariffs, and eradicate other trade barriers. In particular, it recommended that “Non-members should join the WTO Pharmaceutical Tariff Elimination Agreement (‘Zero for Zero’ initiative). If this is not possible, countries that still levy tariffs should unilaterally abolish them.” Yes, the Philippines should reduce its double talk by cutting its pharmaceutical tariffs of 2.8% to zero (See Table 1 again).

Regarding improving access to medicines, the report also noted that government itself creates regulations that in the process delay or limit access to medicines by the people. Thus, the report made four recommendations: Speed up patent examination, simplify the drug approval process, modernize government medicine reimbursement decision-making, and promote open trade in medicines.

Open trade in medicines means allowing more market competition via: (1) a stronger role for the WTO in enforcing existing laws vs. mandatory local content requirements; (2) instead of protectionism, developing country governments should make their economies more attractive to foreign investment by among others, investing in human capital and physical infrastructure; and, (3) public procurement of medicines should be transparent, ensure best interests of the taxpayers.

As this column has repeatedly argued, cheaper products like energy, rice, transportation, healthcare and medicines is possible if government steps back via less taxes and tariff, less mandates and prohibitions, have more competition among producers and sellers of these goods and services. Government should only ensure good quality commodities from competing players by heavily penalizing producers of fake, counterfeit, substandard, and unreliable products.

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Inequality 39, Capitalism and its detractors

A friend, Richard Heydarian, posted this article in his fb wall with his note, "Injustice of capitalism 🙈"

'Eye-Popping': Analysis Shows Top 1% Gained $21 Trillion in Wealth Since 1989 While Bottom Half Lost $900 Billion”
byJake Johnson, staff writer
Friday, June 14, 2019

I commented, "And you want the 'justice' of socialism? Fb capitalism is cool, even critics of capitalism super enjoy and use it."

Richard replied, "not sure about the bottom 60 percent of world population subsidising the billionaires on top... these networks are extracting 'rents' by appropriating commons..."

No. We users of FB, YouTube, Twitter, Google, etc, do not subsidize the owners of these great inventions. It's the reverse, their inventions subsidize and modernize our lifestyle. We should be thankful of them, not demonize them because they are super rich. Of course these guys are not  angels but neither are they devils as most lefties would portray them.

And to say "appropriating commons" is wrong. These products and services are not part of natural commons like air, sea and mountains. These were non existent before, they were invented by bright minds who know exactly what the people want. They become rich, they privatize what they privately invented and risks taken.

On “data mining” by these socmeds -- when I sign up for "free" social media, I know that owners of these platforms also have free access to my posts, pms, etc. I don't care. People who are bothered with this, I suggest they deactivate NOW. Keep their privacy to the max, minimize emails too. There are tradeoffs to some "freebies" like free fb, free twitter, etc. I accept the tradeoffs. Rich inventors of these socmeds meet happy subscribers worldwide. The beauty of capitalism, people transact their businesses on a voluntary scheme, no one is forced, coerced to sign up and give up something.

On the contrary, the stupidity and idiocy of socialism -- people are forced, coerced to feed the wasteful and irresponsible, via high taxes, mandatory fees and contributions. Venezuela is a good case when people or leaders lambast the profit system and replace it with heavy state coercion system. Result is equality of poverty and misery, lousy.

(Linear inequality graph, not mine, I only got it from the web, CTTO, thank you.)
Private enterprise and the profit system really results in more inequality, 100%. Because people have free will. The will to be hardworking and the will to be complacent. Some people work hard 6-7 days a week but if they also party 6-7 nights a week and have zero savings, then they are headed for poverty, 100%. The super-rich are demonized because they know how to super-save, how to reinvest instead of spending quick their initial big earnings. This is wrong. 

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Thursday, September 26, 2019

BWorld 369, Copyright and trademark in the ASEAN

* My column in BusinessWorld on September 17, 2019.

“A power ‘to promote the progress of science and useful arts, by securing, for a limited time, to authors and inventors, the exclusive right to their respective writings and discoveries.’… The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals.”

— James Madison,
The Federalist Papers, No. 43, 1788.

This argument by Madison would be among the basis for the enactment of the USA’ first copyright law in 1790. The US patent law was also enacted that year while its trademark law was made in 1881, revised and expanded in 1905.

The Philippines’ law on these are contained in the Intellectual Property Code of the Philippines (RA 8293, 1997). A report in BusinessWorld, “Intellectual property applications climb 11% in first half” said:

“‘Society is now appreciating the IP (intellectual property) system more than ever,’ IPOPHL (Intellectual Property Office of the Philippines) Director-General Josephine R. Santiago said. Trademark filings rose by 11% year-on-year to 18,964 in the first half… Patent filings grew 4% to 1,991… Utility model filings grew 31% to 1,173… Industrial model filings rose 14% to 824… Copyright filings rose 53% to 990.”

These are good numbers. I checked the World Bank’s World Development Indicators (WDI) database, data on trademark application. Then, I also checked the World Economic Forum (WEF) Global Competitiveness Index (GCI) 2018 report — Pillar No. 12 is Innovation capability, and among the sub-pillars are patent applications and trademark applications per million population.

So for the numbers in the table, trademark applications are in absolute amounts, both country residents and non-residents, while the index for patent and trademark applications refers to per capita applications. China and India lead in absolute amount while Singapore and the Philippines are the laggards as of 2017. But in patent applications ranking, Japan, Taiwan, and South Korea were the world’s top three (See Table).

The good news for the Philippines then is that we are fast catching up on the use of intellectual property rights (IPR). Trademark applications have doubled from 2007 to 2017, and for copyright, IPO’s first half data for 2019 show a huge increase of more than 50%.

Recall also that the fastest-growing sub-sector in the Philippine economy over the past 5-1/2 years, 2014 to H1 2019, is intellectual property products, under Capital Formation (or private investments). It was growing at 28% per year, capital formation growing at 14%, and GDP at 6.3%.

Fast growth in IPR use also means fast growth in IPR infringement. This was tackled in the last panel of the BusinessWorld Industry Summit 4.0 last week, Sept. 9, at Shangri-La at The Fort at BGC. The last panel was about “Content and piracy” with speakers from the Coalition Against Piracy, the Optical Media Board, Globe Telecoms, and a film director.

So the role of the state in protecting private property, both physical and intellectual property, is reasserted by the current situation. And on this, two IPR-related events will be co-sponsored by our think tank, Minimal Government Thinkers (MGT).

The first is the launching of a new report, “The importance of IPR for progress: reform agenda for ASEAN countries,” in partnership with Geneva Network (UK), on the afternoon of Sept. 24 at the Holiday Inn Makati. Department of Trade and Industry (DTI) Secretary Ramon Lopez will give the keynote speech and, since the DTI is the mother agency of the Intellectual Property Office, he has a good overview of the sector in relation to the overall trade and investment environment.

The second is the global launch of the International Property Rights Index (IPRI) 2019 by the Property Rights Alliance (PRA, Washington DC) on Oct. 16 at Fairmont Hotel Makati. MGT and the Foundation for Economic Freedom (FEF) will be the local partners in launching this big event. The author of the report, Dr. Sary Levy-Carciente, and PRA Executive Director Lorenzo Montanari will come to Manila to present the report. Both events are by invitation only, but we will consider some interested individuals working on the sector who are not in our list. Send me an e-mail.

Private property is the cornerstone of economic freedom and free enterprise. Both physical property and intellectual property. Investors come if they are assured that their offices, investments, corporate brands/trademarks, patented and copyrighted inventions are respected and protected by the government against pirates and IPR thieves.

See also:

Report on IPR in the ASEAN

Last Tuesday, we launched this report, “The importance of Intellectual Property Rights for progress: reform agenda for ASEAN countries” at Holiday Inn Makati. The recommendations are shown further below.

This is the program.

Sunday, September 22, 2019

BWorld 368, More politics will worsen the Philippines’ power deficiency

* My column in BusinessWorld on September 12, 2019.

It is pathetic that people often politicize many things, whether food or medicines or electricity. Like creating a new energy company by legislation instead of the normal ERC-SEC process, or getting the Supreme Court to stop implementation of certain provisions of the EPIRA law of 2001 (RA 9136) such as the retail competition and open access (RCOA).

The Philippines, till today, is among the countries with the lowest electricity generation in Asia, both in absolute amount and per capita. I derived the per capita electricity production below from two data sources: generation from BP Statistical Review of World Energy (June 2019), and population from IMF World Economic Outlook database (April 2019). (see table 1)

We need to stop further politicizing the power sector because low power capacity automatically means that electricity prices will remain high as demand continues to rise. We should encourage more generation companies (gencos) to build more power plants and compete with each other in supplying (1) electric cooperatives, (2) private distribution utilities (DUs), (3) retail electricity suppliers (RES), and (4) the Wholesale Electricity Spot Market (WESM). More market competition will lead to lower prices while more political intervention will lead to higher prices as gencos, DUs and RES have to factor in the cost of politics and more regulations and restrictions.

Recently, leftist Bayan Muna led by ex-Cong. Colmenares and Cong. Zarate went to the Supreme Court (SC) to stop the implementation of another provision of EPIRA law, the competitive selection process (CSP) on certain DUs. The target, as usual, is the biggest DU in the country, Meralco — demonized for entertaining a sister genco company. Earlier, there were attempts to stop — also via politics — this big DU from getting supply contracts from new big coal plants (to help “save the planet,” the protesting party-list said).

Is it possible that big non-coal plants and companies — say, big gas plants — are desperately trying to stop these coal contracts to force Meralco into buying their power after these new coal plants have been demonized and isolated? If so, it’s a lousy and ugly business model; and lefties are playing along.

Below I try to derive why there were many yellow and red alerts from March to July this year, and how much estimated available power there was during those five months.

First, I computed the implied capacity factor (ICF, measured as: ICF = (Generation)/(installed capacity x 24 hours x 365 days). For oil plants that are used mainly for peak load, I assumed an ICF of 70%, running for only around 6 hours/day for 200 days. From the ICF, the implied available capacity (IAC) can be derived (see table 2).

Then I made projections from 2019 to 2023. Peak demand from 2015 to 2018 rose by 5.7% a year on average, so for 2019 to 2023, I projected a 5% annual increase due to the recent GDP growth deceleration. From there, I computed the projected reserves (see table 3).

We should have reserves of at least 20%, not 2% or even -7%. Of course, there are power plants from the Visayas grid to augment Luzon, but Visayas provinces are also growing fast on their own.

Lefties like Bayan Muna have bad analysis and lousy mathematics in assuming that things in the power sector will be okay in the coming years. More politics, more Congressional harassment, and SC’s TRO will not protect the public from blackouts and high electricity prices.

They should not announce their intellectual mediocrity and do more realistic power projections. Neither should they drag the country toward darkness, as dark as their leftist philosophical advocacies.

See also:

Saturday, September 21, 2019

Expensive bureaucracy and WHO vs cheaper medicines

A new report was released this week that should help remind the UN and country leaders, WHO and health Ministers or Secretaries, and many other officials flying to NYC for a UN High Level Meeting (UNHLM) next week on health, climate, many other issues -- that they themselves are part of the problem on expensive medicines and healthcare. Minimal Government Thinkers (MGT) is one of the many co-signatories of this report.

See the report here,

How do governments become contributors to expensive medicines, less affordable and less efficient public healthcare?

Via many taxes, duties, tariffs, non-tariff barriers (NTBs) on imported medicines and medical devices; via long and bureaucratic approval of patents of newly-invented and revolutionary drugs, and so on.

Take this chart from the report, ad valorem duties or tariffs on imported medicines.

Then the long approval process of newly-invented, patented drugs. Thailand and Brazil are the emerging economies' topnotchers in such delays.

To help remedy these problems and issues, the report has recommended the following:

1. Reduce unnecessary medicine costs by:
* Reducing taxes,
* Abolishing tariffs,
Eradicating other trade barriers.

2. Accelerate access to medicines by:
* Speeding up patent examination,
Simplifying the drug approval process,
 Modernising government medicine reimbursement decision-making, and
 Promoting open trade in medicines.

I am happy to be part of this very useful and important report.
Thank you, Geneva Network for initiating this study.

BWorld 367, FIRe, innovation and stealing of innovation

* This is my column in BusinessWorld last September 10, 2019.

“All creation is a mine, and every man, a miner… In the beginning, the mine was unopened, and the miner stood naked, and knowledgeless, upon it… Man is not the only animal who labors; but he is the only one who improves his workmanship. This improvement, he effects by Discoveries, and Inventions…”

— Abraham Lincoln,
“Lecture on Discoveries and Inventions” (1858)

The Protection of companies’ intellectual property rights (IPR) is very important to encourage more innovation and discoveries, as observed by Abraham Lincoln. And among the big issues in the ongoing US-China trade war are those related to IPR — forced technology transfer, if not outright stealing of the intellectual properties (trademark, patent, copyright, trade secrets) of US and other Western companies by Chinese companies including their state-owned enterprises.

I found this data on product counterfeiting, which reflects the smuggling of pirated commodities, from the US Chamber of Commerce’s Global Intellectual Property Center (GIPC) report, “Measuring the Magnitude of Global Counterfeiting” (2016). China plus Hong Kong corner the bulk of such IPR infringement. Note that the Chamber is a private organization, not a US government body and, hence, more objective in its assessment of the degree of IPR stealing (See table).

At the BusinessWorld Industry Summit 4.0 held at Shangri-La at The Fort in BGC yesterday, IPR was not highlighted but it is among the assumed prerequisites, along with physical, financial property protection, for companies to engage in endless innovation and competition in the Fourth Industrial Revolution (FIRe).

Anthony Oundjian, Managing Director and Senior Partner of the Boston Consulting Group, emphasized the value of people and their creation — they comprise some 60% of total FIRe inputs, while processes comprise 30%, and technology, 10%.

Senator Grace Poe said that “innovations are unfolding at breakneck speed” while legislation takes years for important bills. She mentioned the 1936 law, the Public Service Act (PSA), which has restricted foreign investments and technology transfer in the country. The new bill amending the PSA will liberalize foreign investments in transportation (land, sea, air) and telecommunications, and limit “public utilities” — where foreign investments is limited — to only three sectors, namely, distribution and transmission of electricity, and water distribution. This bill should be among the priorities for legislation and enactment into new laws.

Dr. Jose Ramon Albert, Senior Research Fellow of the Philippine Institute for Development Studies discussed the potential labor displacement of robots, artificial intelligence, and other FIRe technologies, and what government and other stakeholders can do.

Looking at the list of major and minor sponsors of the BusinessWorld conference, they are just represented by their logo and one-word corporate name. The logo and brand say it all, both old and new companies from different sectors and industries. Which speaks of the underlying importance of IPR and brand protection.

Related to all this, two IPR-related reports will be launched in Makati over the next few weeks. On Sept. 24, the Geneva Network (UK) and Minimal Government Thinkers (MGT) will launch a new report, “The importance of IPR for progress: reform agenda for ASEAN countries.” Four other independent and market-oriented think tanks from Malaysia, Indonesia, Thailand, and Vietnam are co-producers of this report. Department of Trade and Industry Secretary Ramon Lopez will be the keynote speaker. Philip Stevens of the Geneva Network and yours truly will present the report. Reactors will be Jess Varela of the Philippine Chamber of Commerce and Industry, and Kristine Alcantara of the Foundation for Economic Freedom (FEF).

And on Oct. 16, the International Property Rights Index (IPRI) 2019 Report will be launched by the Property Rights Alliance (PRA, Washington DC, USA) in partnership with FEF and MGT. The author of the report, Dr. Sary Levy-Carciente who is a Venezuelan economist, PRA Executive Director Lorenzo Montanari, and Chris Butler of the Americans for Tax Reforms will come to Manila to present the report.

Both events are by invitation only but we will consider some interested individuals outside the list — just send me an e-mail.

With FIRe technologies and, in the next few decades, the Fifth Industrial Revolution, even more modern, seemingly impossible inventions and creations will emerge. Companies and individual researchers will just keep producing those new inventions and processes. The role of government is to ensure protection of private property, their inventions and corporate identities and brand.

See also:

Friday, September 20, 2019

Climate Tricks 86, Cannibalism and eating bugs to 'save the planet'

I have another climate debate with a friend last week when he posted this weird article in my fb wall,

(Why) The Next 3000 Days Will Decide the Fate of Human Civilization
How The Four Greatest Existential Threats in History Will Conquer Us This Decade — Unless We Conquer Them
umair haque  Sep 7 2019

Garbage in, garbage out. 3,000 days? Whaaat? I thought we only have 3,000 hours left?
I have little patience for long, literary, wordy papers with no tables, no charts or graphs, no hard data. Garbage is easier spread via wordy, emotional papers.

There are now many ways to extend the "3,000 days" Armageddon to perhaps 3,001 days left -- via cannibalism. Instead of eating more meat (more cow fart, more methane, which is one of several "catastrophic" GHGs), people should eat other people when others die. Very bright this cult called 'save the planet.'

Swedish Scientist Proposes Cannibalism to Fight Climate Change

Swedish behavioural scientist Magnus Söderlund has suggested that eating other people after they die could be a means of combatting climate change.
The scientist mentioned the possibility of cannibalism during a broadcast on Swedish television channel TV4 this week about a fair in Stockholm regarding “food of the future”.

Swedish Behaviourist Suggests Cannibalism to Combat Climate Change
Eric Worrall  September 6, 2019

Or instead of eating other people, they can eat cockroaches, termites, to 'save the planet.' Very idiotic proposals.

Would you eat insects to save the planet from global warming?
Mon 15 Oct 2018 09.10 BST Last modified on Mon 15 Oct 2018 14.21 BST

People are Eating Bugs to Fight Climate Change

Would eating insects save us from climate change?
Camellia Williams  Jan 17 2019

The "man-made" Gorebal warming is a movement of dishonesty, corruption, robbery, large-scale robbery. Lots of rains, flood and storms and we send more money to CCC, DENR, DOF, LGUs, UN, WB, ADB, etc. No rain, no flood, no storm and we send more money to CCC, DENR, DOF, LGUs, UN, WB, ADB, etc. Whatever weather, whatever climate, less cold or more cold, we must send more money to them and they will produce more global junkets, create new energy and carbon taxes and confiscate via legislation more money from our pockets and savings.

Those feed in tariff (FIT) in our monthly electricity bill; the higher oil/lpg/coal taxes in TRAIN law, the annual budget of CCC, higher climate budget of DENR and LGUs, billions of $ of climate loans from WB, ADB, etc -- those are ALL products of all these climate robberies and scam. All they want is more people sharing and spreading alarmist, frankenstein stories -- and that helps their rackets and junkets.

It is difficult to refute a derange argument -- that less rain or more rain, less flood or more flood, less dogs or more dogs -- ALL proof of 'man-made' Gorebal warming. And such deranged idea comes from the world's biggest and influential institutions like the UN.

The argument is as crazy as this: Mr. X and family have less money and more money, proof that they are poor, so taxpayers should keep sending them money, subsidize them forever. 

And people clap the argument, and keep sharing it. Moronic, deranged argument and being shared endlessly.

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